Environment Regulation and the Competitiveness of U.S. Manufacturing

What Does the Evidence Tell Us?

There is a heated debated among policy makers about the relationship between domestic environmental regulation and international competitiveness. The conventional wisdom among economists is that environmental regulations impose significant costs, slow productivity growth, and thereby hinder the ability of U.S. firms to compete in international markets. Under a more recent, revisionist view, environmental regulations are seen as being not only benign in their impacts on international competitiveness, but actually a net positive force driving private firms and the economy as a whole to become more efficient and competitive in international markets.