Stronger Environmental Policies Do Not Hurt Economic Growth - The Minute

Jan 15, 2015 4:00 PM ET
Multimedia with summary

Studies of individual environmental laws, such as the Clean Air Act, have found that they have little impact on employment and productivity. But as climate policies increase in scope and ambition, policy makers need to know the combined, macro-economic effect of all environmental policies, from emissions standards to clean water requirements and controls on power plants. Now, there is hard data showing that more, and more stringent environmental policies do not harm economic growth.

That’s the finding of researchers at the Organisation for Economic Co-operation and Development who have compiled the first comprehensive set of data on environmental strictness and its effect on productivity. The figures cover 24 OECD countries from 1990 to 2012, and draw on the ORBIS database of information on 44 million companies. The report’s conclusion contradicts what governments and companies often believe: that green regulations may be justified in the long run, but that they come with immediate, substantial economic costs. One interesting point: stricter environmental policies may encourage businesses to invest more in efficiencies and innovations than they would have otherwise.

I’m John Howell for 3BL Media.

Video Source: Stronger Environmental Policies Do Not Hurt Economic Growth