Competitiveness and environmental protection: a dirty dilemma

Oliver, Geoffrey and Basak, Rishi (2004): Competitiveness and environmental protection: a dirty dilemma. Published in: International Journal of Environment and Sustainable Development , Vol. 1, No. Volume 1, Number 3 (2004): pp. 265-282.

Abstract

Environmental authorities are regularly challenged to defend their regulations and policies in terms of how they impose additional costs on business and affect economic competitiveness. This paper discusses the links between environmental protection (and government policies and regulations more generally) and competitiveness. It provides a brief discussion on the nature of competitiveness, presents a Prisoners’ Dilemma model of firm and government strategies that incorporates competition, and briefly relates the results of these investigations to key empirical results from the literature.

• Item Type: MPRA Paper
• Language: English
• Keywords: environmental protection; competitiveness; competition; Prisoners’ Dilemma; sustainable development; globalisation.
• Subjects: F - International Economics > F1 - Trade; F - International Economics > F1 - Trade > F18 - Trade and Environment; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q54 - Climate ; Natural Disasters and Their Management ; Global Warming; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q56 - Environment and Development ; Environment and Trade ; Sustainability ; Environmental Accounts and Accounting ; Environmental Equity ; Population Growth

References

Oliver, G. and Basak, R. (2001) ‘Competitiveness and environmental protection: sustainable development rules’, Presented at the Canadian Society for Ecological Economics Conference, Montreal, August.

Scherer, F.M. (1980) Industrial Market Structure and Economic Performance, Boston: Houghton Mifflin.

Esty, D.C. (1994) Greening the GATT: Trade, Environment and the Future, Washington: Institute for International Economics.

Carbough, R. and Wassink, D. (1993) ‘Environmental standards and international competitiveness’, World Competition, pp.81–91.

Hodges, H. (1997) ‘Falling prices: cost of complying with environmental regulations almost always less than advertised’, Economic Policy Institute Briefing Paper, Washington, DC.

Low, P. and Yeats, A. (1992) ‘Do ‘dirty’ industries migrate?’, in P. Low (Ed.) World Bank Discussion paper 159: International Trade and the Environment,. Washington, DC.

Morgenstern, R.D., Pizer, W.A. and Shih, J-S. (1998) ‘Are we overstating the economic costs of environmental protection?’, Resources for the Future Working Paper 97-36-REV.

OECD (1997) ‘The effects of government environmental policy on costs and competitiveness – iron and steel sector’, DSTI/SI/SC(97)46.

OECD (1992) ‘Environmental costs and industrial competitiveness’, Prepared by * ECOTEC Research and Consulting Ltd., UK, For the Directorate for Science, Technology and Industry. [this is not a survey. It is a report produced by a consulting firm for the OECD]

Meyer, S.M. (1992) ‘Environmentalism and economic prosperity: testing the environmental impact hypothesis’, Massachusetts Institute of Technology Working Paper.

World Economic Forum (2000) ‘Measuring national environmental performance and its determinants’, in D.C. Esty and M. Porter (Eds.) World Economic Forum.

Berman, E. and Bui, L. (1998) ‘Environmental regulation and productivity: evidence from oil refineries’, NBER Working Paper No. 6776, November.

Hart, S. and Ahujba, G. (1994) ‘Does it pay to be green? An empirical examination of the G. Oliver and R. Basak relationship between pollution prevention and firm performance’, Unpublished Paper, University of Michigan, School of Business Administration, Corporate Environmental Management Program.

Jaffe, A.B., Peterson, S.R., Portney, P.R. and R. Stavins (1995) ‘Environmental regulation and the competitiveness of U.S. Manufacturing: what does the evidence tell us?’, Journal of Economic Literature, Vol. 33, pp.132–163.

Xu, X. (2000) ‘International trade and environmental regulation: time series evidence and cross section test’, Environmental and Resource Economics, Vol. 17, pp.233–257.

Conference Board of Canada (2001) Framework for Assessing the Competitiveness Impacts of Environmental Policies and Regulations, Prepared for the Canadian Council of Ministers of the Environment.

OECD (1997) ‘Foreign direct investment and the environment: an overview of the literature’, available online: http://www.oecd.org/daf/investment/fdi/fdienv.htm

OECD (1994) ‘Environmental Policies and competitiveness’, Issues Paper for the Joint Session of trade and Environment Experts, OECD Environment Directorate, Trade Directorate.

Wheeler, D. and A. Mody (1992) ‘International investment location decisions: the case of US firms’, Journal of International Economics, Vol. 33, pp.57–76.

Berman, E. and Bui, L.T. (1999) ‘Environmental regulation and labor demand: evidence from the south coast air basin’, Journal Of Public Economics (79)2 (2001) pp. 265-295.

Goodstein, E. (1999) The Trade-Off Myth: Fact and Fiction about jobs and the Environment, Island Press.

Morgenstern, R.D., Pizer, W.A. and Shih, J-S. (2000) ‘Jobs versus the environment: an industry-level perspective’, RFF Discussion Paper 99–01–REV.

Repetto, R. (1995) ‘Jobs, competitiveness and environmental regulation: what are the real issues?’, World Resources Institute.

US Department of Labour (1990) ‘Mass layoffs in (various years)’, Bulletin (Bureau of Labor Statistics), 2310, 2375 and 2395.

Grossman, G.M. and A.B. Krueger (1993). Environmental Impacts of a North American Free trade Agreement. " in P. Garder (ed.), The U.S.-Mexico Free Trade Agreement, MIT Press, Cambridge, Massachusetts, USA.

Sorsa, P. (1994) ‘Competitiveness and environmental standards: some exploratory results’, World Bank Policy Research Working Paper No. 1249.

Tobey, J.A. (1990) ‘The effects of domestic environmental policies on patterns of world trade: an empirical test’, Kyklos, Vol. 43, pp.191–209.

World Trade Organization (1999) ‘Trade liberalization reinforces the need for environmental cooperation’, WTO NEWS Press Releases Press/140, 8 October.

Porter, M.E. (1991) ‘Canada at the crossroads – the reality of a new competitive environment’, Study Prepared for the Business Council on National Issues and the Government of Canada.

Porter, M. and van der Linde, C. (1995) ‘Green and competitive’, Harvard Business Review, September-October, pp.120–134.