Can voluntary approaches ever be efficient?

Despite their growing use only a few theoretical descriptions on the efficiency of voluntary approaches can be found. This paper summarises the findings in this field so far. It analyses the efficiency of voluntary approaches in three different ways: (1) Voluntary approaches as a bargaining process over abatement levels; (2) Voluntary approaches as a way to diminish informational asymmetries; and (3) Voluntary approaches as a voluntary over-compliance mechanism. From the models it seems as if the efficiency of voluntary approaches depends on several factors. Public supply of information, auditing and the exchange of information between the negotiating parties are important elements. Further, positive and negative inducements by the regulator can create incentives for the industry to engage in voluntary approaches. Also, consumersʹ demand for environmental quality can affect the environmental performance by industry, either by the lobbying of interest groups or by a demand for products produced under environmental considerations.