This is the first book to provide a hard-headed economic view of the voluntary approaches to environmental issues, especially toxic chemicals, waste disposal and global warming, that have become prominent in recent years. Corporate environmental initiatives are seen as a tool for influencing the behaviour of environmental activists, legislators, and regulators, though they may have ancillary benefits such as attracting 'green' consumers or reducing costs. Equally, government voluntary programs are seen as a way to achieve modest environmental results when political resistance to mandatory policies is high. Rigorous analysis is illustrated with numerous case studies drawn from the US, Europe, and Japan, while technical details are relegated to appendices, and each chapter highlights implications for corporate strategy and public policy. Although rooted in economic theory, this book will appeal to business strategists and policy practitioners, as well as scholars and researchers.

‘This book is the best example of how serious economic theory can be used to tackle many practical and relevant environmental problems. The authors do not only adopt the usual regulators’ viewpoint, whose goal is to correct market imperfections. In addition, this book pays a lot of attention to business incentives and to how free markets can profitably adopt self-regulation measures. As a consequence a wide range of policy strategies emerges. This book is a valuable reading for both private and public decision makers.’

Carlo Carraro - University of Venice and Research Director Fondazione ENI E Mattei, Venice

‘A common joke has economists saying, ‘It works in practice, but will it work in theory?’ Lyon and Maxwell are uncommonly inquisitive economists who set about in this fine book to show what is happening in the practice of corporate environmental behavior and how that squares with the predictions of the theory they quite usefully develop. Anyone interested in serious thinking about ‘corporate social responsibility’ will benefit from their treatment.’

Paul R. Portney - President, Resources for the Future

‘Drawing on game theory and classical economic models of regulation, Lyon and Maxwell advance our understanding of the relationships among companies, governments, and environmental activists that shape the environmental behavior of firms. Their book is critical reading for environmentalists, government officials, and scholars who need to understand why hard-nosed managers might practice corporate environmentalism, and whether society at large actually benefits from that behavior.’

Forest Reinhardt - Harvard Business School