Greenwashing: A Hidden Cost to Markets and Trust
- Post by: Randy Muñoz
- November 6, 2025
- Comments off
A new paper co-authored by Saeid Vaghefi (EClim member) and led by Markus Leippold presents a groundbreaking framework to quantify the economic costs of greenwashing. Going beyond environmental impacts, the study shows how corporate misinformation degrades trust, distorts market efficiency, and causes long-lasting economic harm.
🔍 Key findings:
- Greenwashing creates a self-reinforcing trap by degrading information quality.
- Trust loss is hard to reverse — restoring it costs more than preventing erosion.
- Unchecked competition in information markets may worsen welfare when influence strategies escalate.
👉 The study suggests that protecting information integrity — via disclosure standards and verification — should be a top priority for policymakers, alongside traditional tools like carbon pricing.
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