Emission Taxes and Standards When Products are Vertically Differentiated in Environment Quality

Consumers' increased willingness to pay a price premium for greener products stimulates firms to compete in environmental regulations. This paper uses a model of vertical product differentiation to study how an emission tax affects environmental quality competition, aggregate emissions, and soc...

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Bibliographic Details
Published inIDEAS Working Paper Series from RePEc
Main Author Lombardini-Riipinen, C
Format Paper
LanguageEnglish
Published St. Louis Federal Reserve Bank of St. Louis 01.01.2001
Subjects
Product differentiation
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Summary:Consumers' increased willingness to pay a price premium for greener products stimulates firms to compete in environmental regulations. This paper uses a model of vertical product differentiation to study how an emission tax affects environmental quality competition, aggregate emissions, and social welfare when there is overcompliance.