Welcome to DU!
The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards.
Join the community:
Create a free account
Support DU (and get rid of ads!):
Become a Star Member
Latest Breaking News
General Discussion
The DU Lounge
All Forums
Issue Forums
Culture Forums
Alliance Forums
Region Forums
Support Forums
Help & Search
In right balance, environmental regulations increased firms' profits, new study finds
http://news.ku.edu/2016/08/04/right-balance-environmental-regulations-increased-firms-profits-new-study-finds[font face=Serif][font size=5]In right balance, environmental regulations increased firms' profits, new study finds[/font]
Thu, 08/11/2016
[font size=3]LAWRENCE — CEOs and corporate lobbyists often spend plenty of time decrying how potential government regulations will affect their bottom line, but a new University of Kansas study finds that the U.S. Clean Water Act, when implemented in the right balance, improves firms' profitability.
Between January 1995 and June 2001, when chemical manufacturing companies faced stringent wastewater discharge limits, but not strict government monitoring, or vice versa, companies were able to increase profitability compared with companies simultaneously facing both loose limits and lax monitoring, according to the study published online recently in the Journal of Regulatory Economics.
"If an environmental agency pushes hard on a pollution limit but does not monitor the limit too stringently, the agency creates a space in which companies can be creative and discover ways in which they can either market their environmental protection efforts to customers and secure a bigger market share or find less costly ways of manufacturing their products or dealing with waste," said lead author Dietrich Earnhart, KU professor of economics. "The regulations put a different pair of glasses on companies; by looking through a new lens, companies get creative."
…
They find that when wastewater discharge limits were stringent and inspections were frequent, profits declined, which follows conventional economic thinking. However, under conditions when one was stronger than the other, profits improved, consistent with the Porter hypothesis, which asserts that properly designed environmental regulations motivate businesses to innovate, eventually increasing profitability.
…[/font][/font]
http://dx.doi.org/10.1007/s11149-016-9304-8Thu, 08/11/2016
[font size=3]LAWRENCE — CEOs and corporate lobbyists often spend plenty of time decrying how potential government regulations will affect their bottom line, but a new University of Kansas study finds that the U.S. Clean Water Act, when implemented in the right balance, improves firms' profitability.
Between January 1995 and June 2001, when chemical manufacturing companies faced stringent wastewater discharge limits, but not strict government monitoring, or vice versa, companies were able to increase profitability compared with companies simultaneously facing both loose limits and lax monitoring, according to the study published online recently in the Journal of Regulatory Economics.
"If an environmental agency pushes hard on a pollution limit but does not monitor the limit too stringently, the agency creates a space in which companies can be creative and discover ways in which they can either market their environmental protection efforts to customers and secure a bigger market share or find less costly ways of manufacturing their products or dealing with waste," said lead author Dietrich Earnhart, KU professor of economics. "The regulations put a different pair of glasses on companies; by looking through a new lens, companies get creative."
…
They find that when wastewater discharge limits were stringent and inspections were frequent, profits declined, which follows conventional economic thinking. However, under conditions when one was stronger than the other, profits improved, consistent with the Porter hypothesis, which asserts that properly designed environmental regulations motivate businesses to innovate, eventually increasing profitability.
…[/font][/font]
