Environmentalism and Antitrust

In recent years, there has been a proliferation of interest concerning environmental issues and the application of the antitrust laws. Numerous commentators, for instance, have argued that antitrust enforcement should be adjusted to account for the environmental harm (or benefit) that is generated from a competitive condition. In this paper, we take a step back and argue that analysis of the intersection between antitrust and environmentalism should begin with more mundane questions of economics. More specifically, we argue that environmental regulations can inform antitrust analysis by considering (at least) three issues: (1) the impact of environmental regulation on firms’ production cost; (2) how consumers’ preferences are affected by environmental regulation; and (3) those environmental considerations that do not readily manifest through either cost or demand structures. We use the electric vehicle market as an example to illustrate how these different factors can impact the antitrust calculus.