Environmental Policy in a Green Market

Jose Moraga-Gonzalez and Noemi Padrón-Fumero ()
Authors registered in the RePEc Author Service: Noemi Padron Fumero ()

Environmental & Resource Economics, 2002, vol. 22, issue 3, 419-447

Abstract: This paper studies the impact of some frequently-used environmental policies in a duopolistic market where purchasers are willing to pay more for less polluting goods. When consumers differ in their environmental awareness, a cleaner and a dirtier variant coexist in equilibrium. The higher the average willingness-to-pay for the good, the lower are variants' unit emissions but the higher are industrial aggregate effluents. A maximum unit emission standard reduces unit emissions of both variants, but boosts firms' sales and consequently increases industrial aggregate emissions. As a result, social welfare may be reduced. We also explore the effects of technological subsidies and product charges, including differentiation of charges. Copyright Kluwer Academic Publishers 2002

Keywords: environmentalists; environmentally differentiated duopoly; green consumption; green market; product charges; subsidies; unit emission standards (search for similar items in EconPapers)
Date: 2002
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Citations: View citations in EconPapers (110)

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DOI: 10.1023/A:1016060928997

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