Is Environmentalism the Right Strategy to Decarbonize the World?

Jacques Thisse, Marco Marini and Ornella Tarola

No 15355, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We study how the supply of environmentalism, which is defined by psychic benefits (costs) associated with the purchase of high-environmental (low-environmental) qualities, affects the way firms choose their products and the ensuing consequences for the global level of pollution. Contrary to general belief, a high supply of environmentalism does not give rise to a better environmental outcome because it endows firms with more market power which they use to maximize profits. By contrast, standard policy instruments such as a minimum quality standard or the use of greener technologies leads to a better ecological footprint.

Keywords: Environmentalism; Vertical product differentiation; Psychic costs and benefits; Environmental policy (search for similar items in EconPapers)
JEL-codes: D11 L13 Q50 (search for similar items in EconPapers)
Date: 2020-10
New Economics Papers: this item is included in nep-ene and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Working Paper: Is Environmentalism the Right Strategy to Decarbonize the World? (2021)
Working Paper: Is Environmentalism the Right Strategy to Decarbonize the World? (2020)
Working Paper: Is Environmentalism the Right Strategy to Decarbonize the World? (2020)
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