Environmental Effectiveness Analysis on Voluntary Environmental Program : A Case Study of the Green Enterprises Initiative

Abstract

Voluntary environmental programs encourage companies to achieve environmental performance beyond legal standards. Unlike traditional context of environmental regulation, companies actively participate in setting up environmental targets, have flexibility in how they achieve the target, and, thus, improve their environmental performance in a cost-effective way. It also corresponds with companies profit maximizing strategies by participating in voluntary environmental programs. Voluntary environmental programs are also beneficial to regulators because they can save their own costs. In this regard, environmental programs of voluntary approach for environmental policy have become a prevailing alternative to regulation of command (and control) approach. There have been a considerable number of voluntary environmental programs introduced in Korea as well. The study focuses, however, on the environmental effects of voluntary environmental programs, which is a case study on the Green Enterprises Initiative, one of the oldest and most popular voluntary environmental programs in Korea. Participants of the Green Enterprises Initiative do not necessarily achieve higher levels of environmental performance than non-participants. There is no significant difference between participants and non-participants regarding annual average air pollutant emission concentration levels of sulfur oxides and nitrogen oxides. Each participant had a different path of environmental performance from 2012 to 2016, and not all of the participants improved their own environmental performance continuously. The Green Enterprises Initiative membership also has a limited impact on regulatory compliance. Therefore, the common belief that companies participating in voluntary environmental programs have higher environmental performance than companies that are not cannot be always supported. It is complicated to define environmental performance. For the sake of comparative purposes, this research uses emission data as environmental performance, and it was gathered from the remote monitoring system, CleanSYS. Therefore, the conclusion from the data analysis can only be applied to end-of-pipe pollutant reduction and larger companies with smokestack facilities. The remote monitoring system and the size of companies impact on the voluntary actions of companies and they may encourage non-participants to commit to environmental performance beyond compliance. Voluntary environmental programs cover more various environmental activities than conventional reduction. The environmental effects of voluntary environmental programs also can be assessed in a more comprehensive way including qualitative environmental performance. Further study of the environmental effects of voluntary environmental programs for small and medium sized-companies is needed.