Do environmental policies help competitiveness? We don’t really know.

“We can’t introduce additional environmental policies. Won’t they negatively impact our economic growth?”

This is a common concern for many policymakers around the world. Available evidence is not yet conclusive, indicating both gains for competitiveness in some cases and competitiveness decline in others.  Perhaps more importantly, the empirical analysis on this topic as a whole is surprisingly sparse, particularly for developing countries.

The GGKP’s Trade and Competitiveness Research Committee recently investigated this knowledge gap and found that the absence of information on environmental policies results in two primary reasons – among nine identified – why researchers have not come to a consensus on the impacts these policies have on competitiveness. Particularly in non-OECD countries, there is a paucity of data on what environmental policies are on the books, which are in effect, and the extent to which they are enforced.

How do we get conclusive evidence on the economic impacts of environmental policies?

First, we need more data. Researchers need to be able to determine not only which policies are in place in a specific country, but also to understand the policy details. Does the policy include a financial incentive or disincentive? To which sectors does it apply? The devil is certainly in the details and, right now, it is very difficult for researchers to find this information, particularly for non-OECD countries.

Through interviews and in discussions at a recent GGKP workshop, experts identified priority data needs that, if addressed, would allow them to do broader research of policy impacts. Their primary data requests are:

• Comprehensive data on policies in developing countries
• Comprehensive coverage of all environmental policies, particularly in sectors beyond energy, agriculture and climate change
• Freely accessible data available through bulk download and updated annually

There are many excellent online resources that provide information on environmental policies, often targeting a specific sector or a specific region. In support of the GGKP efforts, I conducted a review of existing environmental policy databases, assessing the breadth of content provided. Each of the 24 databases reviewed (listed in the table below) provides data based on their unique objectives. However, the needs identified by the experts are extremely broad – none of these databases provides comprehensive information on policies for all countries, all sectors, and all policy types with sufficient detail to assess competitiveness concerns. 

Building Energy Efficiency Policies Database
(International Energy Agency)

Global Fisheries Economics - Fisheries Subsidies Database
(Sea Around Us – The University of British Columbia)

Climate Change Laws of the World1

(Columbia Law School)

Global Renewable Energy IEA/IRENA Joint Policies and Measures Database
(International Energy Agency and International Renewable Energy Agency)

Database on Instruments used for Environmental Policy
(Organisation for Economic Cooperation and Development)

International Environmental Agreements Database
(University of Oregon)

ECOLEX
(International Union for Conservation of Nature, Food and Agriculture Organization, and United Nations Environment Programme)

Inventory of Support Measures for Fossil Fuels
(Organisation for Economic Cooperation and Development)

Emissions Trading Systems Map
(International Carbon Action Partnership)

Market Access Map
(International Trade Centre)

Environmental Database
(World Trade Organization)

New Climate Policy Database
(NewClimate Institute)

Environmental Policy Stringency Index
(Organisation for Economic Cooperation and Development)

Policies and Measures Database: Addressing Climate Change
(International Energy Agency)

Environmental Treaties and Resource Indicators
​(Socioeconomic Data and Applications Center - Columbia)

Policies and Measures Database: Energy Efficiency
(International Energy Agency)

FAOLEX
(Food and Agriculture Organization)

Producer and Consumer Support Estimates Database
(Organisation for Economic Cooperation and Development)

Forest Policy and Innovation Database
(EU Forest Institute)

Renewable Energy Target Data Dashboard
(International Renewable Energy Agency)

Forestry Policy and Institutions
(Food and Agriculture Organization)

RES LEGAL
(European Commission)

The Global Climate Legislation Database1

(Grantham Research Institute on Climate Change – London School of Economics)

Standards Map
(International Trade Centre)

So, how do we fill the gaps in data?

Given the many excellent resources, it is likely unnecessary to build yet another database. A better option, perhaps, would be to partner with an existing organisation to expand its database to meet the researchers’ needs for data on environmental policies. Another option is for databases offering specialised data to find new ways to bring their data together into a single place that offers more comprehensive country and policy coverage. The GGKP Secretariat has begun discussions with several organisations to identify opportunities for providing more comprehensive environmental policy data that is freely available online.

Collecting policy data for all countries and keeping it updated is a difficult task. It will require coordination among multiple experts and in-country policymakers. And providing the data is just a first step – the baton will then be passed to the researchers to analyse the competitiveness impacts of these policies and to distill their research such that policymakers can assess what the economic impacts might really be for introducing a new environmental policy. This will give policymakers the information they need to determine the most appropriate policies to encourage green growth in the best way for their country. 

For more information, click here to find the GGKP working paper 'Analysis of Existing Environmental Policy Databases', written by the author of the blog, Sarah Booth.