Environmental regulations and technological change in the offshore oil and gas industry

Document Type

Article

Date of Original Version

1-1-2005

Abstract

Technological progress can play a key role in raising standards of living while improving environmental quality. Well-designed environmental regulations encourage innovation, while poorly designed regulations can inhibit progress. The Porter hypothesis goes further to suggest that tougher environmental regulations could spur innovation, leading to increased productivity of market outputs. We apply frontier production analysis to measure various components of total factor productivity within a joint production model, which considers both market and environmental outputs. We test the causality between technological innovation and environmental regulation and find support for a recast version of the Porter hypothesis. © 2005 by the Board of Regents of the University of Wisconsin System.

Publication Title, e.g., Journal

Land Economics

Volume

81

Issue

2

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