China and other emerging economies which have strong manufacturing sectors could strengthen environmental laws without it affecting their overall share of export markets, the Organisation for Economic Cooperation and Development said in a new study.

Countries that implement stringent environmental policies do not lose export competitiveness when compared with countries which have more moderate regulations, according to the study.

"High pollution or energy-intensive industries like chemicals, plastics and steel making, whether in BRICS or in Europe or North America, would suffer a small disadvantage from a further tightening of regulations, but this would be compensated by growth in exports from less-polluting activities,” said OECD Chief Economist Catherine L.Mann, who presented the study at the London School of Economics.

She said environmental policies are not major driver of international trade patterns, adding the study found no evidence that a larger gap between the environmental policies of two given countries significantly affects their overall trade in manufactured goods.

"Government should stop working on assumption that tighter regulations will hurt their export share and focus on the edge they can get from innovation," Mann said.