Assessing the effectiveness of the voluntary environmental programs: Three essays on the Climate Challenge Program

This study assesses the impact of the U.S. Department of Energy's Climate Challenge Program (CCP), a voluntary environmental program (VEP) to reduce greenhouse gas (GHG) emissions between 1994 and 2000. Although VEPs have become increasingly popular to both government and firms, existing empirical work is relatively limited. The study investigates whether the VEP affects participants' behavior to enhance environmental performance beyond what participants would otherwise have achieved. In this study, the impact of alternative channels and compliance mechanisms underlying a VEP are examined in much greater detail than in existing literature, by assessing firm performance with respect to a range of possible outcome measures. In addition, the study identifies what factors are significant in explaining utilities' decisions to join CCP.;To examine the question, this study employs various program evaluation methods such as Difference-in-differences estimation (DID), Propensity Score Matching (PSM), Fixed Effects model, and Dynamic Panel Data model (DPD) in order to discern net program impacts while addressing self-selection issue. The analysis involves a statistical study based on a panel dataset covering for the 17 years from 1990 to 2006.;This study found theoretically interesting and practically meaningful results with respect to relationships between the CCP and various performance outcomes over longer-term period. The study suggests that the CCP might affect intermediate measures such as fuel efficiency or fuel switching, but that changes of these metrics were not enough to reduce CO2 emissions intensity at a utility level. However, a plant level study using a dataset of longer-term period shows that the CCP was effective in reducing CO2 intensity and encouraging power plants to switch fuels. This study also finds that the persistent and lagged effects of the CCP on CO 2 intensity and fuel switching existed after the CCP ended (2001-2006). The result of Dynamic Panel Data model suggests that the pattern of power plants' CO2 emissions control follows a continuous adjustment, which is path dependent. Those results provide helpful insights in understanding firm's behavior and strategies to comply the CCP over time, which is not well studied before this dissertation.