Global environmental problems, voluntary action and government intervention

The global community faces several very pressing environmental challenges such as climate change, depletion of the high-sea fisheries, and unprecedented rates of biodiversity loss. Governments are in the process of designing environmental policies to address these problems unilaterally, but also collectively (in the form of international agreements). Meanwhile, private citizens and firms are observed to voluntarily take protective action. Whereas standard game theory would predict that formal government intervention can only provide an extra stimulus for protective action, there are many examples of external interventions decreasing agents' propensity to undertake socially desired activities. This chapter provides an overview of the literature on the circumstances under which formal interventions can crowd out voluntary contributions to the common good. Furthermore, it is discussed how the effectiveness of government intervention may be improved by preserving the agents' intrinsic motivation to contribute to the common good.