Discussion Paper Details
Please find the details for DP15355 in an easy to copy and paste format below:
Title: Is Environmentalism the Right Strategy to Decarbonize the World?
Author(s): Marco Marini, Ornella Tarola and Jacques-François Thisse
Publication Date: October 2020
Keyword(s): Environmental policy, Environmentalism, Psychic Costs and Benefits and Vertical Product Differentiation
Programme Area(s): Industrial Organization, International Trade and Regional Economics and Public Economics
Abstract: We study how the supply of environmentalism, which is defined by psychic benefits (costs) associated with the purchase of high-environmental (low-environmental) qualities, affects the way firms choose their products and the ensuing consequences for the global level of pollution. Contrary to general belief, a high supply of environmentalism does not give rise to a better environmental outcome because it endows firms with more market power which they use to maximize profits. By contrast, standard policy instruments such as a minimum quality standard or the use of greener technologies leads to a better ecological footprint.
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Marini, M, Tarola, O and Thisse, J. 2020. 'Is Environmentalism the Right Strategy to Decarbonize the World?'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=15355