The Impact of Environmental Regulation on the Investment Climate

Abstract

In this contribution to honour Willemien du Plessis we use the economic approach to law to explain how environmental law affects economic development and vice-versa. The contribution starts by presenting the Environmental Kuznets Curve that makes clear that environmental regulation should not retard economic development but that, on the contrary, environmental protection and economic growth can go hand-in-hand, provided there is environmental regulation. The contribution further discusses the idea of competition between legal orders and how this affects environmental law, and to this end both the race to the bottom as well as the race-to-the-top are discussed. Finally, attention is paid to the role of environmental law in economic development.

Keywords

• Environmental regulation
• investment
• World Bank
• federalism
• competition
• environmental quality