This paper analyzes the effect of participation in the Department of Energy's Climate Challenge Program on CO2 emission reduction activity of the largest 50 electric utilities east of the Rocky Mountains from 1995 to 1997. Based primarily on regulatory influence theory of voluntary behavior developed by Lyon &Maxwell (1999), a twostage model was developed and tested in which the first stage predicts voluntarism and the second stage uses the predicted values to test how voluntarism contributes to pollution reduction. Findings show a moderate level of support for regulatory influence theory with firms more likely to volunteer if they were located in states characterized by higher levels of environmentalism and if they were subject to higher levels of direct federal and state regulation. Findings also support previous empirical evidence that larger firms are more likely to adopt voluntarism, while larger, high-polluting utilities voluntarily committed to reduce greater quantities of CO2. Nevertheless, adoption of the program seems to have no effect on reduction levels and those firms predicted to volunteer higher reduction levels were found to reduce CO2 emissions less. It is hypothesized that the ineffectiveness of the Climate Challenge Program, compared with other voluntary programs, such as the 33/50 Program, may be due to the general weakness of the CO2 regulatory regime in the United States. © 2000 by the Association for Public Policy Analysis and Management.
Welch, E. W., Mazur, A., & Bretschneider, S. (2000). Voluntary behavior by electric utilities: Levels of adoption and contribution of the climate challenge program to the reduction of carbon dioxide. Journal of Policy Analysis and Management,19(3).