Implementation of environmental regulations leads to ecological, economical advantages

As climate change continues to have a profound impact on the Earth, countries have started enacting environmental reforms in an attempt to reduce emissions. Despite the initial costs incurred by certain industries, environmental regulations have the opportunity to be incredibly beneficial to the economy.

While many argue that environmental regulations will lead to unemployment in the copper, steel, textile and coal industries, the effects of this unemployment compared to nationwide layoffs are minuscule.

Employer estimates report that environmental regulations account for less than one-tenth of 1 percent of all mass layoffs nationwide, as reported by Grist. Changing the design of a plant is therefore unlikely to cause copious amounts of job loss.

Pollution control costs for firms in reality represent a very small portion of their total business costs. When surveyed, many firms tend to exaggerate the estimated costs of pollution control in an attempt to become exempt from these regulations, as reported by Boston College. It is highly unlikely that a cost induced by environmental regulation will have a large enough effect to cause increased worker layoffs.

In Wyoming, as coal mines are shutting down, wind-powered farms have been starting up, according to The New York Times. Currently, there is a high demand for workers in the renewable wind energy industry, creating a perfect segue for unemployed coal workers to find new work. Free job training programs for wind farms have been offered to displaced coal workers, with almost guaranteed job placement after the two-week training.

At first glance, environmental regulations that limit or prohibit the release of an emission will inevitably create costs that were not there before. These costs, however, can be offset by the innovation and improvement the company experiences when complying with this new regulation, according to “Toward a New Conception of the Environment-Competitiveness Relationship” by Michael Porter and Claas van der Linde. 

By making it clear to a company the pollution it produces, environmental regulation simultaneously calls to attention the unnecessary, inefficient methods that can be improved upon. Pollution is a type of economic waste, as outlined by Porter and Linde, signaling to companies that their resources are not being utilized to their highest value.

These regulations can change a firm’s production methods to be more efficient and less costly, having the potential to save the company money in the long run. This could either offset or even outweigh the initial costs of the regulation and possibly lead to higher employment.

Additionally, if one country is the first to pass stringent environmental regulation, their firms are likely to adapt and create the most efficient production methods before anyone else. This gives the firms a “first-mover advantage,” meaning they have the competitive advantage over other firms that may not be as efficient due to their superior knowledge and technology, according to Journalist’s Resource.

Environmental regulations have proven that there isn’t a trade-off between economic growth and environmental protection: properly designed regulation that gives companies the option to freely innovate eco-friendly practices can be beneficial to both the economy and the environment.