A shared future - balanced development - Short version
7. The market must support sustainable development
 |
Sustainable development and economic growth are not contradictory. Businesses engaged in significant environmental initiatives generally do well in competition. A forward-looking commitment to sustainable development and environmental protection may improve the competitiveness of Danish businesses. |
There must be economic advantages associated with integrating environmental concerns into
businesses. Businesses must be motivated to take risks associated with developing and
selling environmentally friendly products. It must also be more attractive for consumers
to purchase environmentally friendly products.The principle that the polluter pays must be
followed consistently. The Danish government hopes to promote market based measures for
example environmental taxes, subsidies, and tradable quotas to ensure that prices reflect
a product's actual cost to the environment.Thus consumption and production patterns can be
influenced and environmental pollution may be reduced where the social costs are the
lowest.
Denmark will work towards obtaining international agreement on environmental taxes.
Subsidies, especially tax exemptions in some sectors, may have negative consequences for the environment. A report, which is expected to be finished in the autumn of 2002, on green market economy will investigate whether existing subsidy programs can be adjusted to prevent associated environmental degradation
Reliable information regarding the environmental effects associated with products is a precondition for markets supporting sustainable development. Eco-labels and other forms of environmental information give consumers and businesses the possibility of making real and informed choices. The public sector is a large consumer and thus, may influence markets through its own purchases.
A broader and deeper knowledge base will support sustainable development.The Danish government has established an Environmental Assessment Institute which will conduct high quality, international research and will contribute to determining how environmental goals can be achieved in the most cost-effective way.
It is important that the financial sector also focuses on environmental considerations. When pension fund administrators and other investors prioritise a business' environmental profile, then respect for environmental issues can become a positive factor in market competition. Increased use of "green" and ethical accounting will improve the possibilities of choosing environmentally friendly investments. Evidence from stock indexes, which include "green" businesses' economic results, indicate that environmentally conscious companies often do better in market competition.