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Eco-labelling scheme, environmental protection, and protectionism

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  • Huilan Tian

Abstract

In this paper a model of international duopoly is developed involving competition in both prices and levels of environmental friendliness, and the implications of government policies are studied. It is shown that, contrary to the conventional wisdom, a regulatory increase in the minimum required level of environmental friendliness of imported goods may harm the home firm and may result in a rise in the volume of imported goods. Whether consumers lose or gain from such a regulatory increase depends on consumption spillover effects. We also show that, under certain conditions, the duopoly's equilibrium choice of levels of environmental friendliness is socially optimal.

Suggested Citation

  • Huilan Tian, 2003. "Eco-labelling scheme, environmental protection, and protectionism," Canadian Journal of Economics, Canadian Economics Association, vol. 36(3), pages 608-633, August.
    • Handle: RePEc:cje:issued:v:36:y:2003:i:3:p:608-633
    DOI: 10.1111/1540-5982.t01-2-00005
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    Citations

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    Cited by:

    1. Ma, Qing & Xu, Heng, 2018. "Strategic Corporate Social Responsibility and Spillover," MPRA Paper 89771, University Library of Munich, Germany.
    2. Masoud Ali Khalid & Narmen M. Ghafor, 2019. "The Impact of NTMs on Trade: Evidence from Developing Countries," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 8(1), pages 37-47, January.
    3. Giorgio Barba Navaretti & Giulia Felice & Emanuele Forlani & Paolo Garella, 2018. "Non-tariff measures and competitiveness," Development Working Papers 438, Centro Studi Luca d'Agliano, University of Milano, revised 01 Feb 2023.
    4. Marette Stéphan, 2018. "Illegitimate or Legitimate Non-Tariff Measures," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 16(2), pages 1-18, November.
    5. Stéphan Marette & John Beghin, 2017. "Are Standards Always Protectionist?," World Scientific Book Chapters, in: John Christopher Beghin (ed.), Nontariff Measures and International Trade, chapter 11, pages 179-192, World Scientific Publishing Co. Pte. Ltd..
    6. John C. Beghin & Heidi Schweizer, 2021. "Agricultural Trade Costs," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 43(2), pages 500-530, June.
    7. Kareem, Fatima Olanike & Martinez-Zarzoso, Inmaculada & Brümmer, Bernhard, 2016. "Protecting Health or Protecting Imports? Evidence from EU Non-Tariff Barriers," GlobalFood Discussion Papers 241267, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    8. Gilles Grolleau & Lisette Ibanez & Naoufel Mzoughi, 2007. "Industrialists hand in hand with environmentalists: how eco-labeling schemes can help firms to raise rivals’ costs," European Journal of Law and Economics, Springer, vol. 24(3), pages 215-236, December.
    9. Kareem, Fatima Olanike & Martínez-Zarzoso, Inmaculada & Brümmer, Bernhard, 2018. "Protecting health or protecting imports? Evidence from EU non-tariff measures," International Review of Economics & Finance, Elsevier, vol. 53(C), pages 185-202.
    10. Planer-Friedrich, Lisa & Sahm, Marco, 2017. "Strategic corporate social responsibility," BERG Working Paper Series 124, Bamberg University, Bamberg Economic Research Group.
    11. Swinnen, Johan F.M. & Vandemoortele, Thijs, 2009. "Trade, Development, and the Political Economy of Public Standards," 113th Seminar, September 3-6, 2009, Chania, Crete, Greece 58139, European Association of Agricultural Economists.
    12. Soham Baksi & Pinaki Bose, 2007. "Credence Goods, Efficient Labelling Policies, and Regulatory Enforcement," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 37(2), pages 411-430, June.
    13. Ishikawa, Jota & 石川, 城太 & Okubo, Toshihiro, 2010. "Environmental Standards under International Oligopoly," CCES Discussion Paper Series 32, Center for Research on Contemporary Economic Systems, Graduate School of Economics, Hitotsubashi University.
    14. 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.
    15. Lisa Planer-Friedrich & Marco Sahm, 2017. "Strategic Corporate Social Responsibility," CESifo Working Paper Series 6506, CESifo.
    16. Marette Stéphan, 2016. "Non-Tariff Measures When Alternative Regulatory Tools Can Be Chosen," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 14(1), pages 1-17, May.
    17. Zhang, Linghong & Wang, Jingguo & You, Jianxin, 2015. "Consumer environmental awareness and channel coordination with two substitutable products," European Journal of Operational Research, Elsevier, vol. 241(1), pages 63-73.
    18. Li, Yi, 2020. "Competing eco-labels and product market competition," Resource and Energy Economics, Elsevier, vol. 60(C).
    19. Lisa Planer-Friedrich & Marco Sahm, 2020. "Strategic corporate social responsibility, imperfect competition, and market concentration," Journal of Economics, Springer, vol. 129(1), pages 79-101, January.

    More about this item

    JEL classification:

    • F00 - International Economics - - General - - - General

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