Drivers of environmental innovation - Vinnova

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.
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