Environmental taxation can increase business productivity

11 January 2016

Industry has traditionally claimed that strict environmental regulation has a negative effect on its competitiveness. Researchers at the Catholic University of Sacred Heart in Italy used a large database of inter-sectoral transactions to investigate the effect of environmental taxation on EU manufacturing businesses across Europe.
The findings show that environmental regulation can increase innovation and productivity. The results showed that taxes imposed on downstream sectors (i.e. polluting industries that are upstream in the supply chain) had the strongest effects on innovation and productivity (Article Science for Environment Policy News Alert, 7 January 2016).
Click here for the article (371 kB).

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