Voluntary Programs to Encourage Diffusion: The Case of the Combined Heat-and-Power Partnership

In the last decade, voluntary environmental programs have increased considerably in scope. A novel use of these programs is to di¤use new technology in industry as means to improving their environmental outcomes. This paper tests whether the US Environmental Protection Agency s Combined Heat-and-Power Partnership has encouraged the installation of CHP applications since its start in 2001. Two hypotheses are tested here, whether (i) the Partnership has encouraged the installation of CHP applications and (ii) if the partnership has encouraged utilization of CHP once installed. Using nearest neighbor matching on data for electricity plants in the US, results nd weak evidence that the program has helped CHP system spread, controlling for the selection of rms into the partnership.