Measuring environmental policy stringency in OECD countries

Abstract

Working Papers should not be reported as representing the official views of the OECD or of its member countries. The opinions expressed and arguments employed are those of the author(s).

Environmental stringency and competitive export strengths: a study in context of environmentally sensitive goods in G20

“…EPSI is a composite measure, based on data of different environmental indicators (Kruse et al ., 2022). It is a country-specific, internationally acceptable, and comparable measure of environmental stringency in the current time (Botta and Kozluk, 2014; Ahmed, 2020).…”

“…EPSI is a comprehensive index consists of three broad groups of indicators - market-based (Taxes and Certificates), non-market-based (Performance Standards) instruments and technology support (Upstream and Adoption) related to environmental stringency indicators. In the revised version of OECD data, EPSI ranks 40 countries and 13 policy instruments according to their commitment to enforcing measures that reduce greenhouse gas emissions and air pollution (Kruse et al ., 2022). Market-based policies account for one-third of the new EPS index, while non-market-based policies and technical assistance programs account for the remaining part.…”

“…According to the EPSI report in 2020 (Kruse et al ., 2022), the environmental policy stringency of G20 countries varies widely. Some G20 countries, such as Germany, France, and UK, have relatively high EPSI scores, indicating a higher level of environmental policy stringency.…”

Can electricity liberalisation foster the development of radical clean-energy technologies?

“…The matrix X contains country-level control variables that might affect the development of clean-energy patents. First, I use the sub-index of the OECD Environmental Policy Stringency database (2022) that measures the use of policies aimed at supporting clean-energy innovations (Kruse et al, 2022). I also control for GDP per capita 14 and the price of crude oil imports computed at the country level 15 .…”

Making the grass greener

“…36 The European Commission recently proposed a regulation of ESG rating providers to increase transparency (European Commission, 2023 [130]) 37 In fact, high E scores can positively correlate with high carbon emissions, suggesting that the E score may not be an effective tool to differentiate between companies with respect to their impact on the environment (Boffo, Marshall and Patalano, 2020 [87])). 38 Stock exchanges could also consider issuing guidelines for ESG disclosures designed in collaboration with companies, investors, and regulators while data providers should agree on best practices and become as transparent as possible about their methodologies and the reliability of their data (Kotsantonis and Serafeim, 2019 [124]).…”