There is a growing body of evidence that environmental regulations can support strong economic performance. This report from Sustainable Prosperity finds that environmental regulation comes with lower compliance costs and greater innovation than previously thought.
In 2014, researchers at the OECD constructed the first comprehensive set of data on environmental strictness and found that “an increase in stringency of environmental policies does not harm productivity growth.” We know this to be true for specific policies as well – the United States SO2 market has led to a greater than expected emissions reduction, at less than half the predicted compliance costs. The same good news story has been seen in Canada – The introduction of British Columbia’s carbon price coincided with a 16% decrease in overall fuel use in its first 5 years, at the same time that the province’s economy grew slightly more quickly than the rest of Canada’s.