The aim of our research project is to examine the role of consumers in abating polluting emissions. To this end, we first wonder whether a strong environmental concern among heterogeneous consumers can contribute to reduce environmental damage depending also on some characteristics of consumers, namely their income and culture, inter alia. In our approach, this concern stems from social norms stating that green consumption is a byword of good citizenship and as such is heterogeneously spread worldwide.
Then, we consider whether consumers' attitudes can be more effective than a fiscal tool in abating emissions. Accordingly, we describe a scenario where a carbon tax (i) is imposed on brown consumers (i.e. consumers buying brown goods) rather than on firms, and (ii) it increases with the pool of brown consumers and with the quality differential between a green and a brown product. In order to assess the role of consumers, we compare the equilibrium configuration resulting when the tax is imposed on consumers with the equilibrium that would be observed if a carbon tax on global emissions is levied on polluting producers.
Our analysis goes along two dimensions. On a theoretical ground, we try to identify the role of consumers in reducing pollution damage thereby disentangling the properties of different equilibrium configurations. Moreover, we try to test our result on an empirical ground.
