Is Ecolabelling a Reliable Environmental Policy Measure?

Fondazione Eni Enrico Mattei Working Paper No. 9.99

22 Pages Posted: 5 Apr 1999

See all articles by Cesare Dosi

Cesare Dosi

University of Padua - Department of Economics; CRIEP - Centro Universitario di Ricerca sull’Economia Pubblica

Michele Moretto

University of Padua, Dep of Economics and Management

Date Written: January 1999

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 invesrment in conventional technologies), and examines whether setting quantitative restrictions on the issuing of labels could constitute an antidote.

Note: Some parts of the electronic paper look unclear on the screen but are clear when printed.

JEL Classification: Q28, Q38

Suggested Citation

Dosi, Cesare and Moretto, Michele, Is Ecolabelling a Reliable Environmental Policy Measure? (January 1999). Fondazione Eni Enrico Mattei Working Paper No. 9.99, Available at SSRN: https://ssrn.com/abstract=158332 or http://dx.doi.org/10.2139/ssrn.158332

Cesare Dosi (Contact Author)

University of Padua - Department of Economics; CRIEP - Centro Universitario di Ricerca sull’Economia Pubblica ( email )

via Del Santo 33
Padova, 35123
Italy
049+8274049 (Phone)
049+8274221 (Fax)

Michele Moretto

University of Padua, Dep of Economics and Management ( email )

via Del Santo 33
Padova, 35123
Italy
+39 049 8274265 (Phone)
+39 049 8274211 (Fax)