Green Antitrust: (More) Friendly Fire in the Fight against Climate Change
This is an updated and extended version of the paper published in: Holmes, S., D. Middelschulte and M. Snoep (eds.), Competition Law, Climate Change & Environmental Sustainability, Concurrences, 2021.
27 Pages Posted: 15 Dec 2020 Last revised: 11 Nov 2021
Date Written: December 15, 2020
The green antitrust movement aims to increase sustainability efforts by allowing restrictions of competition. Yet the economic evidence so far points to more, not less, competition as the right stimulus for inducing sustainability efforts. Incentives to produce more sustainably are stronger when firms compete than when they are allowed to make sustainability agreements. This is also true when firms are intrinsically motivated to promote sustainability. It is not good policy to relax the general competition rules in order to accommodate the rare genuine sustainability agreement. However well-intended, green antitrust risks damaging both competition and the environment. It will suppress the gathering market forces for companies to produce more sustainably, overburden competition authorities, invite abusive cartel greenwashing, and give the part of government that should promote sustainability further excuse to shun their responsibility for designing proper regulation.
Keywords: sustainability, competition, cartel, corporate social responsibility, greenwashing, regulation
JEL Classification: H41, K21, L40
Suggested Citation: Suggested Citation