Foreign direct investment and the environment

rdf:langString Foreign direct investment and the environment

rdf:langString Foreign direct investment and the environment involves international businesses and their interactions and impact on the natural world. These interactions can be observed through the stringency applied to foreign direct investment policy and the responsiveness of capital or labor incentive for investment inflows. The laws and regulations created by a country that focuses on environmental regimes can directly impact the levels of competition involving foreign direct investment they are exposed to. Fiscal and financial incentives stemming from ecological motivators, such as carbon taxation, are methods used based on the desired outcome within a country in order to attract foreign direct investment. External funding sources that come from foreign direct investment stimulates the increase of innovative ideas surrounding technological advances while it also holds the potential to decrease unemployment. When financial and fiscal motives are combined with environmental consciousness, the promotion of green and sustainable innovations increases. Such environmental consciousness can result in the decrease of industrial pollutants, which contributes to infant mortality and other health issues. Policies created that attract innovative and environmentally conscious technological advancements have been stated as a great way to encourage increase in the abundance of environmentally friendly foreign direct investments. The Organization for Economic Co-operation and Development promotes policies that can have positive social and economic impacts. Foreign direct investment does have the potential in initiating negative effects on countries as well. Foreign direct investments allow for the chance of compromise and collaboration between policies of negotiating countries, which brings the opportunity for new perspectives on green innovation. However, intensifying regulations around production costs, such as environmental effect, can decrease the attraction of foreign direct investment to that country. Businesses or governments may wish to negotiate with a country with less complicated policies, therefore decreasing a country's competitive edge on the international market.