In this clearly argued and well-written book, Aseem Prakash and Matthew Potoski study voluntary environmental regulations, focusing most of their attention on one particular institution—ISO 14001—a certification program in which facilities voluntarily agree to put in place an environmental management system. They provide a theoretically informed and carefully designed study of this program, analyzing the conditions under which firms choose to participate and whether their participation improves their environmental and regulatory performance.

The central argument of the book is that voluntary environmental programs such as ISO 14001 can be best understood through the economic theory of club goods. The authors are traversing familiar theoretical ground about institutional solutions to collective-action dilemmas. What is new and illuminating is the careful application of club theory to voluntary environmental programs. In this way, the book departs from much of the extant literature on this subject—and environmental policy reforms more generally—due to its strong theoretical grounding.

Prakash and Potoski develop the idea of “green clubs”—nongovernmental institutions that require voluntary members to incur private costs by adopting club standards (an internal environmental management system) in exchange for generating a mix of public goods (improved environmental quality), private goods (facility-level environmental gains), and club benefits (reputation for being good environmental stewards). Club benefits are of particular importance since they are the ones that clubs can offer their members, yet exclude from nonmembers. Clubs, thus, offer potential members a benefit for implementing an environmental standard that they would not gain from taking unilateral action, and create what the authors characterize as a potential “win-all-around scenario: participating firms with stakeholders' rewards for their progressive environmental action, the general public enjoys the public goods, and the club sponsors enjoy the heightened prestige for producing the public good” (p. 53).

Green clubs, however, are not all created equal. The authors develop a typology using two dimensions of club attributes: the relative strength of club standards and the relative credibility of club enforcement rules. Within this typology, ISO 14001 is an example of a club with lenient standards—facilities are required to adopt an environmental management system, but not to reduce their environmental impact—and credible enforcement rules—the environmental management system is subject to the validation of a third-party auditor that itself must be accredited by a national standards association. The authors' conceptual framework not only motivates their empirical analysis of ISO 14001 but also provides scholars interested in pursuing research on voluntary environmental regulations with a set of interesting questions pertaining to the other, unstudied categories in their typology.

The two empirical chapters address several important questions about ISO 14001: What types of facilities join the program, and does membership lead to better environmental and regulatory performance? The authors address the first question with a brief but persuasive comparative case study of the United States and the UK, by examining cross-national variation in aggregate facility participation in ISO 14001, and with a more detailed analysis of U.S. facilities. The general conclusion is that firms that most benefit from the brand identity of ISO 14001 are those more likely to join. Prakash and Potoski then address whether ISO 14001 participants are better environmental performers. Attributing environmental outcomes to ISO 14001 certification is difficult because it is not outcome based and it is tricky to establish the right counterfactual. Using a quasi-experimental approach, the authors find evidence that participant facilities emit modestly less toxic pollution and spend a little less time out of compliance with regulations than do nonparticipants.

Despite the many strengths of the empirical work, there are a couple of shortcomings to note. First, we learn far too little about the types of facilities that join ISO 14001, either in the United States or in other countries. Descriptive analysis of ISO 14001 participants would have been helpful in order to set up the data analysis. Much of the econometric analysis focuses on about 3,700 U.S. facilities regulated as “major sources” under the federal Clean Air Act. It is no small feat to put together this type of detailed facility-level data set, and for that the authors deserve significant credit. Nevertheless, they do not provide any justification for their selection of facilities, which is important because ISO 14001 membership is quite rare among them. Only 4% of the facilities studied had joined ISO 14001, representing only 6% of the total ISO 14001 facilities in the United States. This raises some significant questions that were left unaddressed in the book. If only 4% of the major sources of air pollution participate in this green club, what facilities in the United States do participate? If they are only large, multinational firms within particular industries, or facilities concentrated in particular states or regions, this tells us a lot about the reach (or lack thereof) of ISO 14001.

Second, the book does not sufficiently investigate the value of the exclusive benefits offered by the club. These are the benefits that club theory suggests provide the inducement to get firms to participate in ISO 14001. The econometric analysis somewhat gets to this issue, showing that firms are more likely to join the program in policy contexts where regulators have the administrative flexibility to reward them or where surrounding populations have the political and social resources to understand the value of ISO 14001 certification. Yet it is still unclear if ISO 14001 generates the hypothesized reputational benefits. If yes, we should observe changed regulator attitudes (the authors provide some limited interview evidence that speaks to this), changed views among business partners, and changed views of the companies among consumers and local communities. Although this type of evidence is more difficult to come by, it would strengthen their case.

Notwithstanding these minor shortcomings, The Voluntary Environmentalist is required reading for scholars of environmental politics and policy, and I expect the book to become a staple on graduate and advanced undergraduate syllabi. Prakash and Potoski have successfully addressed an important public policy topic in a theoretically grounded and empirically sophisticated manner.