Resource productivity, competitiveness and environmental policies

The use and consumption of natural resources (like materials, energy and land) put an increasing burden on the environment. This recently has gained significant interest in scientific and political discussions. Resource productivity is often presented as a strategy to lower resource consumption and the environmental impacts while maintaining our wealth.

It is often said that policies aimed at improvements of resource productivity are a win-win situation: they could both enhance the environment and the economy. The environmental improvements occur because saving on resources in the end implies less emissions and waste. The economic improvements occur because saving on resources simply would save money. Business normally tends to overlook profitable saving options, in this view, and resource productivity policies could help business in internalizing them.

In this research we investigate the potential use of resource productivity as theme in environmental policy. We investigate various market failures that may form an argument for governmental policies. We also investigated the claim that resource productivity could enhance competitiveness of firms and thereby result in a win-win situation. We do this by referring to the literature on the Porter hypothesis and present empirical analysis on the relationship between energy productivity and income. Finally we address the use of economic instruments that can help to circumvent some of the lack of progress on increased resource productivity.