Details

Autor(en) / Beteiligte

• Organisation for Economic Co-operation and Development

Titel

Assessing the Economic Impacts of Environmental Policies Evidence from a Decade of OECD Research

Ort / Verlag

Paris : OECD Publishing,

Erscheinungsjahr

2021

Beschreibungen/Notizen

• Intro -- Foreword -- Acknowledgements -- Executive Summary -- 1 The economic impacts of environmental policies: Key findings and policy implications -- Introduction -- Environmental policies and competitiveness concerns -- Evidence from OECD studies -- Is looking at past experience helpful with regard to future environmental policies? -- The effects of environmental policies on firm behaviour -- The Pollution Haven and Porter hypotheses: the corner stones of predictions of the economic effects of environmental policies -- Different predictions for different aggregation levels -- Predictions for individual economic outcomes -- Measuring environmental policy stringency -- Economic impacts from environmental policies - empirical evidence from OECD studies -- Technologically-advanced industries and firms benefit in the short-run from environmental policies in terms of productivity gains -- Environmental policies have heterogeneous effects on employment, inducing job reallocation between energy-intensive and non-energy-intensive sectors -- Domestic investment suffers, firms invest more abroad -- Overall trade flows are barely affected, with rising exports of low-pollution sectors and declining exchanges of high-pollution ones -- Are the economic effects small only because the effects on environmental outcomes are small? Joint analysis of economic and environmental impacts -- The European Union Emissions Trading System and its economic and environmental impacts -- The joint effects of energy prices and carbon taxes in the French manufacturing sector -- The joint effects of energy prices in the Indonesian manufacturing sector -- Summing up: What to expect from a 10% increase in relative energy prices? -- Winners and losers -- Economy-friendly environmental policies -- Appropriate policy design can underpin the economic benefits of environmental policies.
• More stringent environmental policies do not have to come with an increased regulatory burden -- Policy packaging could help increase public acceptance of tighter environmental policies -- Notes -- References -- 2 Productivity growth, environmental policies and the Porter Hypothesis -- Background -- Environmental policies affect firms' economic performance -- Productivity increases at the firm level are possible due to previously overlooked potential gains -- An industry-level analysis allows to take reallocation across firms into account -- Empirical evidence is inconclusive so far -- Contribution of this study - first large-scale panel study, combining industry and firm level analysis -- Empirical set-up -- An augmented neo-Schumpeterian growth model to analyse productivity effects -- Heterogeneous industry effects through different exposure to country-level environmental regulation -- Empirical model -- Data -- Results -- Support for the strong version of the Porter Hypothesis at the industry level -- High-productivity firms win, low-productivity firms lose out -- Difference in industry and firm level results are likely driven by exit dynamics -- The effects are independent of the level of environmental regulation but depend on policy design -- The results are robust and potential endogeneity concerns are limited -- Conclusion -- Summary of results -- Limitations: Evidence is limited to OECD countries -- the channels at work are not analysed -- A stronger focus on market-based policies is needed -- Notes -- References -- 3 Firm employment, energy prices and environmental policy stringency -- Background -- A strong negative correlation between energy prices and employment -- Theory predicts no long-run effects but potential short-term adjustments -- Empirical studies suggest a small negative effect on employment.
• Contribution of this study - a large-scale dataset allowing for heterogeneous effects, investigating energy prices and environmental policies -- Empirical set-up -- Assessing the effects of energy prices and other environmental policies -- Empirical model -- Data -- Results -- Negative but small decline in employment in response to higher energy prices and tighter environmental policies -- Energy-intensive sectors face a larger negative effect on employment than other sectors -- Difference in industry- and firm-level results are driven by a positive effect on the exit of firms -- Robustness checks of firm level analysis -- Conclusion -- A small employment effect on average - but stronger in energy-intensive sectors -- An upper bound of the true effect? -- Complementary policies to ease transition costs -- Effects on types of workers and on wages remain outside of the scope of this study -- Notes -- References -- 4 Induced investment through environmental policies -- Background -- Environmental policies need to incentivise investment in carbon-saving production processes -- Environmental policies may reduce investment through output reductions -- The net effect on investment is unclear a priori -- Investment effects depend on the substitutability of inputs -- The effects on domestic and foreign investment are potentially heterogeneous -- The literature is inconclusive so far -- This study: the first large-scale panel analysis with heterogeneous effects across sectors -- Empirical set-up -- Capital demand derived from a three-factor production function -- Empirical model -- Identification of the effect -- Data -- Results -- Total investment goes down, but the effect is heterogeneous -- Policy-driven price increases seem to trigger investment effect -- Dirty sectors are more sensitive to price changes, particularly in times of high energy price levels.
• Divestment effect of domestic investment is present for clean and dirty sectors -- Robustness checks -- Conclusion -- Energy-intensive sectors seem to offshore investment -- Small firms not covered here might provide innovative technological solutions -- Additional policies might help to mitigate the estimated effect on investment -- Notes -- References -- 5 Foreign direct investment and energy prices -- Background -- Increases in FDI might be motivated by rising energy prices -- Carbon leakage effect through FDI -- The empirical literature comprises mainly single country studies -- The first cross-country study, accounting for endogenous firm choice of fuel inputs -- Empirical set-up -- Absolute versus relative energy price changes -- An instrumental variable approach is used to avoid endogeneity problems in the estimation -- Empirical model -- Data -- Results -- Relative energy prices are a driver of FDI as opposed to absolute prices -- Firms respond differently depending on whether they face an increase or decrease in energy prices -- The economic magnitude of the effect is small -- Conclusion -- Support for the pollution haven effect found - but magnitude is small -- The sample is limited to listed firms, and only the intensive margin is studied -- Carbon leakage concerns are likely to be overstated -- Notes -- References -- 6 Global value chains, environmental policies, and the Pollution Haven hypothesis -- Background -- The increased fragmentation of production chains gives rise to global value chains -- The comparative advantage of economies might be shifted by tighter environmental policies -- Offshoring versus efficiency gains - what the theory says -- Empirical studies so far ignored changes in the domestic part of value added in exports -- Contribution of this study - new evidence on domestic part of GVCs -- Empirical set-up.
• An augmented gravity model is deployed -- Data on the domestic share of value added provide a detailed look at GVCs -- Heterogeneous sector effects -- Empirical model -- Data -- Results -- Only dirty sectors move part of gross exports to pollution havens -- The domestic share of value added is affected for both dirty and clean sectors -- Economic significance for the domestic share of exports is larger than for net exports but the overall effect is small compared to other trade determinants -- Robustness checks -- Conclusion -- Dirty industries face a competitive disadvantage, clean industries a competitive advantage -- The detailed design of environmental policies is not captured -- A good policy setting could help clean sectors gain competitiveness -- Delaying environmental efforts risks masking competitiveness losses of dirty sectors -- Joint global climate commitments should be supplemented with agreements for clean technology transfers -- Notes -- References -- 7 The European Union Emissions Trading System and its economic and environmental impacts -- Background -- The largest emissions trading system in the world -- Emissions cap and verified emissions decreased over time -- Pollution Haven and Porter Hypothesis - the theory is ambiguous -- Empirical studies on the EU ETS focused on either economic or environmental outcomes so far -- Contribution of this study - first comprehensive study of environmental and economic effects of the EU ETS -- Empirical set-up -- Causal analysis using a difference-in-difference approach -- Empirical model -- Data -- Results -- The EU ETS led to emission reductions, while firm performance was largely unaffected -- The effects of the EU ETS are heterogeneous across sectors and vary with the number of free allowances granted -- Robustness checks -- Conclusion.
• The EU ETS led to emission reductions of regulated firms, but did not negatively affect their economic performance.
• Over the past decades, governments have gradually adopted more rigorous environmental policies to tackle challenges associated with pressing environmental issues, such as climate change. The ambition of these policies is, however, often tempered by their perceived negative effects on the economy.
• Description based on publisher supplied metadata and other sources.