Policymakers face the challenge of supporting a healthy environment while fostering inclusive and sustainable economic development. OECD analysis helps policymakers understand the impacts of environmental policies to mitigate their adverse effects.
The results of a decade of ex-post OECD research show that implementing more stringent environmental policies has had little effect on economic performance and employment of industry despite achieving substantial environmental benefits. Despite the small average effects, localised impacts can be larger in generating winners and losers. While environmental policies can deliver economic benefits for some industries and firms, others may lose – specifically the most polluting and least-efficient firms. Environmental policies need to be designed in a way that amplify the positive effects on the economy while supporting workers, industries and regions that are most affected, without sacrificing the benefits for the environment.