Environmental policy when consumers value conformity

We present a model of consumer behaviour when consumers value conformity and examine the implications for environmental policy. The shares feature set out in Dasgupta et al. (2016) having structure preferences which induces mass to adhere exactly norm level consumption (clumping). However we extend our previous analysis by analysing conditions existence potential uniqueness norms. In doing so introduce threshold effects whereby individuals only if sufficiently many others do so. Taken together these have striking policy case where good generates pollution emissions. Clumping means will not change unless changes while plus clumping that it may be hard norm. show use Pigovian taxes control either ineffective or welfare reducing, optimal tax work is above some level. There are parameter values quantity-based injunctive policies raise relative no intervention would lower welfare.