ABSTRACT
In 1991 the American economist Michael E. Porter proposed that stringent environmental regulation (under the condition that it is efficient) can lead to win-win situations in which social welfare as well as the private net benefits of firms operating under such regulation can be increased (Porter 1991). It is obvious that production and consumption (in the case where improvements are product-related) becomes more sustainable if this is the case. Innovations play a pivotal role in this, since they are the mechanism that allows additional compliance to offset tightening environmental regulation. However, opponents of this Porter Hypothesis criticise the hidden assumption that firms systematically overlook opportunities for improving environmental quality that also increase their competitiveness or other private benefits. This debate is important for sustainable consumption and production (SCP) since it clarifies the scope of a business case for SCP.
