Is Environmentalism the Right Strategy to Decarbonize the World?

Marco Marini, Ornella Tarola and Jacques-François Thisse
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Jacques-François Thisse: CORE-UCLouvain, HSE University and CEPR

No 2020.31, Working Papers from Fondazione Eni Enrico Mattei

Abstract: We study how the supply of environmentalism, which is de?ned by psychic bene?ts (costs) associated with the purchase of high-environmental (low-environmental) qualities, a¤ects the way ?rms 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 ?rms with more market power which they use to maximize pro?ts. 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; Psychic Costs and Benefi?ts; Vertical Product Differentiation; Environmental Policy (search for similar items in EconPapers)
JEL-codes: D11 L13 Q50 (search for similar items in EconPapers)
Date: 2020-12
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 (2)

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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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Persistent link: https://EconPapers.repec.org/RePEc:fem:femwpa:2020.31

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