FAIRFAX, Va.Though many policymakers have argued that environmental regulations can negatively impact on an organization's bottom line, a new study by George Mason University researcher Nicole Darnall shows that companies that develop green production processes can not only offset the costs of regulations, but can also reap further benefits.
The study, which looked at more than 2,600 manufacturing facilities operating in seven different countries, showed that more stringent environmental policies are related to diminished company profits. However, organizations that improve their environmental performance by enhancing their internal efficiencies and developing new green products and technologies can offset the cost of regulation or even accrue a net gain.
"The primary reason why the United States and many other countries do not have national climate change policy and do not implement more stringent environmental legislation is due to the costs the regulations would impose on firms," says Darnall, assistant professor of environmental science and policy. "The results of this study are important because realizing that these costs can be offsetor eliminated entirelyis further evidence that policymakers could support the advancement of more ambitious environmental policy goals without putting undue financial burdens on corporations."
The study showed that businesses can profit in two important ways. First, by improving their internal production processes to reduce waste, companies are more likely to enhance profits. "Many companies paint their products with solvent-based paints. By switching to water-based paints these businesses can eliminate toxic wastes in their production process and the need to meet certain environmental regulations. They also can speed up the time it takes to get their product to market and avoid long term liabilities associated with toxic waste disposal," Darnall says.
The second way companies can profit fr
|Contact: Tara Laskowski|
George Mason University