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On export rivalry and the greening of agriculture--the role of eco-labels

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  • Basu, Arnab K.
  • Chau, Nancy H.
  • Grote, Ulrike

Abstract

Why do some countries establish their own national eco-labeling programs and some do not? In this paper, we provide both theoretical arguments and empirical evidence suggesting that the answer to this question can shed new light on three questions that have taken center-stage in the trade and environment debate: (i) does trade exacerbate the exploitation of the environment; (ii) are countries competing in export markets engaged in a race to the bottom in environmental performance; and (iii) do market-based environmental instruments benefit the rich and hurt the poor? Our analysis shows that a country's decision to adopt eco-labeling programs is systematically related to a country's: (i) stage of development, (ii) existing environmental performance in the absence of eco-labeling initiatives, and (iii) scale of production. To be appended to this set of essentially non-trade related factors is a set of additional factors that apply in the presence of export rivalry. These include (i) a country's comparative cost advantage and net export orientation, and (ii) the extent of peer or strategic interactions between export competitors.
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  • 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.
  • Handle: RePEc:eee:agecon:v:31:y:2004:i:2-3:p:135-147
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    References listed on IDEAS

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    1. Nancy H. Chau & Ravi Kanbur, 2006. "The Race to the Bottom, from the Bottom," Economica, London School of Economics and Political Science, vol. 73(290), pages 193-228, May.
    2. Basu, Arnab K. & Chau, Nancy H., 2001. "Market Access Rivalry and Eco-labeling Standards: Are Eco-labels Non-tariff Barriers in Disguise?," Working Papers 127662, Cornell University, Department of Applied Economics and Management.
    3. Basu, Arnab K & Chau, Nancy H, 1998. "Asymmetric Country-of-Origin Effects on Intraindustry Trade and the International Quality," Review of Development Economics, Wiley Blackwell, vol. 2(2), pages 140-166, June.
    4. Arnab K. Basu & Nancy H. Chau & Ulrike Grote, 2003. "Eco-Labeling and Stages of Development," Review of Development Economics, Wiley Blackwell, vol. 7(2), pages 228-247, May.
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    Cited by:

    1. 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.
    2. Basu, Arnab K. & Hicks, Robert L., 2008. "Label Performance and the Willingness to Pay for Fair Trade Coffee: A Cross-National Perspective," Discussion Papers 44336, University of Bonn, Center for Development Research (ZEF).
    3. 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.
    4. Monteiro, Jose-Antonio, 2010. "Eco-label Adoption in an Interdependent World," MPRA Paper 20268, University Library of Munich, Germany.
    5. Grote, Ulrike, 2009. "Environmental Labeling, Protected Geographical Indications and the Interests of Developing Countries," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 10(1).
    6. Andrea Cristina Dorr & Jaqueline Carla Guse & Rubia Strassburger & Aline Zulian & Marivane Vestena Rossato, 2012. "Economic Analysis of the Marketing Channels in Citrus Industry in Brazil," Annals of the University of Petrosani, Economics, University of Petrosani, Romania, vol. 12(1), pages 93-108.

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