Distribution of Environmental Costs and Benefits, Additional Distortions, and the Porter Hypothesis
The Porter Hypothesis argues that environmental regulations benefit firms by fostering innovation. We discuss four examples consistent with this idea, highlighting either the distribution of benefits or costs, or the presence of some additional distortion, other than pollution. Examples are organized according to the list of market failures. Adding any one market failure creates the possibility that firms benefit from regulations. While each example can be fully consistent with the Porter Hypothesis, it is also possible that regulations benefit firms even without fostering innovation, a result that would be empirically difficult to distinguish from the Porter Hypothesis.
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- Don Fullerton, 2001.
"A Framework to Compare Environmental Policies,"
Southern Economic Journal,
Southern Economic Association, vol. 68(2), pages 224-248, October.
- Don Fullerton, 2001. "A Framework to Compare Environmental Policies," NBER Working Papers 8420, National Bureau of Economic Research, Inc.
- Baumol,William J. & Oates,Wallace E., 1988. "The Theory of Environmental Policy," Cambridge Books, Cambridge University Press, number 9780521322249, September.
- Baumol,William J. & Oates,Wallace E., 1988. "The Theory of Environmental Policy," Cambridge Books, Cambridge University Press, number 9780521311120, August.
- Hart, Rob, 2004. "Growth, environment and innovation--a model with production vintages and environmentally oriented research," Journal of Environmental Economics and Management, Elsevier, vol. 48(3), pages 1078-1098, November. Full references (including those not matched with items on IDEAS)