Drivers of environmental innovation - Vinnova

This approach, which is often called ”command and control”, remains the most
commonly used in environmental policy, although policy makers show
increasing interest in the economic instruments described below.
Regulatory instruments are sometimes enforced with financial penalties, with
the consequence that the boundary between regulatory and economic
instruments is blurred.
Economic instruments “can be defined as proxies for market signals in the form
of change to relative prices (through, for example, taxation of certain products)
and/or a financial transfer (for instance, a tax or a charge to be paid)” (Barde
and Opschoor, 1994). Subsidies and tradable permits are also included within
this group.
Communicative instruments. The third category of instruments, which is often
used in conjunction with regulatory or economic ones, includes those which
aim at internalising environmental awareness and responsibility into individual
decision-making by applying pressure, persuasion or stimulation either directly
or indirectly. This category includes approaches such as education, information
extension, training, social pressure, negotiation and other forms of “moral”
suasion. Voluntary agreements and network creation - match making - are also
included in this category.
The term “communicative instruments” highlights that these instruments are
based on interactive communication rather than one-way imperatives. The
difference may however be smaller than indicated by the name. For example,
there is usually interactive communication in the decision process proceeding
all instruments.
4.2 Regulatory instruments
Regulation 8
Regulations include among other things product standards, product bans,
technological specifications and take back-requirements.
The technological responses to regulation range from the diffusion of existing
technology, incremental changes to processes, product reformulation to
product substitution and the development of new processes. Kemp has
reviewed the literature relating to the impact of actual environmental
regulations on compliance innovation and clean technology. The most common
responses to regulation are incremental changes to processes and products and
the diffusion of existing technology (in the form of end-of-pipe solutions and
non-innovative substitutions of existing substances). Long before the
regulations are issued there is a search process for solutions to the problem,
8 Several authors use the term ”regulation” as a synonym for all regulatory instruments including
requirements, standards etc. Whereas others treat different types of regulatory instruments separately.
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