Is Ecolabelling a Reliable Environmental Policy Measure?

Cesare Dosi and Michele Moretto
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Cesare Dosi: University of Padova and Fondazione Eni Enrico Mattei

No 1999.9, Working Papers from Fondazione Eni Enrico Mattei

Abstract: Ecolabel award schemes have become increasingly popular. Their rationale is to enable (concerned) consumers to identify "green" products. By so doing, ecolabelling should stimulate environmental innovation, and induce firms to reduce the supply of conventional (polluting) products. Our analysis however points out that the two phenomena are not necessarily correlated. Through a dynamic model of investment decisions, the paper outlines the situations under which ecolabelling could induce perverse effects (increased investment in conventional technologies) and examines whether setting quantitative restrictions on the issuing of labels could constitute an antidote.

Keywords: Ecolabel; Green Products; Environmental Policy; Environmental Innovation (search for similar items in EconPapers)
JEL-codes: O38 Q28 (search for similar items in EconPapers)
Date: 1999-01
New Economics Papers: this item is included in nep-agr, nep-ene, nep-env, nep-pbe and nep-pub
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Journal Article: Is Ecolabelling a Reliable Environmental Policy Measure? (2001)
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Persistent link: https://EconPapers.repec.org/RePEc:fem:femwpa:1999.9

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