Environmental and Resource Economics

, Volume 18, Issue 1, pp 113–127

Is Ecolabelling a Reliable Environmental Policy Measure?

  • Cesare Dosi
  • Michele Moretto
Article

Abstract

The rationale of ecolabelling is to enable firms to reap the willingness-to-payfor the environmental attributes of goods by helping consumers toidentify ``green'' products. By so doing, ecolabelling is expected tostimulate spontaneous environmental innovation and to reduce aggregatedpollution. Our analysis however outlines situations under whichecolabelling could induce perverse effects, namely increased investment inconventional technologies before the labels are awarded, and examineswhether restricting the issue of labels could constitute an antidote.

ecolabelling environmental policy investment decisions irreversibility real option theory 

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Copyright information

© Kluwer Academic Publishers 2001

Authors and Affiliations

  • Cesare Dosi
    • 1
  • Michele Moretto
    • 2
  1. 1.Department of EconomicsUniversity of PadovaPadovaItaly
  2. 2.Department of EconomicsUniversity of PadovaPadovaItaly

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