Date of This Version
12-23-2020
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.
Recommended Citation
Marini, Marco; Tarola, Ornella; and Thisse, Jacques-Francois, "Is Environmentalism the Right Strategy to Decarbonize the World?" (December 23, 2020). Fondazione Eni Enrico Mattei Working Papers. Paper 1318.
https://services.bepress.com/feem/paper1318