Douadia Bougherara

Making or Buying Environmental Public Goods: Do Consumers Care?

Firms may voluntarily abate pollution using one of two options: internalizing their own external effects and incurring abatement costs (“making”), or delegating environmental protection by purchasing offsets (“buying”). We aim to elicit consumers’ willingness to pay for producers’ use of the “making” option as compared to the “buying” option, controlling for spatial effects (joint local public goods), and level of greenhouse gas emissions. Using a stated-choice survey of 722 respondents, we find consumers are more willing to pay for a “making” policy. Consumers do significantly care for the producers’ use of offsets when the level of local externalities is controlled for. (JEL Q54, Q58)

Designing Ecolabels In Order To Mitigate Market Failures

For the market for ecofriendly characteristics of agrofood products to function effectively, means of mitigating asymmetric information, informational overload and public goods properties are necessary. Ecolabel success requires a design and an implementation capable of mitigating simultaneously these three sources of market failures. Our contribution differs from many to date by (1) introducing and analyzing the informational overload as a source of market failure and (2) considering the ecolabel, not only as a tool to re-establish information symmetry between the producer and consumer but also as a way to overcome informational overload and public goods problems. We analyze how these sources of market failures may be mitigated by providing information perceived as trustworthy, tying credence and public attributes to verifiable and private attributes and designing the ecolabel as a cognitive support for consumers. We provide an exploratory qualitative study of several French ecolabels to stress how they more or less succeed in attenuating the identified sources of market failures. Several implications for policymakers and managers are stressed. We conclude by suggesting several issues requiring further investigations. JEL Classification Numbers: D11, D21, L15

Environmental Effectiveness of Voluntary Approaches: Does the Number of Participants Matter?

A poorly-selected level of pollution per firm can lead to a sub-optimal net effect on the environment. We define the optimal individual pollution level required for participants to maximize overall environmental effectiveness. We stress several implications for economic policy.