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End-of-Pipe or Cleaner Production? : An Empirical Comparison of Environmental Innovation Decisions Across OECD Countries

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Author Info
Frondel, Manuel
Horbach, Jens
Rennings, Klaus

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Abstract

While both fundamental types of abatement measures mitigate the adverse environmental impacts of production, cleaner production technologies are frequently more advantageous than end-of-pipe technologies for environmental and economic reasons. This paper analyzes a variety of factors that might enhance firms? propensity to implement cleaner products and production technologies instead of end-of-pipe technologies. On the basis of a unique facility-level data set derived from a recent OECD survey, we find a clear dominance of cleaner production in seven OECD countries: Surprisingly, 76.8% of the facilities report that they invest predominantly in cleaner production technologies. With regard to environmental product innovations, the large majority of facilities reports that the measures they have undertaken to reduce environmental impacts were geared at production processes and not so much at products. Our estimation results are based on multinomial logit models which indicate that regulatory measures and the stringency of environmental policies are positively correlated with end-of-pipe technologies, while cost savings, general management systems, and specific environmental management tools tend to favor clean production. We conclude that improvements towards cleaner products and production may be reached by the continuous development and wider diffusion of these management tools. Improvements may also be stimulated by widening the cost gap between the two types of technologies, for instance, by additionally charging for waste and energy use. --

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Publisher Info
Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 04-82.

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Date of creation: 2004
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Handle: RePEc:zbw:zewdip:2887

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Related research
Keywords: Cleaner production; end-of-pipe-technologies; technological innovation; technological change; government policy; discrete choice models;

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Find related papers by JEL classification:
O33 - Economic Development, Technological Change, and Growth - - Technological Change - - - Technological Change: Choices and Consequences; Diffusion Processes
C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models
Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
O38 - Economic Development, Technological Change, and Growth - - Technological Change - - - Government Policy

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Rennings, Klaus & Beise, Marian, 2003. "Lead Markets of Environmental Innovations : A Framework for Innovation and Environmental Economics," ZEW Discussion Papers 03-01, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  2. Adam B. Jaffe & Karen Palmer, 1997. "Environmental Regulation And Innovation: A Panel Data Study," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 610-619, November. [Downloadable!] (restricted)
    Other versions:
  3. Frondel, Manuel & Horbach, Jens & Rennings, Klaus & Requate, Till, 2004. "Environmental Policy Tools and Firm-Level Management Practices : Empirical Evidence for Germany," Economics Working Papers 2004,02, Christian-Albrechts-University of Kiel, Department of Economics. [Downloadable!]
  4. Adam Jaffe & Richard Newell & Robert Stavins, 2002. "Environmental Policy and Technological Change," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 22(1), pages 41-70, June. [Downloadable!] (restricted)
  5. Parry, Ian & Pizer, William & Fischer, Carolyn, 1998. "Instrument Choice for Environmental Protection When Technological Innovation is Endogenous," Discussion Papers dp-99-04, Resources For the Future. [Downloadable!]
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  6. Frondel, Manuel & Horbach, Jens & Rennings, Klaus, 2008. "What triggers environmental management and innovation? Empirical evidence for Germany," Ecological Economics, Elsevier, vol. 66(1), pages 153-160, May. [Downloadable!] (restricted)
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  7. Geroski, P A, 1990. "Innovation, Technological Opportunity, and Market Structure," Oxford Economic Papers, Oxford University Press, vol. 42(3), pages 586-602, July. [Downloadable!] (restricted)
  8. Harabi, Najib, 1997. "Determinanten des technischen Fortschritts auf Branchenebene: ein Überblick," ZEW Discussion Papers 97-02, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  9. Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters, in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626 National Bureau of Economic Research, Inc. [Downloadable!]
  10. Rennings, Klaus & Zwick, Thomas, 2001. "The employment impact of cleaner production on the firm level : empirical evidence from a survey in five European countries," ZEW Discussion Papers 01-08, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  11. Brunnermeier, Smita B. & Cohen, Mark A., 2003. "Determinants of environmental innovation in US manufacturing industries," Journal of Environmental Economics and Management, Elsevier, vol. 45(2), pages 278-293, March. [Downloadable!] (restricted)
  12. Milliman, Scott R. & Prince, Raymond, 1989. "Firm incentives to promote technological change in pollution control," Journal of Environmental Economics and Management, Elsevier, vol. 17(3), pages 247-265, November. [Downloadable!] (restricted)
  13. Downing, Paul B. & White, Lawrence J., 1986. "Innovation in pollution control," Journal of Environmental Economics and Management, Elsevier, vol. 13(1), pages 18-29, March. [Downloadable!] (restricted)
  14. Jens Horbach, 2003. "Employment and Innovations in the Environmental Sector: Determinants and Econometrical Results for Germany," Working Papers 2003.47, Fondazione Eni Enrico Mattei. [Downloadable!]
  15. Peters, Bettina & Lööf, Hans & Janz, Norbert, 2003. "Firm Level Innovation and Productivity : Is there a Common Story Across Countries?," ZEW Discussion Papers 03-26, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Hammar, Henrik & Löfgren, Åsa, 2007. "Explaining adoption of end of pipe solutions and clean technologies," Working Paper 102, National Institute of Economic Research. [Downloadable!]
  2. Madhu Khanna & George Deltas & Donna Harrington, 2009. "Adoption of Pollution Prevention Techniques: The Role of Management Systems and Regulatory Pressures," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 44(1), pages 85-106, September. [Downloadable!] (restricted)
  3. Paul Lanoie & Jérémy Laurent-Lucchetti & Nick Johnstone & Stefan Ambec, 2007. "Environmental Policy, Innovation and Performance : New Insights on the Porter Hypothesis," Cahiers de recherche 07-06, HEC Montréal, Institut d'économie appliquée. [Downloadable!]
    Other versions:
  4. Vanessa OLTRA (GREThA UMR CNRS 5113), 2008. "Environmental innovation and industrial dynamics: the contributions of evolutionary economics," Cahiers du GREThA 2008-28, Groupe de Recherche en Economie Théorique et Appliquée. [Downloadable!]
  5. Arundel, Anthony & Kemp, Rene, 2009. "Measuring Eco-Innovation," UNU-MERIT Working Paper Series 017, United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology. [Downloadable!]
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