A clean and healthy environment is essential for supporting economic activity and well-being in the long-term. Practically every economic and leisure activity – as well as life itself - has broadly-defined environment as a key input and could not exist without it. However, the relationship between the environment and GDP growth per se is more complex.
With environmental threats on the rise, how can we attain both economic and environmental challenges in a global economy? Less stringent policies give an advantage to more pollution-intensive production, but at the expense of less polluting industries. Read more on whether stricter environmental policies hurt export competitiveness.
The Growth, Investment and the Low-Carbon Transition project analyses how low-emission and climate-resilient development can be achieved without compromising economic growth, competitiveness, or well-being across the G20 group of countries and beyond.
Greener growth requires stringent environmental policies that are flexible and minimise barriers to entry and competition. The choice and implementation of environmental policy instruments is likely to be crucial. Flexible, market based instruments such as taxes and trading schemes are found to be more friendly to productivity growth.