Borsenberger, Claire, Cremer, Helmuth, Joram, Denis, Lozachmeur, Jean-Marie and Malavolti-Grimal, Estelle (2021) E-commerce, parcel delivery and environmental policy. TSE Working Paper, n. 21-1230, Toulouse

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Abstract

We study the design of environmental policy in the e-commerce sector and examine two
main questions. First, what is the appropriate level of intervention along the value
chain. Second, which instruments should be used at a specic level in the vertical chain?
We consider a model with two retailers/producers who sell a di¤erentiated product and
two parcel delivery operators. The production, retailing and delivery of these goods
generates CO2 emissions. We assume that it is more expensive for the retailers and the
delivery operators to use greentechnologies. We consider di¤erent scenarios reecting
the type of competition and the vertical structure of the industry.
In all cases the equilibria are ine¢ cient for two reasons. First, at both level of
the value chain (at the production/retailing stage and the delivery stage), the levels of
emissions are too large (given the output levels - the number of items produced and
delivered). Second the levels of outputs are not e¢ cient because the cost of emissions is
not reected by the consumer prices. We show that in the perfect competition scenario a
uniform Pigouvian tax on emission, reecting the marginal social damage, is su¢ cient to
correct both types of ine¢ ciencies. Under imperfect competition a Pigouvian emissions
tax is also necessary, but it has to be supplemented by positive or negative taxes on
the quantity of good produced and delivered. The specic design of these instruments
is a¤ected by vertical integration between a retailer and a delivery operator.