How do Voluntary Pollution Reduction Programs (VPRs) Work? An Empirical Study of Links between VPRs, Environmental Management, and Environmental Performance

EPA-sponsored voluntary pollution reduction programs (VPR) have gained increased prominence in U.S. environmental policy. However, as commitments to these programs are not enforceable by design, the empirical literature has mostly focused on studying the motives for their adoption and their efficacy in curbing pollution. This paper seeks (i) to shed light on the bi-directional links between participation in a VPR and adoption of firm-structured environmental management strategies (EMS), and (ii) the joint impact of VPRs and EMS adoption on the environmental performance of participant firms. Our econometric analysis reveals that participation in the 33/50 program, helped spur the adoption of Total Quality Environment Management (TQEM), which in turn had a significant negative effect on 33/50 pollutant releases. We also find that 33/50 participation produced additional direct benefits in pollution reduction both during and after the program years, and that it enhanced the effectiveness of TQEM in reducing pollution during the post-program years.