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Eco-Labeling Consequences in General Equilibrium: A Graphical Assessment

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  • Stephen K. Swallow
  • Roger A. Sedjo

Abstract

International environmental groups propose to implement new standards of forest management through programs that certify producers who meet criteria to enhance biodiversity or sustainability. These producers could earn an "eco-label" that identifies their products for consumers. We consider whether a market economy might generate feedbacks that produce undesirable side effects as consumers respond to price changes. While the general case is ambiguous, the theoretical framework shows the potential that certification may lead to a reallocation of land toward less ecologically sustainable uses, with the possibility of sufficient impact to diminish global biodiversity or sustainability of forest products

Suggested Citation

  • Stephen K. Swallow & Roger A. Sedjo, 2000. "Eco-Labeling Consequences in General Equilibrium: A Graphical Assessment," Land Economics, University of Wisconsin Press, vol. 76(1), pages 28-36.
  • Handle: RePEc:uwp:landec:v:76:y:2000:i:1:p:28-36
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    References listed on IDEAS

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    Cited by:

    1. Brécard, Dorothée, 2014. "Consumer confusion over the profusion of eco-labels: Lessons from a double differentiation model," Resource and Energy Economics, Elsevier, vol. 37(C), pages 64-84.
    2. Swallow, Stephen K., 2013. "Demand-side Value for Ecosystem Services and Implications for Innovative Markets: Experimental Perspectives on the Possibility of Private Markets for Public Goods," Agricultural and Resource Economics Review, Cambridge University Press, pages 33-56.
    3. Amacher, Gregory S. & Koskela, Erkki & Ollikainen, Markku, 2004. "Environmental quality competition and eco-labeling," Journal of Environmental Economics and Management, Elsevier, vol. 47(2), pages 284-306, March.
    4. Kitti, Mitri & Heikkilä, Jaakko & Huhtala, Anni, 2009. "‘Fair’ policies for the coffee trade – protecting people or biodiversity?," Environment and Development Economics, Cambridge University Press, pages 739-758.
    5. 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.
    6. Hamilton, Stephen F. & Zilberman, David, 2006. "Green markets, eco-certification, and equilibrium fraud," Journal of Environmental Economics and Management, Elsevier, vol. 52(3), pages 627-644, November.
    7. Jackson, Lee Ann, 2003. "Who Benefits from Quality Labelling? Segregation Costs, International Trade and Producer Outcomes," 2003 Conference (47th), February 12-14, 2003, Fremantle, Australia 57897, Australian Agricultural and Resource Economics Society.
    8. Johnston, Robert J. & Roheim, Cathy A. & Donath, Holger & Asche, Frank, 2001. "Measuring Consumer Preferences For Ecolabeled Seafood: An International Comparison," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 26(01), July.
    9. Roger A. Sedjo & Stephen K. Swallow, 2002. "Voluntary Eco-Labeling and the Price Premium," Land Economics, University of Wisconsin Press, vol. 78(2), pages 272-284.
    10. Cohen, Mark A. & Vandenbergh, Michael P., 2012. "The potential role of carbon labeling in a green economy," Energy Economics, Elsevier, vol. 34(S1), pages 53-63.
    11. Guilherme Mendes Resende & Alexandre Xavier Ywata Carvalho & Patrícia Alessandra Morita Sakowski & Túlio Antonio Cravo, 2016. "Evaluating multiple spatial dimensions of economic growth in Brazil using spatial panel data models," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 56(1), pages 1-31, January.
    12. Crespi, John M. & Marette, Stephan, 2003. "Some Economic Implications Of Public Labeling," Journal of Food Distribution Research, Food Distribution Research Society, vol. 34(03), November.
    13. repec:kap:iaecre:v:13:y:2007:i:1:p:47-64 is not listed on IDEAS
    14. Kant, Shashi, 2003. "Extending the boundaries of forest economics," Forest Policy and Economics, Elsevier, vol. 5(1), pages 39-56, January.
    15. Monteiro, Jose-Antonio, 2010. "Eco-label Adoption in an Interdependent World," MPRA Paper 20268, University Library of Munich, Germany.
    16. Robert Innes & George Frisvold, 2009. "The Economics of Endangered Species," Annual Review of Resource Economics, Annual Reviews, vol. 1(1), pages 485-512, September.
    17. Kotchen, Matthew J., 2005. "Impure public goods and the comparative statics of environmentally friendly consumption," Journal of Environmental Economics and Management, Elsevier, vol. 49(2), pages 281-300, March.
    18. Sedjo, Roger & Swallow, Stephen, 1999. "Eco-Labeling and the Price Premium," Discussion Papers dp-00-04, Resources For the Future.
    19. Wanki Moon & Wojciech J. Florkowski & Bernhard Brückner & Ilona Schonhof, 2002. "Willingness to Pay for Environmental Practices: Implications for Eco-Labeling," Land Economics, University of Wisconsin Press, vol. 78(1), pages 88-102.
    20. Murray, Brian C. & Abt, Robert C., 2001. "Estimating price compensation requirements for eco-certified forestry," Ecological Economics, Elsevier, vol. 36(1), pages 149-163, January.
    21. Toshihiro Uchida, 2007. "Information Disclosure Policies: When Do They Bring Environmental Improvements?," International Advances in Economic Research, Springer;International Atlantic Economic Society, pages 47-64.
    22. 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.
    23. Amacher, Gregory & Koskela, Erkki & Ollikainen, Markku, 2003. "Environmental Quality Competition and Eco-labeling," Discussion Papers 848, The Research Institute of the Finnish Economy.
    24. Bennear, Lori S. & Olmstead, Sheila M., 2008. "The impacts of the "right to know": Information disclosure and the violation of drinking water standards," Journal of Environmental Economics and Management, Elsevier, vol. 56(2), pages 117-130, September.

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    JEL classification:

    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General

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