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Clean technology — Innovation and environmental regulation

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  • Susse Georg
  • Inge Røpke
  • Ulrik Jørgensen

Abstract

The development and diffusion of clean technologies has an important role to play in preventing pollution. Government must address the issue of how firms can be given the necessary incentive to develop environmentally sound production techniques and products. This paper focus on how subsidies can — under certain restrictive conditions — stimulate innovation. Subsidization is usually assumed to involve unit subsidies for pollution reduction. Unit subsidies have little to do with the subsidy schemes in actual use. Our focus is on subsidy schemes specifically designed to promote the development of clean technologies through the use of grants/financial aid. Based on data from the development projects initiated through The Danish Clean Technology Programme we analyze how environmental innovations take place when the polluters, their suppliers and consultants are actively engaged in the development processes. The main merit of subsidy schemes like the Danish one is its direct focus on the innovation processes and the active incorporation of the network of firms surrounding the polluters. Our findings lead us to conclude that when it comes to subsidization, the role of government should be redefined. Government can act as a “matchmaker” by providing firms with informative incentives and necessary contacts for finding more efficient technological solutions to specific environmental problems. Copyright Kluwer Academic Publishers 1992

Suggested Citation

  • Susse Georg & Inge Røpke & Ulrik Jørgensen, 1992. "Clean technology — Innovation and environmental regulation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 2(6), pages 533-550, November.
    • Handle: RePEc:kap:enreec:v:2:y:1992:i:6:p:533-550
    DOI: 10.1007/BF00330282
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    References listed on IDEAS

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    1. Nelson, Richard R. & Winter, Sidney G., 1993. "In search of useful theory of innovation," Research Policy, Elsevier, vol. 22(2), pages 108-108, April.
    2. Giovanni Dosi & Christopher Freeman & Richard Nelson & Gerarld Silverberg & Luc Soete (ed.), 1988. "Technical Change and Economic Theory," LEM Book Series, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy, number dosietal-1988, March.
    3. Magat, Wesley A., 1978. "Pollution control and technological advance: A dynamic model of the firm," Journal of Environmental Economics and Management, Elsevier, vol. 5(1), pages 1-25, March.
    4. 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.
    5. Orr, Lloyd, 1976. "Incentive for Innovation as the Basis for Effluent Charge Strategy," American Economic Review, American Economic Association, vol. 66(2), pages 441-447, May.
    6. 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.
    7. Giovanni Dosi, 2000. "Sources, Procedures, and Microeconomic Effects of Innovation," Chapters, in: Innovation, Organization and Economic Dynamics, chapter 2, pages 63-114, Edward Elgar Publishing.
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    Cited by:

    1. Zylicz, Tomasz, 2010. "Goals and Principles of Environmental Policy," International Review of Environmental and Resource Economics, now publishers, vol. 3(4), pages 299-334, May.
    2. Jens Hemmelskamp, 1999. "The Influence of Environmental Policy on Innovative Behaviour: An Econometric Study," Working Papers 1999.18, Fondazione Eni Enrico Mattei.
    3. Hemmelskamp, Jens, 1998. "Der Einfluß der Umweltpolitik auf das Innovationsverhalten eine ökonometrische Untersuchung," ZEW Discussion Papers 98-23, ZEW - Leibniz Centre for European Economic Research.
    4. Kesidou, Effie & Demirel, Pelin, 2012. "On the drivers of eco-innovations: Empirical evidence from the UK," Research Policy, Elsevier, vol. 41(5), pages 862-870.
    5. Anthony Heyes & Catherine Liston-Heyes, 1997. "Regulatory ‘balancing’ and the efficiency of green R&D," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 9(4), pages 493-507, June.
    6. Hemmelskamp, Jens, 1996. "Environmental policy instruments and their effects on innovation," ZEW Discussion Papers 96-22, ZEW - Leibniz Centre for European Economic Research.

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