The impacts of environmental regulations on competitiveness

This policy brief looks at the impacts of environmental regulations on regulated companies.  It presents an overview of what competitiveness means, at the level of firms, sectors and countries; and explains how competitiveness effects occur, why it is important to assess them and how they are measured. The main focus of the policy brief is a review of the exisiting evidence. The authors focus on ex post evaluation studies. Ex ante modelling studies are not included. They discuss the impact of environmental regulations on productivity, employment, trade, industry location and innovation. And they conclude by discussing what the literature teaches about improving environmental regulations and identifying priorities for future research.

Key findings from the policy brief include:

• Environmental regulations make a small difference to productivity and employment.
• Environmental regulations only marginally affect international competitiveness.
• The benefits of environmental regulations often vastly outweigh the costs.
• Environmental regulations induce innovation in green technologies.
• Switching to green technologies can have economy-wide benefits.