State Green Business Climates

Effectiveness of State Green Business Climates

Analysis of policy incentives for attracting green industries

Jan 06, 2011 - Existing state environmental policies in the U.S. employ market incentives, such as tax rebates and exemptions, subsidies, grants and loans, to encourage environmentally-friendly activities. In theory, these policies come together to create a business-friendly policy environment for the purpose of attracting green industries.

By identifying whether those states with employment growth in the green economy from 2000 to 2007 actually were the states with green business friendly climates, this article addresses the importance of policy incentives in attracting green businesses.

This research assists policymakers in creating sustainable economic development plans, demonstrates which states are leaders in the U.S. green economy, and provides insight into the inherent differences between green and traditional industries. The study below begins to investigate the economic development potential of the green economy.

Business Climates and the Role of the State

As a result of the federalist system in the United States, it is generally the responsibility of state and local governments to improve and expand economic development. Therefore, in order to attract businesses, states will work to increase the potential profits of companies that are considering several location options. By improving their comparative advantage, states hope to attract firms and reap the benefits that these businesses bring. {continued}