Hankyung Research Institute "Excessive Environmental Regulations Lead to Product Price Increases and Consumer Burden"

Survey Results on Corporate Perceptions of Environmental Regulations

[Asia Economy Reporter Dongwoo Lee] A survey has revealed that excessive environmental regulations increase production costs and product prices, ultimately weakening corporate competitiveness and burdening consumers. There is a call for reasonable regulations that align with reality.

The Korea Economic Research Institute announced on the 8th that, based on a survey of the top 600 companies by sales, 87.2% of the surveyed companies reported being affected by environmental regulations in their management, and 60.2% responded that strengthened environmental regulations lead to increased production costs and product prices.

The environmental regulations that companies find most burdensome are ▲air-related regulations such as the Emissions Trading Act (38.6%) ▲chemical substance regulations such as the Chemical Substances Registration and Evaluation Act and the Chemical Substances Control Act (31.3%) ▲waste and resource circulation-related regulations such as the Waste Management Act and the Framework Act on Resource Circulation (17.3%).

82.7% of companies responded that environmental regulations in the 20th National Assembly have been further strengthened compared to the 19th National Assembly. The reasons for perceiving stronger environmental regulations than before include strengthened regulatory standards and expanded regulatory targets and scope (40.4%), an increase in newly enacted bills (26.0%), and strengthened administrative sanctions such as burdens and fines (15.9%). Among these, 72.8% answered that the strengthened environmental regulations have impacted production costs and product price increases.

Meanwhile, 72.9% of companies expect environmental regulations to be further strengthened in the 21st National Assembly compared to the 20th National Assembly.

Companies cited the main difficulties with environmental regulations as ▲ideal regulatory standards that are disconnected from implementation capacity and corporate realities (51.9%) ▲possibility of legal violations due to ambiguous detailed guidelines (36.8%) ▲administrative burdens such as frequent inspections and requests for data submission (33.1%).

The environmental regulatory policy directions that companies hope for from the 21st National Assembly and the government include reflecting practical industry opinions during the enactment and revision of laws (30.5%), setting regulatory standards considering implementation capacity and corporate realities (27.2%), and providing sufficient adaptation periods when introducing new regulations (25.6%).

Choo Kwang-ho, Director of Economic Policy at the Korea Economic Research Institute, said, "Excessive environmental regulations that do not fit reality not only hinder corporate vitality but also negatively affect consumer benefits. The 21st National Assembly, which has taken on the challenge of overcoming the COVID-19 crisis, should minimize burdens on companies and consumers through reasonable regulations that align with reality."

Meanwhile, this survey was conducted by Research & Research from the 6th to the 21st of last month, with 133 companies responding. The sampling error is ±7.5% at a 95% confidence level.

This content was produced with the assistance of AI translation services.