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Toward a New Conception of the Environment-Competitiveness Relationship

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  • Porter, Michael E
  • van der Linde, Claas
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    Abstract

    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. Copyright 1995 by American Economic Association.

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    Bibliographic Info

    Article provided by American Economic Association in its journal Journal of Economic Perspectives.

    Volume (Year): 9 (1995)
    Issue (Month): 4 (Fall)
    Pages: 97-118
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    Handle: RePEc:aea:jecper:v:9:y:1995:i:4:p:97-118

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    Cited by:
    1. Stavins, Robert N., 2004. "Environmental Economics," Working paper 276, Regulation2point0.
    2. Li, Hong & Huang, Chengming & Yang, Bill Z., 2011. "Environmental Regulation, Business Innovation and International Competitiveness - Regolazione ambientale, innovazioni d’impresa e competitività internazionale," Economia Internazionale / International Economics, Camera di Commercio di Genova, vol. 64(1), pages 115-128.

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