Environmental Policy and the Energy Eficiency of Vertically Differentiated Consumer Products

Magdalena Brzeskot and Alexander Haupt ()

No 6, Discussion Paper Series RECAP15 from RECAP15, European University Viadrina, Frankfurt (Oder)

Abstract: We analyse optimal environmental policies in a market that is vertically differentiated in terms of the energy efficiency of products. Considering energy taxes, subsidies to firms for investment in more eco-friendly products, and product standards, we are particularly interested in how distributional goals in addition to environmental goals shape the choice of policy instruments. We Önd that an industry-friendly government levies an energy tax to supplement a lax product standard, but shies away from subsidies to firms. By contrast, a consumer-friendly government relies heavily on a strict product standard and additionally implements a moderate subsidy to firms, but avoids energy taxes.

Keywords: Energy tax; energy efficiency standard; subsidy; vertically differentiated markets; product quality (search for similar items in EconPapers)
JEL-codes: L13 Q48 Q58 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2012-07
New Economics Papers: this item is included in nep-ene, nep-env, nep-reg and nep-res
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Journal Article: Environmental policy and the energy efficiency of vertically differentiated consumer products (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:euv:dpaper:006

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