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Int Econ Econ Policy (2010) 7:357–370 DOI 10.1007/s10368-010-0171-y ORIGINAL PAPER Eco-innovation for enabling resource efficiency and green growth: development of an analytical framework and preliminary analysis of industry and policy practices Tomoo Machiba Published online: 30 June 2010 # Springer-Verlag 2010 Abstract In order to meet great environmental challenges including climate change, more attention needs to be paid to innovation as a way to develop and realise sustainable solutions. This paper reviews the existing understanding of “eco-innovation” and proposes a framework that defines this concept from three aspects—target, mechanism and impact. The proposed framework is also applied to understand the evolution of corporate activities for sustainable production and analyse some good practices. Ecoinnovation activities are very diverse and are occurring at different levels and scales. Although the primary focus of corporate practices tends to be on technological advances, some advanced industry players have adopted complementary organisational or institutional changes such as new business models and alternative modes of provision. It is therefore essential to capture both incremental and systemic (or radical) types of eco-innovation unlike most empirical research in this area. 1 Introduction: green growth emerged as new policy crossroads In June 2009, the OECD Council Meeting at Ministerial Level (MCM) adopted a Declaration on Green Growth (OECD 2009a). The declaration invited the OECD to develop a Green Growth Strategy to achieve economic recovery and environmentally and socially sustainable economic growth. 1 The MCM Declaration broadly defines “green growth policies” as policies encouraging green investment in order to simultaneously contribute to economic recovery in the short term and help to build the environmentally friendly infrastructure required for a green economy in the long term. In terms of resource economics, such policies firstly need to guide industry to delink environmental degradation from economic or sales growth by reducing resource use per unit of value added (relative decoupling). At the same time, it would be essential to aim at further efforts towards achieving absolute reductions in the use of energy and materials to a sustainable level (absolute decoupling). 1 For the latest development on the OECD Green Growth Strategy, see www.oecd.org/greengrowth. T. Machiba (*) Senior Policy Analyst, Green Growth & Eco-innovation, Directorate for Science, Technology and Industry, OECD, 2 rue André-Pascal, Paris, 75775 Cedex 16, France
358 T. Machiba While industries are showing greater interest in sustainable production and are undertaking a number of corporate social responsibility (CSR) initiatives during the last decade, progress falls far short of meeting the pressing global challenges such as climate change, energy security and depletion of natural resources. Moreover, improvements in efficiency have often been offset by increasing consumption and outsourcing, while efficiency gains in some areas are outpaced by scale effects. Without new policy action, recent OECD analysis suggests that global greenhouse gas (GHG) emissions are likely to increase by 70% by 2050, whilst the G8 leaders agreed to aim for halving global emissions during the same period (OECD 2009b). The political and economic challenges for OECD countries are daunting. Incremental improvement is not enough to meet such challenges. Industry must be restructured and existing and breakthrough technologies must be more innovatively applied to realise green growth. The OECD Directorate for Science, Technology and Industry (DSTI) is thus aiming to contribute to the development of the OECD Green Growth Strategy from a viewpoint of promoting the role of innovation for realising green growth and has been conducting a project on Green Growth and Eco-innovation since 2008. 2 Raising efficiency in resource and energy use and engaging in a broad range of innovations to improve environmental performance will help to create new industries and jobs in coming years. The current economic crisis and negotiations to tackle climate change should be seen as an opportunity to shift to a greener economy. This paper presents part of the outcomes from the first phase of this OECD project, which took stock of the existing research and industry and policy practices and attempted to develop a conceptual framework for common understanding and further analysis. Firstly, the paper reviews the existing understanding of ecoinnovation and propose a framework that defines the concept from three aspects. Secondly, the framework is applied to understand the evolution of corporate activities for sustainable production and analyse some good practices. Lastly, the paper envisions the potential of diverse approaches of eco-innovation captured by the framework with a particular emphasis on the role of systemic or radical innovation, and concludes by outlining the next phase of the OECD project that is planned for further in-depth understanding an advanced policy support. 2 Defining the role of eco-innovation for green growth Much attention has recently been paid to innovation as a way for industry and policy makers to achieve more radical improvements in corporate environmental practices and performance. Many companies have started to use eco-innovation or similar terms to describe their contributions to sustainable development. A few governments are also promoting the concept as a way to meet sustainable development targets while keeping industry and the economy competitive. However, while the promotion of eco-innovation by industry and government involves the pursuit of both economic and environmental sustainability, the scope and application of the concept tend to differ. 2 For more details on the OECD project on Green Growth and Eco-innovation, see www.oecd.org/sti/ innovation/sustainablemanufacturing.
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