Environment as a factor of national competitiveness in manufacturing

Abstract

This paper examines the changes in environmental quality that have occurred in Slovenia’s economic transition using estimates and projections of pollution levels and natural resources content of manufacturing goods exports for the period 1992–2006. The empirical questions addressed are two. The first is whether the transition from a centrally planned to a market-driven economy exacerbates environmental degradation, or instead encourages environmental improvement. The second question under study is whether the export growth projected in the Strategy of Economic Development for Slovenia is compatible with environmental sustain-ability. The study used export structure data and calculated relative changes in environmental pressures using international databases that link industrial structure with pollution emissions and use of natural resources. We found that in the early phase of transition (1992 to 1998), there was a clear decoupling between export patterns and environmental pressure. After 1998, this trend is no longer clear. Moreover, analysis of export projections show that pollution emissions linked to exports would increase by 22% between 2000 and 2006 while the natural resource intensity of goods exports would fall by 0.7 structural points. Based on these results, in particular rising pollution emissions, we conclude that there is a conflict between the Slovene Strategy’s stated goal of sustainability on the one hand and the increasing environmental burden of exports on the other.