This book is a remarkable case study of an environmental policy initiative for a national environmental regulatory system in the information age. In 1995 the Indonesian Ministry of Environment took the bold step to launch an environmental disclosure initiative called the Program for Pollution Control, Evaluation and Rating (PROPER). Under PROPER, environmental performance of companies is mapped into a five-color grading scale - Gold for excellent, Green for very good, Blue for good, Red for non-compliance, and Black for causing environmental damage. These ratings are then publicly disclosed through a formal press conference and posted on the internet. Not only did this simple rating scheme create a major media buzz and enhanced environmental awareness of the general public, but it also unleashed a wide range of performance incentives that showed how markets with environmental information could function in a developing country setting. The authors provide a multidisciplinary analysis of how the PROPER program harnessed the power of public disclosure to abate the problem of industrial pollution. They describe how the program has successfully improved the average environmental compliance rate from close to thrity per cent in 1995 to as high as seventy per cent in 2011. This improvement was driven primarily by information disclosure, which avoided expensive and unpredictable legal enforcement through the court system of Indonesia. The combination of institutional history and detailed economic and analyses sheds light on the role of policy entrepreneurs who laid the foundation for disclosure and transparency, despite the constraints of the Suharto regime. The PROPER program is now internationally recognized and continues to serve as a model for many developing countries.

This book is a remarkable case study of an environmental policy initiative for a national environmental regulatory system in the information age. In 1995 the Indonesian Ministry of Environment took the bold step to launch an environmental disclosure initiative called the Program for Pollution Control, Evaluation and Rating (PROPER). Under PROPER, environmental performance of companies is mapped into a five-color grading scale – Gold for excellent, Green for very good, Blue for good, Red for non-compliance, and Black for causing environmental damage. These ratings are then publicly disclosed through a formal press conference and posted on the internet. Not only did this simple rating scheme create a major media buzz and enhanced environmental awareness of the general public, but it also unleashed a wide range of performance incentives that showed how markets with environmental information could function in a developing country setting. The authors provide a multidisciplinary analysis of how the PROPER program harnessed the power of public disclosure to abate the problem of industrial pollution. They describe how the program has successfully improved the average environmental compliance rate from close to thrity per cent in 1995 to as high as seventy per cent in 2011. This improvement was driven primarily by information disclosure, which avoided expensive and unpredictable legal enforcement through the court system of Indonesia. The combination of institutional history and detailed economic and analyses sheds light on the role of policy entrepreneurs who laid the foundation for disclosure and transparency, despite the constraints of the Suharto regime. The PROPER program is now internationally recognized and continues to serve as a model for many developing countries.

Governments around the world are beginning to embrace a new form of environmental regulation - mandatory disclosure of information. While information disclosure programs appear to have an impact on subsequent firm behavior - often resulting in lower levels of pollution - little is known about the costs and benefits of these programs and whether or not they enhance social welfare. This paper presents a simple bargaining model where mandatory information disclosure is used to overcome a lack of information on the part of the public. We characterize the conditions under which information disclosure will lead to a reduction in emissions, and ultimately, the conditions under which it will enhance social welfare. Several extensions of the model are briefly explored, including the effect of two sources of pollution - only one of which is subject to information disclosure.

The substantial growth of voluntary formal corporate environmental reporting presents an opportunity to significantly expand informational regulation as a tool of American environmental protection policy. The goal of this Article is to encourage policymakers to leverage this voluntary trend for public policy purposes, ultimately leading to development of a comprehensive system of mandatory reporting of environmental performance information. Importantly, however, such an objective is not offered as a panacea for infirmities inherent in traditional environmental regulation. Indeed, extant scholarship reflects that disclosure strategies are imperfect substitutes for direct legal controls on environmental conduct. Nonetheless, concerning the search for viable alternatives to traditional regulatory choices, such scholarship also reflects the substantial promise of information disclosure as a supplement to the existing regulatory system. Indeed, as part of a reflexive law strategy, a primary objective of information disclosure is to encourage "self-regulatory" behavior to complement existing direct control systems and attendant enforcement regimes. Accordingly, use of corporate environmental reporting as an informational regulatory approach should stand alongside of, rather than in substitute for, command-and-control regulation. Section I of this Article examines the still evolving trend toward voluntary disclosure of environmental performance information in formal corporate environmental reports. This discussion pays particular attention to the most important recent development in the evolution of voluntary formal corporate environmental reporting - the Global Reporting Initiative. Section II examines two existing examples - the European Union's Eco-Management and Audit Scheme ("EMAS") regulation and environmental disclosure under United States securities laws - of governmental policy instruments requiring disclosure of environmental performance information. Section III utilizes a law and economics framework to evaluate the viability of utilizing the existing voluntary formal corporate environmental reporting regime to establish a comprehensive strategy of environmental informational regulation. Following analysis of formal corporate environmental reporting through consideration of economic and legal perspectives on environmental informational regulation, the Article concludes with a brief discussion of the intrinsic worth of a mandatory regulatory approach as opposed to mere governmental support for a voluntary reporting regime.

Mandatory environmental information disclosure policy has proliferated in recent years. In this dissertation, I explore its impacts on individuals' environmental attitudes and behavioral intentions and its interaction with other forms of environmental regulations. This dissertation is comprised of three essays that revolve around the Toxics Release Inventory (TRI), a major environmental information disclosure program in the U.S., which discloses comprehensive information on the use of toxic chemicals and provides risk measures for various geographic units based on the disclosed information. Using survey data, the first essay examines the relationship between individuals' perception of environmental risk in their communities and their environmental attitudes and behavioral intentions for different racial groups. I find that perception of risk is strongly positively correlated with environmental concern and participatory intentions for all racial groups, especially for Whites and Blacks. But all racial groups' perception of risk deviates from the reality. If people possess the correct perception of risk, which is an attempted goal of information disclosure policy, the predicted concern and participatory intentions would increase significantly for Whites and Blacks, but less so for Hispanics. Through a survey experiment, the second essay directly evaluates the impacts of the provision of correct information about local environmental risk on individuals' attitudes and behavioral intentions. I find that people can correctly use the provided information to update their beliefs and attitudes based on how the new information compares with their prior knowledge, but the results also show that the provided information falls short of further changing behavioral intentions. The third essay studies the impacts of the TRI on the implementation of the Clean Air Act with differences-in-differences based approaches. I find that regulators significantly reduce the inspection and enforcement activities in the Clean Air Act on the group of facilities that disclose information in the TRI. Together, the three essays highlight the complexity of environmental information disclosure policy--it is potentially effective but with heterogenous impacts; it stimulates emotional and psychological responses but may fail to transform the responses to meaningful participation in the policymaking process; it could supplement the implementation of other environmental regulations but may also create loopholes for "green washing". The insights provided by this dissertation have important implications for the use and design of environmental information disclosure policy to maximize its promise and minimize its limitations to achieve effective, efficient, and equitable protection of the environment.