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Do Environmental Policies Matter for Productivity Growth?: Insights from New Cross-Country Measures of Environmental Policies

Author

Listed:
  • Silvia Albrizio

    (OECD)

  • Enrico Botta

    (OECD)

  • Tomasz Koźluk

    (OECD)

  • Vera Zipperer

    (OECD)

Abstract

Environmental policies address wellbeing and sustainability objectives, affecting firm and household behaviour. A newly developed, cross-country composite proxy of environmental policy stringency (EPS) shows that stringency has been increasing across OECD countries over the past two decades. However, the tightening environmental policies have had little effect on aggregate productivity, spurring primarily short-term adjustments. Nevertheless, they have led to various effects within the economy - the most technologically advanced industries and firms have seen a small increase in productivity, possibly being in the best position to adapt. Least productive firms have seen their productivity fall. Part of the effect is likely to have taken place through entry and exit of firms and relocation of activities. Finally, this project provides evidence on the anti-competitive bias of some aspects of environmental policies. The indicator of Burdens on the Economy due to Environmental Policies (BEEP) shows that barriers to entry and competition, and the consideration given to economic effects of environmental policies vary notably across countries, but that this variation is not related to the stringency of policies. Hence, to support both economic and environmental outcomes, stringent environmental policies can and should be implemented with minimum barriers to entry and competition. Les politiques environnementales influent-elles sur la croissance de la productivité ? : Enseignements tirés de nouvelles mesures des politiques environnementales nationales Les politiques environnementales sont axées sur des objectifs de bien-être et de durabilité, et influent sur le comportement des entreprises et des ménages. Un indice composite de rigueur des politiques environnementales, de couverture internationale, élaboré récemment montre que la rigueur de ces politiques s'est accentuée dans les pays de l'OCDE au cours des deux dernières décennies. Ce durcissement des politiques environnementales a cependant eu peu d'effets sur la productivité globale, entraînant essentiellement des ajustements à court terme. Néanmoins, cela a eu diverses répercussions dans les économies : les secteurs et les entreprises les plus avancés sur le plan technologique ont vu leur productivité progresser légèrement, peut-être parce qu'ils étaient les mieux placés pour s'adapter. À l'inverse, les entreprise dont la productivité était la plus faible ont vu celle-ci diminuer. Ces effets sont sans doute en partie liés à des entrées et sorties d'entreprises ainsi qu'à des transferts d'activités. Enfin, le projet fournit des éléments d'information sur les aspects anticoncurrentiels de la conception des politiques environnementales. L'indicateur de la charge imposée à l'économie par les politiques environnementales montre que ces obstacles varient sensiblement d'un pays à l'autre, mais que cette variation n'est pas liée à la rigueur des politiques. Par conséquent, pour favoriser la réalisation des objectifs visés tant sur le plan économique qu'écologique, il est possible et souhaitable d'appliquer des politiques environnementales rigoureuses tout en réduisant au minimum les obstacles à l'entrée préjudiciables à la concurrence qui en découlent.

Suggested Citation

  • Silvia Albrizio & Enrico Botta & Tomasz Koźluk & Vera Zipperer, 2014. "Do Environmental Policies Matter for Productivity Growth?: Insights from New Cross-Country Measures of Environmental Policies," OECD Economics Department Working Papers 1176, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:1176-en
    DOI: 10.1787/5jxrjncjrcxp-en
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    Citations

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    Cited by:

    1. Sun, Lingyun & Hasi, Muqier, 2024. "Effects of mining sector FDI, environmental regulations, and economic complexity, on mineral resource dependency in selected OECD countries," Resources Policy, Elsevier, vol. 89(C).
    2. MALEN, Joel & YAMANOI, Junichi, 2016. "Environmental regulation and international expansion of MNEs : The moderating role of pollution reduction resources and firm multinationality on location choice," IIR Working Paper 16-13, Institute of Innovation Research, Hitotsubashi University.
    3. Martínez-Zarzoso, Inmaculada & Bengochea-Morancho, Aurelia & Morales-Lage, Rafael, 2019. "Does environmental policy stringency foster innovation and productivity in OECD countries?," Energy Policy, Elsevier, vol. 134(C).
    4. Kim, Incheol & Pantzalis, Christos & Zhang, Zhengyi, 2021. "Multinationality and the value of green innovation," Journal of Corporate Finance, Elsevier, vol. 69(C).
    5. Cecere, Grazia & Mazzanti, Massimiliano, 2017. "Green jobs and eco-innovations in European SMEs," Resource and Energy Economics, Elsevier, vol. 49(C), pages 86-98.
    6. Enrico Maria de Angelis & Marina Di Giacomo & Davide Vannoni, 2019. "Climate Change and Economic Growth: The Role of Environmental Policy Stringency," Sustainability, MDPI, vol. 11(8), pages 1-15, April.
    7. Piotr Zientara, 2017. "Socioemotional Wealth and Corporate Social Responsibility: A Critical Analysis," Journal of Business Ethics, Springer, vol. 144(1), pages 185-199, August.
    8. Cosma Ioana Gabriela & David Katalin Gabriela & Antonescu Daniela & Dumiter Florin Cornel & Jimon Ștefania Amalia, 2020. "The Correlation Between CO2 Emissions and GDP in a Sustainable Development Framework Using Kuznets Environment Curve," Studia Universitatis „Vasile Goldis” Arad – Economics Series, Sciendo, vol. 30(4), pages 1-23, December.

    More about this item

    Keywords

    anti-competitive regulation; barriers to entry; environmental policies; environmental regulations; multifactor productivity; obstacles à l'entrée; politiques environnementales; productivité multifactorielle; réglementation anticoncurrentielle; réglementation environnementale;
    All these keywords.

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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