Toward a New Conception of the Environment-Competitiveness Relationship
Open accessAbstract
Accepting a fixed trade-off between environmental regulation and competitiveness unnecessarily raises costs and slows down environmental progress. Studies finding high environmental compliance costs have traditionally focused on static cost impacts, ignoring any offsetting productivity benefits from innovation. They typically overestimated compliance costs, neglected innovation offsets, and disregarded the affected industry's initial competitiveness. Rather than simply adding to cost, properly crafted environmental standards can trigger innovation offsets, allowing companies to improve their resource productivity. Shifting the debate from pollution control to pollution prevention was a step forward. It is now necessary to make the next step and focus on resource productivity.
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Properly designed environmental standards can trigger innovation that may partially or more than fully offset the costs of complying with them.
“According to the seminal Porter Hypothesis, ‘properly designed environmental standards can trigger innovation that may partially or more than fully offset the costs of complying with them’ (Porter & Van der Linde, Citation1995, p. 98; also see Porter, Citation1991).”
From Why does emissions trading under the EU Emissions Trading System (ETS) not affect firms' competitiveness? Empirical findings from the literature (2019) · cites this paper as Porter & Van der Linde, 1995
Green policies need to be well-crafted and stringent enough to induce innovative investments.
“Still, Porter and Van der Linde (Citation1995) emphasize that green policies need to be ‘well-crafted’ and stringent enough to induce innovative investments.”
From Why does emissions trading under the EU Emissions Trading System (ETS) not affect firms' competitiveness? Empirical findings from the literature (2019) · cites this paper as Porter & Van der Linde, 1995
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- Authors
- Porter, M. E., & Linde, C. V. D.
- Affiliations
- Harvard University (US)
- University of St.Gallen (CH)
- ORCID
- Porter, Michael E
- Venue
- Journal of Economic Perspectives
- Publisher
- American Economic Association
- Published
- 1995-11-01
- Volume
- 9
- Issue
- 4
- Pages
- 97-118
- ISSN
- 0895-3309 (ISSN-L)
- OpenAlex
- W2090841340
- Cited by
- 13,365
- References
- 21
- Citations by year
- 2026: 1830 · 2025: 1638 · 2024: 1361 · 2023: 1183 · 2022: 1080 · 2021: 815 · 2020: 587 · 2019: 509 · 2018: 448 · 2017: 361 · 2016: 335 · 2015: 366 · 2014: 346 · 2013: 325 · 2012: 313
- FWCI
- 125.46
- Type
- journal article
- Language
- en
- Open access
- bronze
- doi.org
- Locations
- The Journal of Economic Perspectives (publishedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- Topics
- Social Sciences › Business, Management and Accounting › Marketing › Environmental Sustainability in Business
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Energy, Environment, Economic Growth
- Social Sciences › Business, Management and Accounting › Strategy and Management › Regulation and Compliance Studies
- Keywords
- environmental regulation, competitiveness, environmental compliance costs, resource productivity, pollution prevention, environmental standards
About these checks
Registry, retraction, Cites and statistics results are computed, not judged, with one exception: a printed reference that no index lists is read once by a model before it counts as a citation error. Claims are extracted by a model and kept only when their quote appears verbatim in the text; each cited source is then checked, with a model’s help, for whether it says what the claim relies on. Those verdicts can be wrong — read the claim’s quote and the cited source before relying on one.
Statistics and arithmetic are recomputed, not judged.
Confidence bands are shown only for fields calibrated on our annotated test set. None is calibrated yet, so no band is shown.
What counts as a claim ›How we measure confidence ›How we check this ›
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