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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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“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
In the citing paper
“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
In the citing paper
“On the other hand, they can stimulate innovation (Ambec et al., 2013; Porter, 1991; Porter and van der Linde, 1995).”
From Win Together or Lose Alone: Circular Economy and Hybrid Governance for Natural Resource Commons (2024) · cites this paper as Porter and van der Linde, 1995
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Metadata
- Authors
- Porter, M. E., & Linde, C. V. D.
- Affiliations
- Harvard University (US)
- Faculty of the International Management Research Institute of St. Gallen University, St. Gallen, Switzerland.
- 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 › Public Administration › Regulation and Compliance Studies
- Keywords
- environmental regulation, competitiveness, environmental compliance costs, resource productivity, pollution prevention, environmental standards
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