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The aim of this paper is to identify (1) the categories in which it is easier or more difficult for local municipalities to implement green purchasing and (2) the role and extent of green purchasing policy (GPP) in promoting green purchasing. To characterize the green purchasing potential of different categories, we examine the green purchasing rate, or the ratio of green products/services to total products/services purchased, of 21 categories of items. We employ data from a unique survey conducted by the Japanese Ministry of the Environment, which provides data on green procurement in municipalities. We observe that air conditioners suffer from low green purchasing rates, whereas most municipalities purchase green products in the paper products and stationery categories. We also examine the relationship between green purchasing rates and GPPs to identify the role and extent of GPPs. Our regression analyses reveal that the presence of a GPP is associated with higher implementation and measurement rates of green purchasing. This pattern is particularly evident for the categories in which many municipalities without GPPs purchase green products but, in most cases, do not measure their green purchasing rate.

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To explain why regulators continue to implement voluntary emission reduction programs (VP), this study presents a model with multiple polluting firms, a trade association, a regulator, and a legislator who sets a mandatory standard and is politically influenced by the trade association, a representative of the polluting firms. We show that the regulator can implement a voluntary program, which generates less social cost and more aggregate abatement than a mandatory standard. We also find that assigning the greatest importance to the abatement rates of individual firms generates the highest level of social welfare if the damage due to individual firms' emissions does not depend on other firms' emissions. However, the importance of the participation rate will increase relatively to the abatement rate as the damage due to individual firms' emissions becomes more sensitive to other firms' emissions.