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Industrial Competitiveness and Diffusion of New Pollution Abatement Technology - a new look at the Porter-hypothesis

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Abstract

We study the relationship between industrial competitiveness, adaption of cleaner production techniques and environmental policy. While other contributions have analyzed environmental innovations with point of departure in the polluting firm, we introduce an up-stream market for new pollution abatement technology. A strong environmental policy may then benefit industrial competitiveness through its effect on the price on pollution abatement. However, the incentive for a stringent policy partly disappears if there is a global market for pollution abatement solutions, and environmental policy is set simultaneously in several countries. In our analysis we hope to draw attention to an often overlooked issue. The diffusion of new pollution abatement techniques often requires a new market to develop. If policy is lax, few firms enter and may charge a high mark-up to cower entry costs. On the other hand, a stringent environmental policy induces higher demand and allows a lower mark-up. Consequently, even if the polluting industry in question is export oriented, a stringent policy may be welfare enhancing

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  • Mads Greaker, 2004. "Industrial Competitiveness and Diffusion of New Pollution Abatement Technology - a new look at the Porter-hypothesis," Discussion Papers 371, Statistics Norway, Research Department.
    • Handle: RePEc:ssb:dispap:371
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    Cited by:

    1. R. Seymore & J. H. van Heerden & M. Mabugu, 2013. "The Impact of a Multilateral Electricity Generation Tax on Competitiveness in Southern Africa: A Computable General Equilibrium Analysis Using the Global Trade Analysis Project," Energy & Environment, , vol. 24(6), pages 917-938, October.
    2. Maia David & Alain-Désiré Nimubona & Bernard Sinclair-Desgagné, 2007. "Environmental Taxation and the Structure of the Eco-industry," Working Papers 2007/02, INRA, Economie Publique.
    3. Zulfadhli, 2018. "Determination of Industrial Competitiveness on Manufacturing Industry Growth in Palembang City," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 8(3), pages 238-254, July.
    4. Maia David & Bernard Sinclair-Desgagné, 2006. "Revisiting the Environmental Subsidy in the Presence of an Eco-Industry," Working Papers 2006/04, INRA, Economie Publique.
    5. Lan, Jing & Munro, Alistair & Liu, Zhen, 2017. "Environmental regulatory stringency and the market for abatement goods and services in China," Resource and Energy Economics, Elsevier, vol. 50(C), pages 105-123.
    6. Reyno Seymore & Margaret Mabugu & Jan van Heerden, 2009. "The Competitiveness Impact Of A Multilateral Electricity Generation Tax," Working Papers 200919, University of Pretoria, Department of Economics.

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    More about this item

    Keywords

    Strategic Environmental Policy; Eco-dumping; Porterhypothesis;
    All these keywords.

    JEL classification:

    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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