Review of Environmental Economics and Policy - Advance Access

Perspectives on Pollution Abatement and Competitiveness: Theory, Data, and Analyses

Pasurka, C. — 2008-06-24

The implementation of environmental regulations has raised concerns about the effect of pollution abatement on the competitiveness of firms, industries, and nations. These concerns have led to efforts to assess the relationship between pollution abatement and competitiveness. This article presents national- and industry-level data on pollution abatement costs and emissions, and discusses the theoretical and empirical literature on the link between pollution abatement and competitiveness. The article first reviews theoretical perspectives on the link between competitiveness and pollution abatement. Next, historical data on pollution abatement costs and emissions across nations and industries are summarized. Finally, the article reviews the empirical evidence on the link between pollution abatement and indicators of competitiveness.

Introduction to the Issue

2008-06-13

Announcements

2008-06-13

Local Solutions to Global Problems: Climate Change Policies and Regulatory Jurisdiction

Bushnell, J., Peterman, C., Wolfram, C. — 2008-06-03

This article considers the efficacy of various types of environmental regulations when they are applied locally to pollutants, such as greenhouse gases, whose damages extend beyond the jurisdiction of the local regulator. While previous work has noted the possibility for leakage, whereby polluting sources move outside the jurisdiction of the regulation, we identify an additional problem that occurswhen policies are targeted downstream, at consumers of goods whose production creates pollution. Specifically, we show how consumer-based policies can be circumvented by a simple reshuffling of who is buying from whom. We argue that the leakage problems are more pronounced with regulations that impose costs on firms than with subsidies that reward production of low-polluting goods. Reshuffling problems aremore pronounced when the options for compliance are more flexible, such as with market-based regulations. We conclude that localities may be able to have the greatest impact on global pollutants when they enact relatively inflexible regulations such as efficiency standards or targeted subsidies.