The Impact of Environmental Policies on Production Costs and Product Prices

Northeast Yucai Foreign Language School, Shenyang, 110179, China

^* Corresponding author: tianfangsu1@gmail.com

Abstract

This study delves into the multifaceted impacts of environmental policies on production costs and final product prices for businesses. Specifically, the implementation of environmental policies has significantly increased the direct costs for businesses, including investment in environmental protection equipment and the substitution costs incurred by using more expensive or scarce raw materials to meet environmental standards. At the same time, policies have also triggered a series of indirect costs, such as adjustments in the cost structure of upstream and downstream supply chains, as well as potential fluctuations in corporate reputation in the public’s mind, which deeply affect the long-term development strategy and planning of enterprises. It is worth noting that although environmental policies have brought challenges in the short term, they have also stimulated technological innovation, promoted positive adjustments in market structure, and opened up new development opportunities for enterprises that can respond flexibly. Looking ahead to the future, enterprises should actively embrace environmental policy guidance, explore sustainable development paths that achieve a win-win situation between economic benefits and environmental protection through continuous technological innovation and management optimization.