IDEAS home Printed from https://ideas.repec.org/p/zbw/zewdip/2887.html
   My bibliography  Save this paper

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

Author

Listed:
  • Frondel, Manuel
  • Horbach, Jens
  • Rennings, Klaus

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.

Suggested Citation

  • Frondel, Manuel & Horbach, Jens & Rennings, Klaus, 2004. "End-of-Pipe or Cleaner Production? An Empirical Comparison of Environmental Innovation Decisions Across OECD Countries," ZEW Discussion Papers 04-82, ZEW - Leibniz Centre for European Economic Research.
  • Handle: RePEc:zbw:zewdip:2887
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/24090/1/dp0482.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Rennings, Klaus & Beise, Marian, 2003. "Lead Markets of Environmental Innovations: A Framework for Innovation and Environmental Economics," ZEW Discussion Papers 03-01, ZEW - Leibniz Centre for European Economic Research.
    2. Harabi, Najib, 1997. "Determinanten des technischen Fortschritts auf Branchenebene: Ein Überblick," ZEW Discussion Papers 97-02, ZEW - Leibniz Centre for European Economic Research.
    3. 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.
    4. Klaus Rennings & Thomas Zwick, 2002. "Employment Impact Of Cleaner Production On The Firm Level: Empirical Evidence From A Survey In Five European Countries," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 6(03), pages 319-342.
    5. Carlo Carraro, 2001. "Environmental technological innovation and diffusion," Chapters, in: Henk Folmer & H. Landis Gabel & Shelby Gerking & Adam Rose (ed.), Frontiers of Environmental Economics, chapter 14, Edward Elgar Publishing.
    6. 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 - Leibniz Centre for European Economic Research.
    7. René Kemp & Xander Olsthoorn & Frans Oosterhuis & Harmen Verbruggen, 1992. "Supply and demand factors of Cleaner technologies: Some empirical evidence," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 2(6), pages 615-634, November.
    8. 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.
    9. Friedhelm Pfeiffer & Klaus Rennings, 2001. "Employment impacts of cleaner production – evidence from a German study using case studies and surveys," Business Strategy and the Environment, Wiley Blackwell, vol. 10(3), pages 161-175, May.
    10. Geroski, P A, 1990. "Innovation, Technological Opportunity, and Market Structure," Oxford Economic Papers, Oxford University Press, vol. 42(3), pages 586-602, July.
    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.
    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.
    13. 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.
    14. 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.
    15. Pavitt, Keith, 1984. "Sectoral patterns of technical change: Towards a taxonomy and a theory," Research Policy, Elsevier, vol. 13(6), pages 343-373, December.
    16. Jens Horbach, 2003. "Employment and Innovations in the Environmental Sector: Determinants and Econometrical Results for Germany," Working Papers 2003.47, Fondazione Eni Enrico Mattei.
    17. Fischer, Carolyn & Parry, Ian W. H. & Pizer, William A., 2003. "Instrument choice for environmental protection when technological innovation is endogenous," Journal of Environmental Economics and Management, Elsevier, vol. 45(3), pages 523-545, May.
    18. Rehfeld, Katharina-Maria & Rennings, Klaus & Ziegler, Andreas, 2007. "Integrated product policy and environmental product innovations: An empirical analysis," Ecological Economics, Elsevier, vol. 61(1), pages 91-100, February.
    19. 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.
    20. Rosenberg, Nathan, 1974. "Science, Invention and Economic Growth," Economic Journal, Royal Economic Society, vol. 84(333), pages 90-108, March.
    21. Adam Jaffe & Richard Newell & Robert Stavins, 2002. "Environmental Policy and Technological Change," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 22(1), pages 41-70, June.
    22. Czarnitzki, Dirk, 2002. "Research and development: financial constraints and the role of public funding for small and medium-sized enterprises," ZEW Discussion Papers 02-74, ZEW - Leibniz Centre for European Economic Research.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Vanessa OLTRA & Maïder SAINT JEAN, 2009. "Environmental Innovations and Industrial Dynamics (In French)," Cahiers du GREThA (2007-2019) 2009-22, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    2. Jens Horbach, 2006. "Determinants of Environmental Innovation – New Evidence from German Panel Data Sources," Working Papers 2006.13, Fondazione Eni Enrico Mattei.
    3. 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.
    4. Horbach, Jens, 2008. "Determinants of environmental innovation--New evidence from German panel data sources," Research Policy, Elsevier, vol. 37(1), pages 163-173, February.
    5. Horbach, Jens, 2006. "Determinants of Environmental Innovation - New Evidence from German Panel Data Sources," Climate Change Modelling and Policy Working Papers 12029, Fondazione Eni Enrico Mattei (FEEM).
    6. repec:zbw:rwidps:0015 is not listed on IDEAS
    7. Manuel Frondel & Jens Horbach & Klaus Rennings, 2004. "What Triggers Environmental Management and Innovation? – Empirical Evidence for Germany," RWI Discussion Papers 0015, Rheinisch-Westfälisches Institut für Wirtschaftsforschung.
    8. Borghesi, Simone & Cainelli, Giulio & Mazzanti, Massimiliano, 2015. "Linking emission trading to environmental innovation: Evidence from the Italian manufacturing industry," Research Policy, Elsevier, vol. 44(3), pages 669-683.
    9. Rennings, Klaus & Ziegler, Andreas & Ankele, Kathrin & Hoffmann, Esther, 2006. "The influence of different characteristics of the EU environmental management and auditing scheme on technical environmental innovations and economic performance," Ecological Economics, Elsevier, vol. 57(1), pages 45-59, April.
    10. Pinget, Amandine, 2016. "Spécificités des déterminants des innovations environnementales : une approche appliquée aux PME [Specificities of determinants for environmental innovation : an approach applied to SMEs]," MPRA Paper 80108, University Library of Munich, Germany.
    11. Vitaliy Roud & Thomas Wolfgang Thurner, 2018. "The Influence of State‐Ownership on Eco‐Innovations in Russian Manufacturing Firms," Journal of Industrial Ecology, Yale University, vol. 22(5), pages 1213-1227, October.
    12. Rennings, Klaus & Ziegler, Andreas, 2004. "Determinants of Environmental Innovations in Germany: Do Organizational Measures Matter? A Discrete Choice Analysis at the Firm Level," ZEW Discussion Papers 04-30, ZEW - Leibniz Centre for European Economic Research.
    13. Chassagnon, Virgile & Haned, Naciba, 2015. "The relevance of innovation leadership for environmental benefits: A firm-level empirical analysis on French firms," Technological Forecasting and Social Change, Elsevier, vol. 91(C), pages 194-207.
    14. Mazzanti, Massimiliano & Zoboli, Roberto, 2007. "Environmental Efficiency, Emission Trends and Labour Productivity: Trade-Off or Joint Dynamics? Empirical Evidence Using NAMEA Panel Data," Climate Change Modelling and Policy Working Papers 9320, Fondazione Eni Enrico Mattei (FEEM).
    15. Hongxiu Li & Horatiu Rus, 2018. "Water Innovation and Water Governance: Adaptive Responses to Regulatory Change and Extreme Weather Events," Working Papers 1801, University of Waterloo, Department of Economics, revised Jan 2018.
    16. Martin Larsson, 2017. "EU Emissions Trading: Policy-Induced Innovation, or Business as Usual? Findings from Company Case Studies in the Republic of Croatia," Working Papers 1705, The Institute of Economics, Zagreb.
    17. Tilmann Rave & Frank Goetzke & Mario Larch, 2011. "The Determinants of Environmental Innovations and Patenting: Germany Reconsidered," ifo Working Paper Series 97, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    18. Rehfeld, Katharina-Maria & Rennings, Klaus & Ziegler, Andreas, 2007. "Integrated product policy and environmental product innovations: An empirical analysis," Ecological Economics, Elsevier, vol. 61(1), pages 91-100, February.
    19. Ren, Shenggang & Hu, Yucai & Zheng, Jingjing & Wang, Yangjie, 2020. "Emissions trading and firm innovation: Evidence from a natural experiment in China," Technological Forecasting and Social Change, Elsevier, vol. 155(C).
    20. Perino, Grischa & Requate, Till, 2012. "Does more stringent environmental regulation induce or reduce technology adoption? When the rate of technology adoption is inverted U-shaped," Journal of Environmental Economics and Management, Elsevier, vol. 64(3), pages 456-467.
    21. Cameron Hepburn & Jacquelyn Pless & David Popp, 2018. "Policy Brief—Encouraging Innovation that Protects Environmental Systems: Five Policy Proposals," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 12(1), pages 154-169.

    More about this item

    Keywords

    Cleaner production; end-of-pipe-technologies; technological innovation; technological change; government policy; discrete choice models;
    All these keywords.

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:zewdip:2887. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/zemande.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.