Publications by PSE researchers

How do environmental information and awareness interact to improve environmental quality by changing consumer behavior and firm strategies? This article provides theoretical insights using an original differentiation model within a general framework whose specific cases have been studied previously. On the demand side, only informed consumers differentiate brown from green product quality, while uninformed consumers consider these perfect substitutes. Moreover, all informed consumers value the green product and devalue the brown product as a result of an aversion effect but are heterogeneous in their environmental awareness. On the supply side, two firms offer different environmental qualities and compete on price. We consider two types of environmental campaigns: one that increases the number of informed consumers and one that increases the environmental awareness of informed consumers. We show that these campaigns crucially determine three market configurations: segmented; fragmented, with a brown product that appeals to both uninformed consumers and a fraction of informed consumers; and covered. Assuming that the greenest consumer behavior is abstention, we find that both campaigns do not always lead to better environmental quality; that is, a situation in which all consumers are informed and some highly environmentally aware is not necessarily the greenest situation. Depending on the aversion effect, the budget of the campaign organizer, and their relative cost-effectiveness, information and awareness-raising campaigns must be carefully combined to achieve the best possible environmental quality.

Environmental nongovernmental organizations (NGOs) are increasingly using strategies to encourage firms to eliminate product components (e.g., palm oil) that are harmful to the environment (e.g., rainforests) or to replace them with NGO‐certified sustainable components. Under what conditions do NGOs' information and ecolabeling strategies succeed in eliminating certain harmful components when these components contribute to the intrinsic quality of a product? The paper addresses these questions using a model of two‐dimensional vertical product differentiation in a market with consumers either informed or uninformed about the environmental quality of products and two firms that initially offer a product with the harmful component and a harmful component‐free product. We show that the information campaign plays a crucial and effective role in improving environmental quality, although the optimal share of informed consumers for the NGO is large but not always 100%. Ecolabeling cannot replace the information campaign. It is only a complementary tool to an intensive information campaign. Used together, they can succeed in triggering the substitution of the certified sustainable component for the harmful one.

We explore differences in firms’ attitudes towards corporate social responsibility (CSR). Using a unique dataset covering 8,857 French firms, collected by the National Institute of Statistics and Economic Studies (INSEE), we identify firms conducting conscious CSR and others with effective but unaware CSR activities. We then construct three CSR pillar scores for each firm, using Mokken scale analysis, a form of non-parametric item response analysis. The CSR scores, along with responses to specific questions, allow us to characterize firms that implement conscious or unaware CSR. We then estimate simple probit and count data models to show that a significant share of firms are in fact actually engaged in unaware CSR, with no monotonic size effect. Cooperation with external actors such as NGOs mitigates the effect of firm size on the likelihood of conducting unaware CSR, while the effect of NGO campaigns against large firms is mainly to increase the environmental score of small firms in the same industry.

L'urgence climatique n’est plus à démontrer : il est aujourd’hui nécessaire de modifier, pour les décarboner, toutes nos activités pro­ductives, nos métiers, et de réduire l’impact global de nos économies sur l’environnement. Cette transition d’ampleur est alternativement présentée comme le moyen de parvenir à une croissance verte créa­trice de richesses, ou comme un processus porteur d’une inévitable régression économique. Dépassant cette lecture clivée, Mireille Chiroleu-Assouline brosse un état des connaissances sur les effets de la transition énergétique, et plus largement écologique, en matière d’emploi. Elle montre que ce travail d’identification est un préalable indispensable à la mise en place de politiques macroéconomiques et d’accompagnement pour parvenir à une transition juste, qui ne s’accomplit pas aux dépens des personnes travaillant aujourd’hui dans les secteurs les plus polluants.

We explore differences in firms' attitudes toward corporate social responsibility (CSR). Using a unique dataset covering 8,857 French firms, collected by the National Institute of Statistics and Economic Studies (INSEE), we identify firms conducting conscious CSR and others with effective but unaware CSR activities. We then construct three CSR pillar scores for each firm, using Mokken scale analysis, a form of non-parametric item response analysis. The CSR scores, along with responses to specific questions, allow us to characterize firms that implement conscious or unaware CSR. We then estimate simple probit and count data models to show that a significant share of firms are in fact significantly engaged in unaware CSR, with no monotonic size effect. Cooperation with external actors such as NGOs mitigates the effect of firm size on the likelihood of conducting unaware CSR, while the effect of NGO campaigns against large firms is mainly to increase the environmental score of small firms in the same industry.

This article studies the problem faced by activists who want to maximize firms’ compliance with high environmental standards. Our focus is on radical activism which relies on non-violent civil disobedience. The threat of disruptive actions is used to force firms to concede, i.e., to engage in self-regulation. We adopt a mechanism design approach to characterize an optimal campaign. The analysis indicates that the least vulnerable and most polluting firms should be targeted with disruptive actions while the others are granted a guarantee not to be targeted in exchange for concessions. This characterization allows us to study the determinants of the activist’s strength and how it is affected by repression, a central feature in civil disobedience. We find that an optimal campaign is relatively resilient to repression and that it creates incentives to free ride in the prosecution for individual firms. Next, we consider heterogeneity in firms’ abatement costs and find that an optimal campaign optimizes the allocation of abatement efforts and creates incentives for innovation. We discuss some other welfare properties of the optimal campaign.

This article examines the relationship between environmental policy and budgetary and fiscal policy. An undeniable obstacle to the implementation of environmental policies is their financing. First, the effectiveness of standard environmental instruments is assessed according to public economics criteria, notably distortions, externalities, welfare and macroeconomic aggregates. Limitations regarding acceptability and inequalities are also considered. Compared to quotas and standards, taxation offers significant advantages in incentivising more virtuous behaviour, but also in raising revenue for the State. If the objective of the tax is limited to pollution control, the recycling of revenues is a powerful tool for the correction of its undesirable effects. However, in the case of excessive debt, the revenue from the tax can also be used for the repayment of public debt. The interaction between environmental taxes and public debt is then examined. Repaying the debt using the revenue from the environmental tax restores budgetary room for manoeuvre. Symmetrically, if the debt level is acceptable, financing pollution policies through debt without increasing the tax burden is an interesting option. Debt should, however, be used sparingly and only in cases where the technology used to reduce pollution is highly effective. Finally, the environmental vulnerability of transition and climate-change related countries leads to a risk premium on their sovereign debt, thus increasing the cost of public debt and making the poorest countries even more vulnerable. By reconciling budgetary and environmental objectives, debt relief for developing countries could be an aid to these countries in their fight against pollution.

We study the problem faced by activists who want to maximize firms'compliance with high environmental standards. Our focus is on radical activism which relies on non-violent civil disobedience. The threat of disruptive actions is used to force firms to concede i.e., to engage in self-regulation. We adopt a mechanism design approach to characterize an optimal campaign. The analysis informs that the least vulnerable and most polluting firms should be targeted with disruptive actions while the others are granted a guarantee not to be targeted in exchange for a concession. This characterization allows studying the determinants of the activist's strength and how it is affected by repression, a central feature in civil disobedience. We find that an optimal campaign is relatively resilient to repression and that it creates incentives to free ride in prosecution for individual firms. Next, we consider heterogeneity in firms'abatement cost to find that an optimal campaign optimizes the allocation of abatment efforts and creates incentives for innovation. We discuss some other welfare properties of optimal campaign.

Reprendre en France la trajectoire de la taxe carbone suppose de surmonter les nombreux obstacles à son acceptation par la population. Cet article recense d’abord les arguments propres à convaincre le public de l’efficacité de la tarification du carbone pour réduire les émissions. Puis, sur la base de la littérature et à la lumière d’expériences internationales, il expose des propositions de mesures d’accompagnement propres à combattre les effets potentiellement défavorables sur l’emploi, à traiter les questions d’équité, à répondre au besoin de justice sociale, et à permettre de restaurer la confiance politique indispensable à l’acceptation de politiques climatiques efficaces.

The COVID-19 pandemic, its impact on the global economy, and current delays in the negotiation of the post-2020 global biodiversity agenda of the Convention on Biological Diversity heighten the urgency to build back better for biodiversity, sustainability, and well-being. In 2019 the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) concluded that addressing biodiversity loss requires a transformative change of the global economic system. Drawing on the IPBES findings, this policy perspective discusses actions in four priority areas to inform the post-2020 agenda: (1) Increasing funding for conservation; (2) redirecting incentives for sustainability; (3) creating an enabling regulatory environment; and (4) reforming metrics to assess biodiversity impacts and progress toward sustainable and just goals. As the COVID-19 pandemic has made clear, and the negotiations for the post-2020 agenda have emphasized, governments are indispensable in guiding economic systems and must take an active role in transformations, along with businesses and civil society. These key actors must work together to implement actions that combine short-term impacts with structural change to shift economic systems away from a fixation with growth toward human and ecological well-being. The four priority areas discussed here provide opportunities for the post-2020 agenda to do so.

Introduction to IIPF 2020 special issue in ITAX: reflections on the interactions between environmental economics and public finance

The literature on special interest groups emphasizes two main influence channels: campaign contributions and informational lobbying. We introduce a third channel: providing information about the credibility of political rivals. In particular, nongovernmental organizations (NGOs) often aim to communicate scientific knowledge to policymakers, but industry‐backed groups often attempt to undermine their credibility. We extend a standard signaling model of interest‐group lobbying to include fixed costs of policymaker action and show that these costs make possible two mechanisms for creating doubt about the value of policy action. The first uses Bayesian persuasion to suggest the NGO may be a noncredible radical. The second involves creating an opposition think tank (TT) that acts as a possible radical, not a credible moderate. We show that the TT cannot always implement the Bayesian persuasion benchmark, and we characterize how optimal TT design varies with exogenous parameters.