What the Federal Government can do to Encourage Green Production

Abstract:     
In recent years numerous studies and media accounts have discussed how companies that are improving their environmental performance by undertaking green production are reporting significant financial benefits from doing so. While deriving financial benefits is good for business, the environmental benefits of these private actions also can be enjoyed by society. This win-win arrangement raises an important question for the new Presidential administration and the 111th Congress: If business opportunities exist from engaging in green production, why aren't all companies pursuing it? This research identifies six obstacles that discourage most companies from undertaking green production: Insufficient federal leadership, poor understanding of environmental costs and benefits, weak internal coordination, organizational inertia, poor diffusion of green production best practices, consumer and investor inability to recognize and reward green companies. Unless these obstacles are resolved, the vast majority of companies will likely forgo developing a green production program. This research offers recommendations to the new administration and Congress to address these issues. The recommendations are categorized into three themes: strengthening federal leadership, expanding federal initiatives, and establishing a mandatory environmental product label policy, and are supported by examples from numerous companies. These examples provide important context for the new administration and the 111th Congress to take stronger action to encourage green production throughout society.

Number of Pages in PDF File: 41

Keywords: Green production, product labeling, environmental policy, environmental benefits

JEL Classification: M14, Q28, Q38, Q48, Q20, Q30, Q40

Accepted Paper Series