The Impacts of Environmental Regulations on Competitiveness

By Antoine Dechezleprêtre, Misato Sato. Review of Environmental Economics and Policy, 2017

872 citations recorded by the source corpus.

This article reviews the empirical literature on the impacts of environmental regulations on firms’ competitiveness as measured by trade, industry location, employment, productivity, and innovation. The evidence shows that environmental regulations can lead to statistically significant adverse effects on trade, employment, plant location, and productivity in the short run, in particular in a well-identified subset of pollution- and energy-intensive sectors, but that these impacts are small relative to general trends in production. At the same time, there is evidence that environmental regulations induce innovation in clean technologies, but the resulting benefits do not appear to be large enough to outweigh the costs of regulations for the regulated entities. As measures to address competitiveness impacts are increasingly incorporated into the design of environmental regulations, future research will be needed to assess the validity and effectiveness of such measures and to ensure they are compatible with the environmental objectives of the policies.

Subfields: Economics and Econometrics, Marketing

View Paper: https://www.semanticscholar.org/paper/1e63232d8583d9222767fd601872451e2950ea88

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Citations in the corpus

Why does emissions trading under the EU Emissions Trading System (ETS) not affect firms’ competitiveness? Empirical findings from the literature (2018, background): “…ex post literature on firm-level effects of the EU ETS shows hardly any significant negative impacts on the competitiveness of regulated firms during Phase I and II (for overviews see Arlinghaus, 2015; Martin et al., 2016; Venmans, 2012; also Dechezleprêtre & Sato, 2017; Jaraite & Di Maria, 2016).”
Connecting the sustainable development goals by their energy inter-linkages (2018, neutral): “…(2016); Babiker and Eckaus (2007); Bertram et al. (2015); Blyth et al. (2014); Borenstein (2012); Creutzig et al. (2013); Clarke et al. (2014); Dechezleprêtre and Sato (2014); Dinkelman (2011); Fankhauser et al. (2008); Ferroukhi et al. (2016); Frondel et al. (2010); Gohin (2008); Guivarch et…”
Job losses and political acceptability of climate policies: why the ‘job-killing’ argument is so persistent and how to overturn it (2018, background): “…the extent to which extreme distributional effects, either in terms of long-term unemployed or permanent earnings losses, may undermine the political acceptability of climate policies, even in the presence of negligible aggregate employment and competitiveness effects (Dechezleprêtre & Sato, 2017).”
Environmental regulation and innovation in renewable energy technologies: Does the policy instrument matter? (2020, background): “According to the conventional view on environmental policy, a stricter regulation harms the competitiveness by increasing the costs of production (Dechezleprêtre and Sato 2017).”
Sustainable finance in Japan (2020, background): “…significant consequences in the near future on both the regulatory and business sides with the current rise of stringent climate policies and litigation (Dechezleprêtre and Sato 2017; PRI 2020) and the growing influence of responsible investing practices (Climate Policy Initiative 2018; UNEP 2019).”
Economic growth and development with low‐carbon energy (2017, background): “Carbon pricing has proven an effective tool to incentivize emission reductions with very limited effects, so far, on competitiveness (Dechezleprêtre and Sato 2014).”
Stringency of environmental regulation and aquaculture growth: A cross-country analysis (2016, background): “…regulation, a number of studies have been carried out to investigate the impact of environmental regulation on different aspects, such as economic growth (Grossman & Krueger, 1995); development (Dasgupta et al., 2001); and competitiveness (Greenstone et al., 2012; Dechezleprêtre and Sato, 2014).”