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Using data on 57 German industries we find that industries participating in voluntary agreements reduce their CO2 emissions up to 30% compared to industries not participating in voluntary agreements for the period 1995 to 2010. The success of these agreements can be explained by an initially credible threat of the regulatory agency to impose taxes and the positive publicity created by reducing CO2 emissions.

Voluntary agreements and CO<SUB align="right">2 reduction: an empirical assessment of German industries