Business-led environmental initiatives have become prominent in recent years. At the same time, governments have shown increasing interest in 'voluntary' programs for environmental protections. While one could argue that such corporate environmentalism is motivated either by cost reduction or as a marketing strategy to appeal to the 'green' consumer, Lyon and Maxwell explore a third and more complex possibility. Drawing heavily on their prior work in corporate environmentalism, they argue that corporate environmentalism is the result of firms attempting to anticipate public policy changes and influence the legislative process in their best interests. Presenting a general framework that illuminates the links between corporate environmentalism and pubic policy, they use the analytical tools of positive political economy and game theory to provide insights into both corporate strategy and the effects of corporate and government polices on overall social welfare. This integrated and comprehensive book will have wide policy and management appeal.
'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, Professor of Economics, 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, John D. Black Professor of Business Administration, Harvard Business School