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Polarisation of Eco-Labelling Strategies

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  • Vera Danilina

    () (Aix-Marseille Univ., CNRS, EHESS, Centrale Marseille, AMSE)

Abstract

Growing ecological concerns give rise to salient discussions of green policy impact within different social sciences domains. This research studies the outcomes of voluntary environmental labelling in autarky and upon trade integration in the presence of two types of heterogeneity, across countries and across producers. It investigates the impact of the two main types of eco-labels – multiple-criteria-based programmes (ISO Type I) and self-declared environmental claims (ISO Type II), both of which are simultaneously introduced due to the environmental concerns of consumers. The model illustrates the polarisation of eco-labels when the least productive firms tend to avoid green strategies, lower-middle productive and the most efficient firms are incentivized to greenwash, and the upper-middle productive firms choose trustful programmes. It also shows that voluntary green restrictions lead to substantial productivity effects in the market upon opening to international trade, conditionally, depending on the type of the labelling and the relative degree of environmental awareness across trading countries. The model predicts average market productivity losses and within segments productivity gains for the relatively more eco-concerned country, while the effects for the relatively less eco-concerned country are the opposite.

Suggested Citation

  • Vera Danilina, 2017. "Polarisation of Eco-Labelling Strategies," Working Papers 2017.26, FAERE - French Association of Environmental and Resource Economists.
  • Handle: RePEc:fae:wpaper:2017.26
    as

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    File URL: http://faere.fr/pub/WorkingPapers/Danilina_FAERE_WP2017.26.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    eco-labelling; trade integration; voluntary environmental regulation; firms productivity; firm heterogeneity;

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment

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