Green rules 'threaten Britain's competitiveness'

"Rigid" green rules are threatening Britain's competitiveness in the global economy, a study has claimed.

Authors of the study said companies needed more freedom when deciding what techniques to use to comply with environmental goals.

Dr Ramakrishnan Ramanathan said: "We run the risk of businesses being overwhelmed by rigid rules and eventually becoming uncompetitive within the global economy. What we need is regulatory design that lets environmental protection coincide with more competitive and innovative manufacturing."

Industrial water treatment was an example of strict ruling, he said, adding that the government was not just setting the figures but also dictating the techniques and technologies companies were to use, "effectively smothering innovation".

Under the current carbon budget air pollution by 2020 must be at least 26% lower than in 1990.

Dr Ramanathan added: "The brightest can exploit them as an opportunity to move into new product markets and introduce leaner and greener production processes."

For Dr Ramanathan, businesses must adopt a "dynamic mindset", seeing regulations as a potential advantage rather than as an obstacle.

The research, carried out in co-operation with four major manufacturers in the UK, found that the country's most admired and cost effective companies were also environmentally innovative in ways that allow them to cut costs and increase profits.

He said: "For instance, they can take the chance to reduce needless energy consumption and turn recycling into profitable remanufacturing."

However, the government should always provide a framework to prevent "watered down" regulations from catering to business interests.

"Obviously we mustn't lose sight of the fundamental importance of protecting the environment," Dr Ramanathan said.

"But policymakers need to revise older, inflexible rules to bring them into line with newer thinking - and businesses have to be consulted on that. Some might argue this is simply common sense, but we now have the empirical proof to show it can be done - and that it needs to be done."

The study, to be presented at a workshop at the Nottingham University Business School on April 16, is based on the government's statistics and data drawn from five major UK companies and 200 questionnaires completed by environmental sustainability officials at leading companies.

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