Eco-Labelling and the Gains from Agricultural and Food Trade: A Ricardian Approach

Kari E.R. Heerman and Ian Sheldon

No 235973, 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts from Agricultural and Applied Economics Association

Abstract: Following a modern Ricardian approach, trade in environmental products with eco‐labelling is modelled. Based on the model, expressions are derived for the share of products an importer purchases from a specific exporter for low‐cost and environmentally‐friendly technologies. It is then shown that, using bilateral trade and production data, the share equation for low‐cost‐technologies can be estimated, from which parameters describing trade costs and average productivity can then be retrieved. Using the latter parameters, it is also shown how the share equation for environmentally‐friendly technologies can then be used to retrieve a parameter describing eco‐labelling costs. The consumer and environmental gains from eco‐labelling are also analyzed, along with a discussion and comparison of the effects of mutual recognition versus harmonization of countries’ eco‐labelling regimes.

Keywords: Agricultural and Food Policy; Environmental Economics and Policy; International Relations/Trade (search for similar items in EconPapers)
Pages: 30
Date: 2016
New Economics Papers: this item is included in nep-agr, nep-env and nep-int
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea16:235973

DOI: 10.22004/ag.econ.235973

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