Do eco-labels enhance international NIMBYism within consumer preferences?

Abstract

Consumption of imported goods whose production affects the natural environment abroad implies international ``insourcing'' of consumer benefits and ``outsourcing'' of environmental impacts. We examine to what extent consumer choices driving such ecological outsourcing in the aggregate, often from the Global North to the Global South, are motivated by environmental NIMBY (not in my backyard) preferences. The analysis relies on an original survey-embedded choice experiment in three large, high-income economies (Germany, Japan, United States, total N=7,494). We find considerable support for environmental NIMBYism in consumer decisions. Whereas consumers generally tend to prefer domestically sourced products, this home bias becomes weaker with increasing environmental impacts of production. One important implication of this finding is that policy makers should address potential unintended side-effects of more stringent eco-labeling requirements. The latter may in fact contribute to further ecological outsourcing by making both information on environmental impacts and product provenance more explicit.