Deriving an “optimal” Environmental Certification Standard with a Spatial Product Differentiation Model
نویسندگان
چکیده
Attempting to take advantage of recent displays of preferences for goods with superior levels of environmental performance, many governments and independent organizations have implemented a variety of programs designed to disseminate information on the environmental performance of companies or products. The most popular type of program is known as an eco-labeling or environmental certification program. Under this type of program, products meeting a specified level of environmental quality or performance are awarded a certification signifying this achievement. This paper presents an analysis of these programs, using a spatial product differentiation model to optimize the choice of the level of environmental performance necessary to acquire the certification. The social welfare effects of an optimized certification program are reviewed and compared to those of more traditional forms of environmental regulation. JEL Classification: D62, D82, L15, Q00
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