Drivers of environmental innovation - Vinnova

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Table 4 Summary of innovation effects of specific economic instruments Effects on innovations Theoretical pros & cons Recommendations Taxes • some effects on product and process innovation • search process also before implementation Charges - difficult to set rates Tradable permits + continuous incentives • unlimited time of permits Subsidies • limited effects (diffusion) • more effects than taxes (energy, diffusion) - difficult to set goals • devalued permits - may give entry barriers R&D subsidies + increase number of candidate solutions • when uncertainty about demand or solution hampers innovation • limited effects (R&D) • active match making for cooperative projects 4.4 Communicative instruments Voluntary agreements Voluntary agreements are undertakings made collectively by parts of industry, often when facing an implicit threat of compelling policy actions. The implicit threat blurs the boundary between voluntary agreements and compelling regulatory or economic instruments. 40
Kemp claims that the effectiveness of voluntary agreements is typically small. When environmental improvements were achieved, this was more due to autonomous technological change, external regulations and the evolution of market demand than to voluntary agreements. There is little evidence the voluntary agreements foster technological innovations (Kemp, Forthcoming). Integrated innovations may concern a wide range of actors, organisations, and technologies, since many problems are tackled on an international scale and require extensive co-operation between heterogeneous actors. The larger the number of actors and transformation stages and the higher the level of uncertainty, the greater is the need for the strong co-ordination of firms. Needing to act towards such an environmental threat with high uncertainty, pinpointing the general interest is not self-evident. It is not impossible to set targets, but problems lay in the fact that the targets must be recognised by all parties, who must also accept the risk that an initial error of orientation may occur and that the targets may be revised when new information comes to light. In such circumstances voluntary agreements may be justified, especially when they are devised from the start as schemes for learning and for monitoring innovation, and not as inviolable contracts. If stronger incentives are needed however, voluntary agreements could be complemented by the use of economic instruments (Aggeri, 1999). Other advantages and disadvantages of voluntary agreements are identified by Kemp. By handing over responsibility for achieving environmental improvements to industry, voluntary agreements may stimulate the environmental responsibility of firms. This is important for the wider integration of environmental concerns into the decisions taken by firms. On the other hand there is a risk of ”institutional capture” of policies by special interests. Voluntary agreements are attractive to regulatory bodies because they lower the administrative burden and establish a better, more co-operative relationship with business. However, the disadvantages with voluntary agreements is that they allow for free-rider behaviour, encourage firms to claim that is impossible to meet the targets and therefore lead to the underexploitation of innovation opportunities. They also offer little incentives for third-party suppliers to develop compliance technologies (Kemp, Forthcoming). It is necessary to draw up clear and transparent rules prior to the agreement. Voluntary agreements should include quantitative objectives, designation of responsibilities, know-how transfer rules, monitoring schemes, etc (Aggeri, 1999). Eco audits Eco Audits are required of firms in order for them to be certificated in accordance with some environmental management standards. Such standards can be implemented by law. They aim at facilitating environmental work within firms and communication about firms’ environmental work. 41
Page 1 and 2: Drivers of environmental innovation
Page 3 and 4: Drivers of environmental innovation
Page 5 and 6: Preface Innovations such as new pro
Page 7 and 8: Sammanfattning Denna rapport är en
Page 9 and 10: Övergången mot ett mer marknadsdr
Page 11 and 12: Summary This study aims to provide
Page 13 and 14: 1 Introduction ”7KH# RQO\# SDWK#
Page 15 and 16: But there are also problems with a
Page 17 and 18: 2 Environmental innovations in firm
Page 19 and 20: ”sustainable development is a key
Page 21 and 22: was in general no larger change in
Page 23 and 24: positive environmental effects alth
Page 25 and 26: That location also plays an importa
Page 27 and 28: adapted, with the latter indicating
Page 29 and 30: 4 Environmental policy instruments
Page 31 and 32: oth in the regulated industry and o
Page 33 and 34: Table 1 Summary of innovation effec
Page 35 and 36: marginal cost of abatement is lower
Page 37 and 38: according to Hemmelskamp (Forthcomi
Page 39: The Dutch studies looked for the pr
Page 43 and 44: Table 5 Summary of innovation effec
Page 45 and 46: There is clearly a need for more em
Page 47 and 48: conditions. These perspectives are
Page 49 and 50: This study shows that the way envir
Page 51 and 52: Hemmelskamp, J. (Forthcoming) “En
Page 54 and 55: Appendix 1 Theoretical approaches t
Page 56: and their interaction. It opens up
Page 59 and 60: efficiency nor on optimising within
Page 61 and 62: on the theory of terms of trade. A
Page 63 and 64: egulation may lead to increases in
Page 65 and 66: average productivity increases. Thi
Page 68: VINNOVA, SE-101 58 Stockholm, Swede

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