1. Introduction
Technological progress and the development of new knowledge are important drivers of economic growth and are a key factor in ensuring that the shift to environmentally sustainable growth happens at least cost to the economy. According to Kemp (2009), environmental innovation (eco-innovation) consists of new or modified processes, techniques, systems and products to avoid or reduce environmental damage. Environmental innovations "are not limited to innovation in products, processes, marketing methods and organisational methods, but also include innovation in social and institutional structures" (OECD, 2009, p. 13). Environmental innovations against general innovations may lead to economic and environmental benefits, the so-called
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Thus, the main difference between environmental and non-environmental innovations is that the environmental problem is associated with external costs that do not enter the private costs of the polluter, so that the polluter has no incentive to adopt or invest in new technologies more beneficial to the environment. In fact, while social costs would be reduced by such innovation, private costs would increase. Only when the external (social) cost is translated into private cost through a public policy that regulates the environmental externality will the cost structure become more incentive-compatible, thus improving the likelihood of environmental innovations.
Another important question in the study of eco-innovations is to understand the environmental innovators' behaviour and their incentives. In general, economic studies show that the major part of eco-innovation practices of firms come from environmental regulation, instead of technological innovation. Environmental regulation may change decisions about inputs and outputs by producers and consumers, which alter the sector and demand structure of the economy (Popp, 2006; Jorgenson et al.,
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The general innovation theory has enlarged with the analysis of the influence of environmental policy and institutional factors, classifying the determinants of eco-innovation in three broad categories supply side, demand side, and regulation and policy (Horbach and Rennings, 2007; Horbach, 2008; Oltra and Jean, 2005). Taking these different approaches as a departure point, and analysing the factors that motivate eco-innovation in energy firms, this paper contributes to the literature by pooling together insights from the innovation literature on eco-innovation and the environmental economics literature for explaining the drivers of eco-innovation.
The paper is structured as follows: in Section 2, we review the theoretical and empirical literature on eco-innovation and formulate the research hypotheses. Section 3 presents the data and explains the methodology that was applied. Section 4 presents the empirical results, while Section 5 discusses the findings and the policy implications of the
Although Maniates labels the “A” in IWAC as “meaningful consumption Alternatives,” his thoughts on the matter refer more to the institutional influences on product development. In Woodhouse’s words, “The public’s failure to embrace sustainable technologies has more to do with institutional structures that restrict the aggressive development and wide dissemination of sustainable technologies than with errant consumer choice” (48). Instead of attributing the lack of environmentally friendly products to happenstance, Maniates claims that there are production-side structural aspects which hinder the development of green products. Woodhouse mirrors Maniates in this aspect by recognizing the influences on engineers to overlook environmental concerns. “Neither law nor professional norms make [sustainable] design tasks a required aspect of most engineers’ responsibilities, and most employers place substantial obstacles in the way of engineers taking those design elements farther than law and market competition require” (27). By and large, companies are driven by the desire to maximize profit above all else, and from the perspective of employers, adding in environmental concerns is merely an additional constraint on potential profit margins. If engineering ethics and government regulations are sufficiently detailed on sustainability, then employers
The new mechanism = the crowd instead of the old centralized organizations plus the new driver = the quality instead of profit eventually leads to a new highly participatory society redefining our own relationship to the environment.
The author gives reliable examples, facts, estimates and statistics, which make his arguments to be based on logical reasoning. For instance, according to Andrew Revkin, European countries are using a cap-and-trade system that is effective in imposing charges on carbon. Also coal-burning plants are being shut in China. However, he believes that charging on emission is not a radical idea and the charge will not have any effect on American competitiveness.
As the firms have to pay extra costs of what they produce and emit, they have to clearly bring sustainability as the main target of their businesses in order to reduce their emissions. Not doing so, will drop the profits in their business as they have to pay the price for extra emitted carbon. Further it will bring down their reputation from those companies in the market whose carbon labelling will be better. Thus they will have no choice but to take actions. They have to bring sustainability to the core target of their firm. On other hand, it would engage the thoughtful attention of every household and enterprise to the effort to reduce emissions.[6] (Repetto, Cap and Trade is Better Climate Policy than a Carbon Tax, 2013) Each emitter, direct or indirect, would face higher prices for fossil-based energy and for energy intensive goods and services. Each one would then be motivated to find ways to minimize those cost increases in the least onerous way. All the resourcefulness and creativity that the economy and population can muster would be engaged in the effort, not because of environmental commitment or citizenship but because of economic self-interest. Although a large majority of Americans believes that greenhouse gases should be reduced, that alone has not been enough to motivate their actions on nearly the scale required. Values must be supported by economic self interest which is present in the cap and trade policy.
...nges that may have once been a regulation, but that still effects the environment. Other larger plants and companies are beginning to change the way that they take care of certain waste products because they have been brought into the public light and some groups have begun to campaign against the larger companies that are dealing with the regulations. The environmental push that is being created is affected by the ‘race to the bottom” even though regulations may be decreased the problem is already out in the public so it seems that since there used to be such stringent laws. The increased competition that can be created by the companies which are similar plays into interest groups. State policies are changing the way that larger companies are dealing with the environment as well as aiding in the improving the environment after there has been major damage done.
This case focuses on corporate obstacles to pollution prevention. Pollution prevention can complex especially for large corporations. There are many different forms of pollution prevention including emissions control devices and incremental changes in existing technology. The author reviews the impact of emissions controlled devices, however the focus of the case study is on incremental changes in existing technology. Incremental changes include substituting one or two steps in a production process or relationship changes between production steps. One example of incremental changes that was provided by the author was eliminating chlorofluorocarbons and saving energy by replacing a refrigeration process with a heath exchanger that can exploit waste cooling from another part of the process. There are three critical decision-making stages for incremental changes; identifying a pollution prevention opportunity, finding a solution appropriate to that opportunity, and implementing that solution. The author discusses the three aspects of an organization (culture, ability to process information, and its politics) and how they impact the decision-making stages.
A number of EU members have implemented environmental tax reforms (ETRs) which are defined as a reform of the national tax system that shift the tax burden from taxation of labor to taxation of carbon-energy, and the reforms were first introduced in Scandinavian countries since 1990 and then applied in other European countries, such as, Germany and Britain (PTAK, 2010; COMETR, 2007). This project summarizes an assessment of the German ETR and its effect on technological innovation by trying to answer the research question: Did the German ETR increase technological innovation? The question is motivated by general environmental considerations, for instance, slowing down the global warming by reducing energy consumptions and carbon emissions. My paper’s aim is to assess the effect of the German ERTs on technology innovation level specifically, and this is motivated by the following relevant facts. The German ETR was launched in April 1999, and it has been adopted in Germany for more than ten years; thus, there are plenty of available data for us to assess the impacts of this ETR regarding to German government’s motivations. This ETR was proposed because the German government wanted to increase technology innovation, to create additional jobs, and to decrease energy consumption (Agnolucci, 2009; Beuermann and Santarius, 2006). Moreover, it is important for us to assess the impacts of ETRs from different angles, for example, the level of technology innovation, rather than assessing the impacts on the level of energy consumption and employment that abundant papers have discussed. The rest of the paper is organized as follows. Section 2 presents a literature review of the related literature ...
What is the impact of environmental regulations on the US economy? The general belief is that these environmental regulations would raise production cost, reduce production output, and lead to unemployment. These effects would reduce competitiveness both domestically and abroad, as well as, increase the national deficit. In a static business environment that might be true, but we do not work and trade in a static environment and isolating one such regulatory process to determine economic success or failure is a tough challenge primarily due to the lack of controls when testing the economic effects.
Important companies like Shell, DuPont, BP has been reorganised to generate profits from this green market of goods and services. In this sense, it may sound altruistic, "the sustainability", the logic of profitability and competition is what will determine the ability of companies of the future to meet the changing needs of consumers.
What is the socially optimum level of production keeping in mind the environment? How should it be achieved? It is at this point that the great economic minds of out time begin to take up arms. Michael Porter, a Professor of Business at the Harvard Business School claims that environmental regulation of businesses will actually give the businesses a competitive advantage over their counterparts in nations with less stringent regulation because it forces them to innovate. Porter claims that by changing their production processes, the businesses will actually lower their production costs (Porter, 97).
In traditional opinions, environmental protection and economic growth are mutually contradictory. Economic growth is a high environmental cost, and protecting the environment will limit the economic growth. The reason of contradiction stems from the inappropriate understandings among development, economic growth and environmental protection. In fact, economic growth could have a harmonious relationship with environmental protection.
Ayres (2008) advances the concept of ‘sustainability economics’, which deals with the issue of maintaining economic growth while paying special attention to environmental concerns of energy utilization and resource exhaustion, especially carbon fuel consumption and its relation to climate change.
Bode, H. (2005). Sustainable Development and Innovation in the Energy Sector. New York: Amherst International.
Regulations provide the baseline environmental standards that industry is required to follow. Without environmental regulations, industry would not be able to meet the same standards by themselves. Environmental regulations may not always be in the best interest of the industry due to their costly and sometimes prohibitive nature. In response to these concerns, the establishment of incentive programs increases the likelihood of industry complying with and potentially exceeding the minimum environmental standard. Incentive programs motivate industry to meet and exceed environmental standards by allowing them to benefit financially by aiming for higher than regulation
Climate Change and Sustainable Development This research paper is about climate change with the concept of sustainable development, meaning that it will approach the climate change problem in an economical way and try to solve it with the new growth theory. New growth theory argues that innovations, population growth, new technology, and creative destruction are connected to each other and that these connections will solve the climate change problem. The exponential technology growth, improved international private rights and improved use of human capital are some of those key terms that the theory is all about. The most important thing towards the solution is human capital.