Environmental Labelling: Issues of Enforcement and Approval of Uniform Standards
| RIVISTA INTERNAZIONALE DI SCIENZE SOCIALI - 2010 - 3
This paper has two parts. In the first, theoretical, section it explores issues concerning the enforcement
of a mandatory environmental scheme in which firms make decisions about compliance by
considering both the expected fines in the case of cheating, and the costs of compliance. Two alternative
scenarios are considered: mutual exclusiveness vs. coexistence of public and private standards.
The second part investigates the possibility of setting up a common environmental standard across
countries. Two main variables influence the advantage of any country in adopting a common standard:
the nature of environmental damage (local vs. trans-frontier) and the relative efficiency of domestic
firms. Analysis has revealed on the one hand how the advantage of complying with the standard
may differ widely across countries, and on the other which factors must be taken into consideration
when setting up a single standard.
Key words: Environmental labelling, regulatory governance, enforcement, compliance, common
JEL Classification: D21 F53 K42 Q28.