The Effect of Climate Policies on Industrial Productivity

  • Authors

    • Marco Bianchi Operations Manager, Ferrari, Italy. Author
    • Laura Conti Business Analyst, Deloitte Italy, Italy. Author

    DOI:

    https://doi.org/10.67228/30715636/IJETMR-2023PI3F7M

    Published 05-04-2023

  • Climate Policy, Industrial Productivity, Environmental Regulation, Total Factor Productivity, Carbon Pricing, Sustainable Development

    Issue

    Vol. 6 No. 1 (2023)

    Section

    Articles

    How to Cite

    [1]
    M. Bianchi and L. Conti, “The Effect of Climate Policies on Industrial Productivity”, IJETMR, vol. 6, no. 1, pp. 01–15, May 2023, doi: 10.67228/30715636/IJETMR-2023PI3F7M.

  • Abstract

    Climate change has risen to become one of the most serious issues in the world today as the governments around the world have been forced to adopt climate policies with the main objective of mitigating the emission of greenhouse gases and the adoption of green industrial practices. Although these policies are necessary in environmental protection, their effects on the industrial productivity are the focus of an extensive scholarly and policy discussion. The research paper will look at how climate policies impact the productivity in various industrial sectors with emphasis to regulatory rigidity, carbon pricing, and environmental standards that have been applied through technology. Through a quantitative econometric model with panel data analysis, the study measures the effect of climate policies on the output efficiency, technological advances, and cost-structure of industries. The measures of productivity used in the study include Total Factor Productivity (TFP), labour productivity as well as energy efficiency, whereas macroeconomic variables to be controlled are capital investment, trade openness and energy prices. Findings suggest that effective climate policies would be able to increase productivity by driving innovation and efficiency in resource utilization, but poorly coordinated policies would cause transitional costs in productivity. The results will be incorporated into the current discussion of sustainable industrial development by emphasizing the circumstances within which climate policies are perceived to be rather spurs than restrictions of industrial performance. This study provides useful information to policymakers, industrial players, and scholars who would want to ensure that economic competitiveness is balanced with environmental sustainability.

  • References

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