• Description

Encouraging firms to voluntarily develop environmental management systems (EMSs) has been described as a potential policy tool for achieving environmental objectives in Georgia. We survey current thinking on the subject and note several shortcomings in current methods used to evaluate what motivates private firms to adopt comprehensive EMSs. Using a unique dataset of environmental management practices of Japanese manufacturers, we find that consumer pressures, regulatory pressures, and market power are major factors that motivate firms to develop comprehensive EMSs. We also find that after controlling for self-selection bias in survey response, the effects of regulatory pressures become more significant and larger in magnitude. These results suggest that although encouraging development of EMSs has the potential to augment existing regulations, the regulatory tools are fundamental to the success of such voluntary approaches. Working Paper Number 2005-0015