Recommendations for Negotiated Agreements

Abstract

Negotiated agreements are relatively new in the field of energy and environmental policies. In order to support the design of future negotiated agreements it is useful to discuss how environmentally effective negotiated agreements can be designed. Based on rational decisionmaking and economic theory, the OECD has put forward eight recommendations for designing pollution abatement schemes through negotiated agreements that set ambitious targets, ensure target achievement, and reach targets in an efficient way. Based on three cases of negotiated agreements regulating industrial energy consumption in Denmark, the Netherlands, and France, the adequacy of the OECD recommendations will be discussed. It is found that the recommendations should pay more attention to the question of efficiency of agreements and to the difficulties in defining unambiguous targets. Apart from these deficiencies it is concluded that the recommendations cover all phases, are soundly based in theory, and give a meaningful evaluation of negotiated agreements.