Environmental regulation and competitiveness in Brazilian industry, with special reference to the energy sector

Abstract

This paper examines the behaviour of Brazilian industrial firms in response to environmental regulation, theoretically and empirically, with special reference to the oil and natural gas sectors. Chapter 2 summarises the arguments and counterarguments in current debates on competitiveness and environmental regulation. Chapter 3 analyzes the environmental performance of the Brazilian industry, arguing that a trend towards specialisation in products with relatively high pollution potential has occurred. Chapter 4 focuses on the diffusion of clean technologies, arguing that a series of firm-specific and sector-specific characteristics such as size, capital ownership, and market structure affect this process of specialization in Brazil. Chapter 5 takes a closer look at the oil and gas sectors, presenting estimates of natural resource depletion and pollution in Brazil, and examining trends in environmental regulation within the sector. Chapter 6 presents the main conclusions and policy recommendations. The Appendix reviews the evolutionary economics literature and the application of the debate on innovation and competitiveness to explain the diffusion of clean technologies.