OECD report shows economic growth not slowed by green policies
The drive towards more sustainable, less-polluting economies does not result in lower productivity or reduced economic activity, a new study by the OECD has revealed. The study shows that while countries may initially experience a fall in economic growth as companies adapt to green regulations, what follows is generally a rebound period, with companies increasing productivity through enhancing innovation and taking advantage of new opportunities opened by the regulations.
Although more polluting companies have generally seen a downturn as a result of national efforts to combat climate change, the shortfall in production from these businesses has been picked up by companies with cleaner-business models, meaning the net effect has been minimal. The report stressed that to maintain or increase growth, green policies must be implemented in a manner that does not impede competition, or which presents an unreasonable “green administrative burden”.
The OECD recommends that policies be target concerned without being overly prescriptive, allowing firms to find the best ways to embrace sustainability. "The policy message is clear: more stringent environmental policies, when properly designed, can be introduced to benefit the environment without any loss in productivity," the report states. “Environmental policies can and should be shaped to spawn new ideas, mobilise cleaner technologies and encourage new business models that benefit both the economy and the environment.”
For more information, view the December OECD Policy Brief [PDF].