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Global Resources and Eco-labels: a Neutrality Result

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  • Peter E. Robertson

Abstract

I evaluate the effectiveness of eco-labeling programs that are designed to mitigate transboundary environmental problems. A simple two-country model is considered, where consumers in each country value a common environmental resource. It is shown that, in equilibrium, the level of damage is independent of whether one or both countries have eco-labeling policies. Hence, the implementation of an existing eco-labeling program by a second country may have no effect, or a very limited effect, on the stock of the environmental resource. The result highlights potential limitations of eco-labeling policies in this international context. Copyright © 2007 The Author; Journal compilation © 2007 Blackwell Publishing Ltd.

Suggested Citation

  • Peter E. Robertson, 2007. "Global Resources and Eco-labels: a Neutrality Result," Review of International Economics, Wiley Blackwell, vol. 15(4), pages 735-743, September.
  • Handle: RePEc:bla:reviec:v:15:y:2007:i:4:p:735-743
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    References listed on IDEAS

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    1. Teisl, Mario F. & Roe, Brian & Hicks, Robert L., 2002. "Can Eco-Labels Tune a Market? Evidence from Dolphin-Safe Labeling," Journal of Environmental Economics and Management, Elsevier, vol. 43(3), pages 339-359, May.
    2. Basu, Arnab K. & Chau, Nancy H. & Grote, Ulrike, 2004. "On export rivalry and the greening of agriculture--the role of eco-labels," Agricultural Economics, Blackwell, vol. 31(2-3), pages 135-147, December.
    3. Cornes,Richard & Sandler,Todd, 1996. "The Theory of Externalities, Public Goods, and Club Goods," Cambridge Books, Cambridge University Press, number 9780521477185, May.
    4. Bjorner, Thomas Bue & Hansen, L.G.Lars Garn & Russell, Clifford S., 2004. "Environmental labeling and consumers' choice--an empirical analysis of the effect of the Nordic Swan," Journal of Environmental Economics and Management, Elsevier, vol. 47(3), pages 411-434, May.
    5. Daniel Melser & Peter E. Robertson, 2005. "Eco-labelling and the Trade-Environment Debate," The World Economy, Wiley Blackwell, vol. 28(1), pages 49-62, January.
    6. Stefanie Kirchhoff, 2000. "Green Business and Blue Angels," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 15(4), pages 403-420, April.
    7. Loureiro, Maria L. & Lotade, Justus, 2005. "Do fair trade and eco-labels in coffee wake up the consumer conscience?," Ecological Economics, Elsevier, vol. 53(1), pages 129-138, April.
    8. Jinji, Naoto, 2003. "Mandatory Labelling or Import Ban?: Two-Country Trade with Biotechnology Products," Discussion Papers 2003-03, Graduate School of Economics, Hitotsubashi University.
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    Cited by:

    1. Martin Richardson & Frank Stähler, 2016. "Buy Local? Governmental Incentives to ‘Inform’ Consumers," The World Economy, Wiley Blackwell, vol. 39(5), pages 636-650, May.
    2. Sun, Junxiu & Yin, Haitao & Wang, Feng, 2014. "Net private benefits of purchasing eco-labeled air conditioners and subsidization policies in China," Energy Policy, Elsevier, vol. 73(C), pages 186-195.
    3. Li, Yuanhao & van 't Veld, Klaas, 2015. "Green, greener, greenest: Eco-label gradation and competition," Journal of Environmental Economics and Management, Elsevier, vol. 72(C), pages 164-176.
    4. Wei, Wenjie, 2014. "Welfare and Environmental Effects of Subsidies and Tariffs in North-South Trade in Renewable Energy Equipment," 2014 Conference (58th), February 4-7, 2014, Port Maquarie, Australia 165887, Australian Agricultural and Resource Economics Society.

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