Environmental Protection Versus Economic Development: A False Trade‐Off?

Abstract

Is a trade‐off between the social benefits of regulation and the economic benefits of development inevitable? We argue that environmental regulation may deter economic growth in some contexts, however, in other contexts the benefits of regulation may be obtained with little or no economic loss. We develop an explanation of the economic impacts of state environmental policy based on a model of public influence on private resource allocation decisions. In this model, we assume utility‐maximizing firms will make investment choices based upon the projected profits on their investments and their willingness to accept the risk associated with the investments. We assert that state policies and administrative institutions influence perceptions of risk by increasing or decreasing uncertainty over future environmental policy and influence return on investments at particular locations by affecting firm‐level production costs. Our results confirm that certain administrative arrangements for environmental regulation may enhance, rather than impede, economic development.

Moderating Effects of Trust on Environmentally Significant Behavior in Korea

“…The relationship between environmental protection and economic growth has been an ongoing debate [50][51][52]. This environment-economy dichotomy indicates the level of perception toward the impact of environmental protection and economic development.…”

Sustainability Assessment of Transport Infrastructure Projects: A Review of Existing Tools and Methods

“…Examples in the literature include particular studies for determining the trade-off between two specific effects such as environmental care and long-term growth -see Gradus and Smulders (1993); capital accumulation and environmental quality -see Becker (1982). Other research works include the trade-off between two specific dimensions of sustainability such as economic growth and environmental quality -see Den Butter and Verbruggen (1994) -or environmental protection versus economic development -see Feiock and Stream (2001).…”

Primary Factors Influencing Green Building in Cities in the Pacific Northwest

“…Many studies have focused on the positional factors such as clustering or transaction costs (Jacobs 1968;Porter 1990;and Dawkins, 2000) or compositional factors such as location or industry (Lewis, 2001;and Zaharan et al, 2008). Political factors such as the influence of elites and urban regimes (Basolo 2000;Stone 1989), social issues of equity in sustainable planning (Saha & Paterson, 2008 ), capacity to implement plans (Jepson, 2004), and instrumentation or the tools in terms of taxes and subsidies (Sullivan, 2002;Feiock & Stream, 2001;and Eisinger, 1988) have also been considered. Feiock and Stream (2001) also looked at multiple economic incentives and factors that might influence environmental policy design.…”