In December 2015 the COP-21 negotiations on climate change to be held in Paris will hopefully lead to a commitment from many countries to significantly reduce their greenhouse gas emissions. The economic cost linked to emission reductions could penalise countries planning a strong reduction and thus cause a rebalancing of international economic competitiveness. These economic impacts present a major obstacle to achieving a global agreement on climate.

The new research project “Environmental Regulation and Economic Competitiveness: Employment, Firms’ Location and Technology Adoption”, conducted by Dr Bruno Lanz, Research Associate at the Centre for International Environmental Studies, under the lead of Timothy Swanson and Richard Baldwin, Professors of International Economics, aims to better understand the impact of environmental policies on economic competitiveness. The project will analyse in particular the case of two countries of major importance for the future of emissions of greenhouse gases: China and the USA. In the case of China, it will examine how environmental policies introduced by regional governments affect the competitiveness of Chinese firms in terms of productivity, employment and exports. In the case of the USA, it will focus on the adoption of new technologies under an emission trading scheme. The project will also look at how specific sectors, such as the automobile industry, may be affected by environmental regulations.

The project will result in a number of environmental policy recommendations that will be shared with field researchers, policymakers and economic actors throughout Switzerland and the EU.

The project is funded by the Swiss National Science Foundation (SNF) for a duration of three years. The research is a collaboration between the Centre for International Environmental Studies and the Centre for Trade and Economic Integration.