We develop a vertical differentiation model to analyze welfare implications of environmental policies in a competitive market with production and consumption heterogeneity. Consumers with heterogeneous preferences choose between non-green and certified green products, while producers with...

The Clean Air Act's National Ambient Air Quality Standards (NAAQS) and New Source Review (NSR) permitting work in conjunction to improve ambient air quality in the United States. However, all previous studies of the NAAQS ignore this joint nature and focus solely on the effects of NAAQS...