Toward a New Conception of the Environment-Competitiveness Relationship

Toward a New Conception of the Environment-Competitiveness Relationship

Accepting a fixed trade-off between environmental regulation and competitiveness unnecessarily raises costs and slows down environmental progress. Studies finding high environmental compliance costs have traditionally focused on static cost impacts, ignoring any offsetting productivity benefits from...

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Bibliographic Details
Published in:The Journal of economic perspectives Vol. 9; no. 4; pp. 97 - 118
Main Authors: Porter, Michael E., van der Linde, Claas
Format: Journal Article
Language:English
Published: Nashville American Economic Association 01-10-1995
Subjects:
Business innovation
Capital costs
Competition
Competitive advantage
Competitiveness
Compliance costs
Costs
Economic regulation
Energy consumption
Environmental agencies
Environmental policy
Environmental pollution
Environmental protection
Environmental regulation
Environmental regulations
Industrial policy
Industrial regulation
Innovation
Innovations
Productivity
Profits
Regulation
Symposia: Might Environmental Regulation Promote Growth?
Technological innovation
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Summary:Accepting a fixed trade-off between environmental regulation and competitiveness unnecessarily raises costs and slows down environmental progress. Studies finding high environmental compliance costs have traditionally focused on static cost impacts, ignoring any offsetting productivity benefits from innovation. They typically overestimated compliance costs, neglected innovation offsets, and disregarded the affected industry's initial competitiveness. Rather than simply adding to cost, properly crafted environmental standards can trigger innovation offsets, allowing companies to improve their resource productivity. Shifting the debate from pollution control to pollution prevention was a step forward. It is now necessary to make the next step and focus on resource productivity.
Bibliography:ObjectType-Article-2
SourceType-Scholarly Journals-1
ObjectType-Feature-1
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ISSN:0895-3309
1944-7965
DOI:10.1257/jep.9.4.97