Competition and the Green Deal: a Study of Consumers' WTP for CO₂ Emissions Reduction in the Italian Car Market.

This study investigates Italian consumers' willingness-to-pay (WTP) for reduced CO2 emissions in the passenger car market between 2019 and 2020, aiming to inform the role of competition policy in achieving sustainability goals under the EU Green Deal. Using a revealed preference approach with data on new car registrations merged with price information, the analysis employs Berry logit and nested logit discrete choice models, addressing endogeneity via instrumental variables. Results indicate a significant WTP for lower emissions, estimated at approximately 41.37 to 71.76 euros per gram of CO2 reduced per kilometer, implying that stricter competition enforcement can simultaneously enhance consumer welfare and environmental sustainability in this market. The study acknowledges limitations including the influence of Italy's Ecobonus incentive and the specificity of the car market, suggesting that findings may not generalize to other sectors where sustainability attributes are less visible or valued by consumers.