Abstract
The previous chapter analyzed the different drivers of and barriers to eco-innovation. In this chapter the aim is to identify those policy features and measures that can be implemented in order to help remove those barriers (or encourage the drivers) and enhance the uptake of eco-innovations. In order to do so, we have taken into account the theoretical and empirical literature on environmentally sound techno-institutional change, as well as certain policies currently implemented in the EU, the US and elsewhere.1 After justifying in section 4.2 why eco-innovation should be promoted publicly, section 4.3 outlines the policy approach to promote eco-innovations. Section 4.4 is devoted to the pinpointing of specific measures, whereas the following sections (4.5 and 4.6, respectively) discuss the most appropriate measures for tackling specific barriers to eco-innovation and how different types of eco-innovations are more likely to be promoted with different instruments. The chapter closes with some concluding remarks.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
Notes
For an overview of the aforementioned literature, see Del Río, P. (2002) Industry, Technological Change and Sustainable Development: Patterns Of Adoption of Cleaner Technologies in the Paper Industry, unpublished PhD thesis (in Spanish) (Madrid: Universidad Autónoma de Madrid);
and Del Río, P. (2008) ‘The empirical analysis of the determinants for environmental technological change: A research agenda’, Ecological Economics (forthcoming).
Before the introduction of an environmental policy, firms do not pay for the negative environmental externality they are responsible for and therefore the privately optimal level of pollution is above the socially optimal level (Johnstone, N. and Labonne, J. (2006) ‘Environmental policy, management and R&D’, OECD Economic Studies, No. 42, 2006/1).
On the other hand, industry tends to under-invest in research, development, and demonstration (RD&D) generally, compared to the societal returns of that RD&D (see Griliches, Z. (1992) ‘The Search for R&D Spillovers’, Scandinavian Journal of Economics, 94, 29–42).
Volleberg, H. (2007) ‘Differential Impact of Environmental Policy Instruments on Technological Change: A Review of the Empirical Literature’, TI 2007–042/3, Tinbergen Institute Discussion Paper (Amsterdam);
Del Río, P. (2007) ‘The empirical literature on the determinants for the adoption of sustainable technologies: An overview and lessons for future research’ in López, R. (ed.). Progress in Sustainable Development Research (New York: Nova Science Publishers), 37–71; Del Río (2008), op. cit.
Kneese, A.V. and Schulze, C. L. (1975) Pollution, Prices and Public Policy (Washington D.C.: Brookings).
Gunningham, N. (2007) ‘Reconfiguring environmental regulation: Next-generation policy instruments’ in Parto, S. and Herbert-Copley, B. (eds) Industrial Innovation and Environmental Regulation: Developing Workable Solutions (Tokyo: United Nations University Press), p. 202.
The neoclassical approach to technology policy is built on Arrow’s analysis of market failure (Arrow, K. J. (1962) ‘Economic welfare and the allocation of resources for invention’ in Nelson, R. (ed.) The Rate and Direction of Inventive Activity (Princeton: Princeton University Press), 609–625). According to this analysis, a completely competitive and decentralized market will provide a sub-optimal level of knowledge. This justifies public intervention either to create knowledge or to establish intellectual property rights. In neoclassical microeconomics a state with a welfare maximizing goal (under conditions of unbounded rationality) and perfect information on its environment and the consequences of its decisions, should be able to correct market failures efficiently and bring the economic system to a Pareto optimal equilibrium.
The role assigned to the state is therefore corrective in nature (Moreau, F. (1999) ‘The role of the State in an Evolutionary Microeconomics’, Working Paper du Laboratoire d’Econométrie no 99–1, Conservatoire National des Arts et Métiers, Paris, p. 5). The evolutionary approach to technological change suggests taking a broader view of technology policy than that put forward by the neoclassical approach. The fundamental difference lies in the fact that evolutionary economics is based on the assumption of a single stable equilibrium for the economic system. The existence of multiple alternative equilibriums gives a new rationale to the state’s intervention in the economy, in that coordination of the decisions by individual agents may be necessary in order to seek convergence between the particular and general interests.
In the evolutionary approach, the main question is not optimization and equilibrium, but endogenous change, evolution and economic development (Llerena, P. and Matt, M. (1999) ‘Inter-organizational collaborations: The theories and their policy implications’ in A. Gambardella and F. Malerba (eds) The Organization of Economic Innovation in Europe (Cambridge University Press), 179–201).
The focus of attention has ceased to be on the market failure per se and has become the improvement in competitive performance and the promotion of structural change (Mowery, D. and Rosenberg, N. (1989) ‘New developments in US technology policy: Implications for competitiveness and international trade policy’, California Management Review, 32, 107–124).
Thus, the role assigned to the State ceases to be corrective and becomes adaptive, insofar as it is more concerned with influencing the process than imposing a particular result (Metcalfe, J. S. (1995) ‘Technology systems and technology policy in an evolutionary framework’, Cambridge Journal of Economics, 19 (1), 25–46: p. 31).
Oosterhuis, F. (2006) ‘Innovation dynamics induced by environmental policy’, IVM Report E-07/05 (Amsterdam), p. 15.
Del Río, P. (2004) ‘Public policy and clean technology promotion: The synergy between environmental economics and evolutionary economics of technological change’, International Journal of Sustainable Development, 7 (2), 200–216.
Kivimaa, P. and Mickwitz, P. (2006) ‘The challenge of greening technologies: Environmental policy integration in Finnish technology policies’, Research Policy, 35, 729–744.
Kemp, R. (2007) ‘Integrating environmental and innovation policies’ in Parto and Herbert-Copley (2007), op. cit., 258–82.
Kemp, R. (2000) ‘Technology and Environmental Policy: Innovation effects of past policies and suggestions for improvement’, OECD, Paris; Del Río (2004), op. cit.
Norberg-Bohm, V. (1999) ‘Stimulating green technological innovation: An analysis of alternative policy mechanisms’, Policy Sciences, 32, p. 32.
Ashford, N. (1993) ‘Understanding Technological Responses of Industrial Firms to Environmental Problems: Implications for Government Policy’ in Fischer, K. and Schot, J. (eds). Environmental Strategies for Industry (Island Press), 277–307.
Von Hippel, E. (1988) The sources of innovation (New York: Oxford University Press).
See Taylor, M. R., Rubin, E. S. and Hounshell, D. (2005) ‘Control of SO2 Emission from Power Plants: A Case of Induced Technological Innovation in the U.S.’, Technological Forecasting and Social Change, 72 (6), 697–718.
Norberg-Bohm, V. (2000) ‘Technology Commercialization and Environmental Regulation: Lessons from the U.S. Energy Sector’ in J. Hemmelskamp, K. Rennings, and F. Leone (eds) Innovation-Oriented Environmental Regulation: Theoretical Approaches and Empirical Analysis (Heidelberg: Springer/Physica-Verlag), 193–220.
Del Río (2004, 2008), op. cit.; Jaffe, A. B., Newell, R. G. and Stavins, R. N. (2002). ‘Environmental policy and technological change’, Environment and Resource Economics, 22 (1–2), 41–69.
CCC (2006) ‘Clean, Clever and Competitive: Advice of the Eminent People Group’, http://cleanclevercompetitive.com/
BLUEPRINT (2003) ‘Blueprints for an Integration of Science, Technology and Environmental Policy’, STRATA Project, Contract Nr.: HPV1-CT-2001–00003, http://www.blueprintnetwork.net/
Frondel, M., Horbach, J. and Rennings, K. (2004) ‘End-of-Pipe or Cleaner Production? An Empirical Comparison of Environmental Innovation Decisions Across OECD Countries’, ZEW Discussion Paper No. 04–82, Mannheim, Centre for European Economic Research (ZEW).
This view that there is a ‘natural’ tendency for environmental technology to develop from abatement (end-of-pipe) to ‘integrated’ (clean) technologies is, however, challenged by Berkhout, F. (2005) ‘Technological Regimes, Environmental performance and innovation systems: Tracing the links’ in M. Weber and J. Hemmelskamp (eds) Towards Environmental Innovation Systems(Berlin: Springer), 57–80.
Kemp, R. (1997) Environmental Policy and Technical Change (Cheltenham, UK, and Brookfield, US: Edward Elgar), p. 241.
Godard, O. (1993) ‘Stratégies industrielles et conventions d’environment: De l’univers stabilise aux univers controversies’, Insee Méthodes, 39–40, 175–86.
The ‘Narrow window dilemma’, underlined by Paul A. David, highlights the briefness of the period during which a policy maker may pilot with success a dynamic economic system. In such a system, any delay in the implementation of public policy measures could prove fatal to the policy maker’s goals (David, P. A. (1987) ‘Some new standards for the economics of standardization in the information age’ in Dasgupta, P. and Stoneman, L. (eds) The Economic Theory of Technology Policy (London: Cambridge University Press).
Sartorius, C. (2008) ‘Promotion of stationary fuel cells on the basis of subjectively perceived barriers and drivers’, Journal of Cleaner Production, 16 (1), 171–180.
Ashford, N. (2005) ‘Government and environmental innovation in Europe and North America’ in Weber, M. and Hemmelskamp, J. (eds) Towards Environmental Innovation Systems (Berlin: Springer), 159–174.
Barton, J., Jenkins, R., Bartzokas, A., Hesselberg, J. and Knutsen, H. (2007) ‘Environmental regulation and industrial competitiveness in pollution-intensive industries’ in Parto and Herbert-Copley (2007), op. cit., p. 51.
Fukasaku, Y. (2005) ‘The need for environmental innovation indicators and data from a policy perspective’ in M. Weber and J. Hemmelskamp (eds) Towards Environmental Innovation Systems (Berlin: Springer), 251–267.
Malerba, F. (2002) ‘Sectoral systems of innovation and production’, Research Policy, 31 (2), 247–264.
Del Río (2002), op. cit.; Del Río, P. (2005) ‘Analysing the factors influencing clean technology adoption: a study of the Spanish pulp and paper industry’, Business Strategy and the Environment, 14, 20–37 Del Río (2008), op. cit.
Montalvo, C. (2003) ‘Sustainable production and consumption systems-cooperation for change–Assessing and simulating the willingness of the firm to adopt/develop cleaner technologies: The case of the In-Bond industry in northern Mexico’, Journal of Cleaner Production, 11, p. 421.
Jaenicke, M., Blazejczak, J., Edler, D. and Hemmelskamp, J. (2000) ‘Environmental Policy and Innovation: An International Comparison of Policy Frameworks and Innovation Effects’ in Hemmelskamp, J., Rennings, K. and Leone, F. (eds) Innovation-Oriented Environmental Regulation (Heidelberg: Physica Verlag), 125–152.
Requate, T. (2005) ‘Dynamic incentives by environmental policy instruments–a survey’ Ecological Economics, 54, 175–195.
See, among others: Ashford, N., Ayers, C. and Stone, F. (1985) ‘Using regulation to change the market for innovation’, Harvard Environmental Law Review, 9, 419–466; Ashford (2005), op. cit.;
Murphy, J. and Gouldson, A. (2000) ‘Environmental policy and industrial innovation: Integrating environmental and economy through ecological modernisation’, Geo forum, 31, 33–44;
Taylor, M. R., Rubin, E. S. and Hounshell, D. (2005) ‘Control of SO2 Emission from Power Plants: A Case of Induced Technological Innovation in the U.S.’, Technological Forecasting and Social Change, 72(6), 697–718; Kemp (2000), op. cit.; and Frondel, Horbach and Rennings (2004), op. cit. A notable exception is Montalvo (2003, op. cit.) who discovers that negative impacts on the willingness to develop clean technology from stringent environmental regulation can be expected.
Gunningham, N. (2007) ‘Reconfiguring environmental regulation: Next-generation policy instruments’ in Parto, S. and Herbert-Copley, B. (eds) Industrial Innovation and Environmental Regulation: Developing Workable Solutions (Tokyo: United Nations University Press), p. 218.
Van Soest, D. P. and Bulte, E. H. (2001) ‘Does the Energy-Efficiency Paradox Exist? Technological Progress and Uncertainty’, Environmental and Resource Economics, 18 (1), 101–112.
Bernauer, T., Engels, S., Kammerer, D. and Seijas, J. (2006) ‘Explaining Green Innovation–Ten Years after Porter’s Win-Win Proposition: How to Study the Effects of Regulation on Corporate Environmental Innovation?’, ETH Zurich, Center for Comparative and International Studies (Zurich).
COM (2004) ‘Stimulating Technologies for Sustainable Development: An Environmental Technologies Action Plan for the European Union’, http://eur-lex.europa.eu/LexUriServ/site/en/com/2004/com2004_0038en01.pdf
Calleja, I. and Delgado, L. (2004) ‘European Environmental Technologies Action Plan (ETAP)’, Journal of Cleaner Production, 16S1, 181–183.
Blazejczak, J. and Edler, D. (2000) ‘Elements of Innovation-friendly Policy Regimes: An International Comparative Study for the Paper Industry’ in Hemmelskamp, J., Rennings, K. and Leone, F. (eds) Innovation-oriented Environmental Regulation: Theoretical Approaches and Empirical Analysis (Heidelberg and New York: Physica Verlag), 175–192.
Clayton, A., Spinardi, G. and Williams, R. (1999) ‘Policies for cleaner technology. A new agenda for government and industry’, Earthscan, p. 27.
Wallace, D. (1995) ‘Environmental policy and industrial innovation’, Royal Institute of International Affair (London, U.K).
See for example: Roedliger-Schluga, T. (2004) ‘The Porter hypothesis and the economic consequences of environmental regulatio’ (Cheltenham, UK: Edward Elgar); Ashford (2005), op. cit.; Kemp (1997, 2007), op. cit.; Del Río (2008), op. cit.
Mazzanti, M. and Zoboli, R. (2006) ‘Economic instruments and induced innovation: the European policies on end-of-life vehicles’, Ecological Economics, 58(2), 318–337;
IPTS (2004) ‘Promoting environmental technologies: Sectoral analyses, barriers and measures’, Institute for Prospective Technological Studies, European Commission, Report EUR 21002 EN.
A recent special issue of the Journal Cleaner Production (2008, number 16) is devoted to ‘sustainability and supply chain management’. An overview is offered by Seuring, S. and Müller, M. (2008) ‘From a literature review to a conceptual framework for sustainable supply chain management’, Journal of Cleaner Production, 16(15), 1699–1710.
The originality of the paper by Mazzanti and Zoboli (2006, ‘Economic instruments and induced innovation: the European policies on end-of-life vehicles’, Ecological Economics, 58(2), 318–337) mainly lies in the analysis of the impact of environmental regulation on different stages of the supply chain of a product, where there are relationships between various manufacturing industries with different interests in innovation. IPTS (2004, op. cit.) also establishes that supply chains can play an important role in sectors where prices of raw materials are high and that in these sectors a higher degree of adoption of clean technologies can be expected. In addition, inter- and intra-trade across the supply chain and the power relations that it implies is an issue. The capacity to engage and influence suppliers of technologies, materials and other inputs is a strong determinant of innovation, particularly in industrial sectors close to large chains of retailing.
Yap, N., Devlin, J., Chao, C. and Ton, S. (2007) ‘Corporate environmental innovation and public policy: case studies from Taiwan’ in Parto and Herbert-Copley (2007), op. cit. According to these authors (p. 45), a corporate synergy system ‘is a mechanism though which a group of manufacturing companies work together to achieve certain production of management goals. It is established among firms linked by supply chains and usually consists of a central firm and its manufacturing suppliers or satellites’.
Graedel, H. and Allenby, B. (1995) Industrial Ecology (New Jersey: Prentice Hall); Norberg-Bohm (1999), op. cit.
Rothwell, R. (1992) ‘Industrial innovation and government environmental regulation’, Technovation, 12(7), 447–458; Norberg-Bohm (1999), op. cit.
OECD (1999) Technology and Environment: Towards Policy Integration (Paris: Organisation for Economic Co-operation and Development), p. 20.
Herbert-Copley, B. (2007) ‘To the limits… and beyond? Environmental regulation and innovation in the Canadian pulp and paper industry’ in Parto and Herbert-Copley (2007), op. cit., 115–137.
UNESCAP (2008) ‘The role of various environment-related measures’, http://www.unescap.org/drpad/vc/orientation/M5_3.htm, date accessed 16 November 2008.
Toffel, M. W. (2003) ‘Closing the loop: product take-back regulations and their strategic implications’, International Journal of Corporate Sustainability, 10 (9), 161–172.
Türpitz, K. (2003) ‘The determinants and effects of environmental product innovations’, Greening of Industry Network International Conference, October 12–15 (San Francisco).
See Driesen, D. (2003) ‘Does Emission Trading Encourage Innovation?’, Environmental Law Reporter, 33, 10094–10108; Kemp (2000), op. cit.
Yüksel, H. (2008) ‘An empirical evaluation of cleaner production practices in Turkey’, Journal of Cleaner Production, 16 (1), 50–57.
See Rennings, K., Ziegler, A., Ankele, K. and Hoffmann, E. (2006) ‘The influence of different characteristics of the EU enviromental management and auditing scheme on technical environmental innovation and economic performance’, Ecological Economics, 57 (1), 45–59;
and Rehfeld, K., Rennings, K. and Ziegler, A. (2007) ‘Integrated product policy and environmental product innovations: An empirical analysis’, Ecological Economics, 61 (1), 91–100.
Könnölä, T., Unruh, G. and Carrillo-Hermosilla, J. (2007) ‘Toward prospective voluntary agreements: reflections from a hydrogen foresight project’, Journal of Cleaner Production, 15 (3), pp. 259–265.
Andersen, P., Joergensen, B., Eerola, A., Koljonen, T., Loikkanen, T., and Eriksson, E. A. (2005) ‘Building the Nordic Research and Innovation Area in Hydrogen’, Summary Report, Nordic H2 Energy Foresight, http://www.h2foresight.info/ (home page), date accessed 25 November 2008.
Johnstone, N. and Labonne, J. (2006) ‘Environmental policy, management and R&D’, OECD Economic Studies No. 42, 2006 /1.
Carrillo-Hermosilla, J. (2004) ‘Technology and the environment: an evolutionary approach to sustainable technological change’, IE Business School Working Paper Series 02 /04.
Rotmans, J., Kemp, R. and van asselt, M. (2001) ‘More Evolution than Revolution: Transition Management in Public Policy’, Foresight, 3 (1), 15–31.
See, among others: Cleff, T. and Rennings, K. (2000) ‘Determinants of environmental product and process innovation: Evidence from the Mannheim Innovation Panel and a follow-up telephone survey’ in J. Hemmelskamp, F. Leone and K. Rennings (eds) Innovation-oriented Environmental Regulation: Theoretical Approaches and Empirical Analysis (Heidelberg: Physica Verlag), 331–347.
Author information
Authors and Affiliations
Copyright information
© 2009 Javier Carrillo-Hermosilla, Pablo del Río González & Totti Könnölä
About this chapter
Cite this chapter
Carrillo-Hermosilla, J., del González, P.R., Könnölä, T. (2009). Policy strategies to promote eco-innovation. In: Eco-Innovation. Palgrave Macmillan, London. https://doi.org/10.1057/9780230244856_4
Download citation
DOI: https://doi.org/10.1057/9780230244856_4
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-30019-8
Online ISBN: 978-0-230-24485-6
eBook Packages: Palgrave Business & Management CollectionBusiness and Management (R0)