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Firms in (a) Greener Economy

Project description

Balancing green regulations and economic impact

As environmental regulations tighten worldwide to curb greenhouse gas emissions, the challenge lies in balancing effective policies with economic impact. While decarbonisation is universally supported, the economic consequences remain a subject of debate. Supported by the Marie Skłodowska-Curie Actions programme, the FiGE project will develop environmental stringency indicators, focusing on Germany and France. These countries have contrasting energy approaches. Germany’s emphasis on renewables and France’s focus on nuclear energy offer a unique opportunity for comparison. By examining the effects of stricter regulations on firms, trade, and productivity, FiGE aims to provide recommendations that support environmental performance while maintaining economic stability, ensuring policies foster innovation without driving industries abroad.

Objective

The proposed project addresses the growing importance of stringent environmental regulations as tools to mitigate greenhouse gas (GHG) emissions and improve environmental performance. While there is broad consensus on the need for decarbonization, the economic impact and effectiveness of these policies remain debated. Building on Nunez-Rocha & Silberberger (2021), this project will develop environmental stringency indicators using legal documents from FAOLEX and ECOLEX, focusing on Germany and France. These countries, with distinct energy approaches—Germany favoring renewables and France prioritizing nuclear energy—provide a unique basis for comparative analysis, both operating under EU regulations. The first objective (O1) is to create indicators of environmental regulation stringency for Germany and France. This will enable an in-depth assessment of how stricter regulations impact firms and will also evaluate the effectiveness of these regulations in enhancing environmental performance. The second objective (O2) explores the effect of environmental regulations on trade, focusing on how stricter policies impact imports, exports, and the comparative advantage of firms. The research will investigate the existence of a Pollution Haven Effect, where stricter regulations may push industries to relocate abroad. The third objective (O3) examines the impact of regulatory stringency on firm productivity, considering both short-term compliance costs and long-term innovation gains. This analysis will explore how different industries respond to regulations and whether innovation offsets potential productivity losses. The project aims to provide policy recommendations to design regulations that balance environmental protection with economic stability, enhancing environmental performance without displacing pollution or harming productivity.

Keywords

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Programme(s)

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Topic(s)

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Funding Scheme

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HORIZON-TMA-MSCA-PF-EF - HORIZON TMA MSCA Postdoctoral Fellowships - European Fellowships

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Call for proposal

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(opens in new window) HORIZON-MSCA-2024-PF-01

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Coordinator

Private Universitaet Witten/Herdecke gGmbH
Net EU contribution

Net EU financial contribution. The sum of money that the participant receives, deducted by the EU contribution to its linked third party. It considers the distribution of the EU financial contribution between direct beneficiaries of the project and other types of participants, like third-party participants.

€ 202 125,12
Address
Alfred-Herrhaussen Strasse 50
58455 Witten
Germany

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Region
Nordrhein-Westfalen Arnsberg Ennepe-Ruhr-Kreis
Activity type
Higher or Secondary Education Establishments
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Total cost

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Partners (1)

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