The competitiveness impacts of environmental regulation


Ever since the first major environmental regulations1 were enacted in the 1970s, there have been concerns about their potential impacts on businesses. Managing the balance between environmental constraints and economic impacts has been an ongoing dilemma. The recent economic downturn, combined with increased competition from emerging economies, has made the debate even more acute, particularly in relation to climate change policies. The growing importance of this debate in policy circles has led to a large number of studies that attempt to quantify the impact of environmental regulations on businesses. These studies have analysed many aspects of the economic performance of regulated businesses, including productivity, innovation, employment, profitability, output and trade. This policy brief aims to provide an up-to-date assessment of the results from this vast and growing literature.

GRI Policy Brief