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Is Ecolabelling a Reliable Environmental Policy Measure?

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Author Info
Cesare Dosi ()
Michele Moretto ()
Abstract

The rationale of ecolabelling is to enable firms to reap the willingness-to-payfor the environmental attributes of goods by helping consumers toidentify ``green'' products. By so doing, ecolabelling is expected tostimulate spontaneous environmental innovation and to reduce aggregatedpollution. Our analysis however outlines situations under whichecolabelling could induce perverse effects, namely increased investment inconventional technologies before the labels are awarded, and examineswhether restricting the issue of labels could constitute an antidote. Copyright Kluwer Academic Publishers 2001

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File URL: http://hdl.handle.net/10.1023/A:1011101604084
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Publisher Info
Article provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

Volume (Year): 18 (2001)
Issue (Month): 1 (January)
Pages: 113-127
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Handle: RePEc:kap:enreec:v:18:y:2001:i:1:p:113-127

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Related research
Keywords: ecolabelling; environmental policy; investment decisions; irreversibility; real option theory;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. He, Hua & Pindyck, Robert S., 1992. "Investments in flexible production capacity," Journal of Economic Dynamics and Control, Elsevier, vol. 16(3-4), pages 575-599. [Downloadable!] (restricted)
    Other versions:
  2. Mattoo, Aaditya & Singh, Harsha V, 1994. "Eco-labelling: Policy Considerations," Kyklos, Blackwell Publishing, vol. 47(1), pages 53-65.
  3. Susan Athey & Armin Schmutzler, 1995. "Product and Process Flexibility in an Innovative Environment," RAND Journal of Economics, The RAND Corporation, vol. 26(4), pages 557-574, Winter. [Downloadable!] (restricted)
  4. Dixit, Avinash K, 1989. "Entry and Exit Decisions under Uncertainty," Journal of Political Economy, University of Chicago Press, vol. 97(3), pages 620-38, June. [Downloadable!] (restricted)
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  5. Andrew B. Abel & Avinash K. Dixit & Janice B. Eberly & Robert S. Pindyck, . "Options, the Value of Capital, and Investment," Rodney L. White Center for Financial Research Working Papers 15-95, Wharton School Rodney L. White Center for Financial Research.
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  6. Bertola, Giuseppe, 1998. "Irreversible investment," Research in Economics, Elsevier, vol. 52(1), pages 3-37, March. [Downloadable!] (restricted)
  7. Michael Kuhn, 1999. "Green Lemons - Environmental Labels and Entry into an Environmentally Differentiated Market under Asymmetric Information," Thuenen-Series of Applied Economic Theory 20, University of Rostock, Institute of Economics, Germany. [Downloadable!]
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Massimiliano Mazzanti & Roberto Zoboli, 2006. "Examining the Factors Influencing Environmental Innovations," Working Papers 2006.20, Fondazione Eni Enrico Mattei. [Downloadable!]
  2. Christopher Bruce & Andrea Laroiya, 2007. "The Production of Eco-Labels," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 36(3), pages 275-293, March. [Downloadable!] (restricted)
  3. Thomas Bue Bjorner & Lars Garn Hansen & Clifford S. Russell, 2002. "Environmental Labelling and Consumer's Choice - An Empirical Analysis of the Effect of the Nordic Swan," Working Papers 0203, Department of Economics, Vanderbilt University. [Downloadable!]
    Other versions:
  4. Junyi Shen & Tatsuyoshi Saijo, 2007. "Does energy efficiency label alter consumersf purchase decision? A latent class approach on Shanghai data," OSIPP Discussion Paper 07E005, Osaka School of International Public Policy, Osaka University. [Downloadable!]
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