- Nouri Najjar
- Aug 1, 2019
Companies that adopt cleaner production processes aren’t just helping the environment – they’re also helping themselves, especially given the rise in new environmental policies.
While looking at the impact of air quality standards, between 2004 and 2010, on the Canadian manufacturing sector, Assistant Professor Nouri Najjar found cleaner firms captured a greater market share because they were more easily able to reduce their pollution without sacrificing output. On the other hand, dirty firms had to either scale back or shut down to meet the policy demands.
He said it’s an important lesson that environmental policies, such as air quality standards, can help improve air pollution and air quality while still allowing businesses to thrive and succeed. During that time period, Najjar found the amount of particulate matter pollution emitted per dollar of output fell by about 35 per cent. Air quality standards caused almost half of the reduction in pollution intensity by shifting output from dirty to relatively clean producers.
“The industry leaders were better able to respond to these policies,” he said. “Like most things in business, when there is a challenge, there might actually be an opportunity. In this context, the opportunity is that, as you become cleaner, you might be able to capture a larger market share relative to your lagging competitors who don’t adopt these cleaner processes.”
Najjar’s future work will look at how air quality regulations affect firms’ ability to compete in foreign markets as well as the benefits of the pollution reductions that result from air quality regulations.
Listen to an interview with Nouri Najjar