Toward a New Conception of the Environment-Competitiveness Relationship

Michael E. Porter and Claas van der Linde

Journal of Economic Perspectives, 1995, vol. 9, issue 4, 97-118

Abstract: 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.

JEL-codes: O31 Q20 (search for similar items in EconPapers)
Date: 1995
Note: DOI: 10.1257/jep.9.4.97
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Citations: View citations in EconPapers (1231)

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