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Environmental and Climate Innovation: Limitations, Prices and Policies

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  • Jeroen C.J.M. van den Bergh

Abstract

There is currently much hope about environmental innovation and green technologies, notably as a response to the threat of climate change. This paper offers a critical perspective on the role of technological innovation to solving environmental problems, based on considering empirical economic studies, energy and environmental rebound, the energy return on energy investment (EROEI) of alternative energy technologies, and various crowding out effects. Features of green technologies and motives of green innovators are briefly discussed. This is followed by an examination of the desirable mix of environmental and innovation policies to stimulate environmental innovation, to escape current and to evade early new lock-ins, and to avoid the occurrence of a “green paradox”. This involves an evaluation of specific policy instruments from an environmental innovation angle. An extended argument is offered to clarify that environmental (CO2) pricing is crucial – even though insufficient – for environmental innovation to deliver definite solutions. In other words, environmental innovation (policy) is no substitute for environmental regulation (through prices). The paper also discusses the importance for environmental innovation of international agreements for regulation of greenhouse gas emissions and international coordination of innovation efforts.

Suggested Citation

  • Jeroen C.J.M. van den Bergh, 2011. "Environmental and Climate Innovation: Limitations, Prices and Policies," Papers on Economics and Evolution 2010-23, Philipps University Marburg, Department of Geography.
    • Handle: RePEc:esi:evopap:2010-23
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    References listed on IDEAS

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    1. D. W. Jorgenson & Z. Griliches, 1967. "The Explanation of Productivity Change," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 34(3), pages 249-283.
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    3. van den Bergh, Jeroen C.J.M., 2008. "Optimal diversity: Increasing returns versus recombinant innovation," Journal of Economic Behavior & Organization, Elsevier, vol. 68(3-4), pages 565-580, December.
    4. Jeroen Bergh, 2011. "Energy Conservation More Effective With Rebound Policy," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 48(1), pages 43-58, January.
    5. van den Bergh, Jeroen C.J.M., 2008. "Environmental regulation of households: An empirical review of economic and psychological factors," Ecological Economics, Elsevier, vol. 66(4), pages 559-574, July.
    6. Jeroen C. J. M. van den Bergh & John M. Gowdy, 2003. "The microfoundations of macroeconomics: an evolutionary perspective," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 27(1), pages 65-84, January.
    7. van den Heuvel, Stijn T.A. & van den Bergh, Jeroen C.J.M., 2009. "Multilevel assessment of diversity, innovation and selection in the solar photovoltaic industry," Structural Change and Economic Dynamics, Elsevier, vol. 20(1), pages 50-60, March.
    8. 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).
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    Cited by:

    1. Paul Ekins, 2012. "Sustainable growth revisited: technology, economics and policy," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 24(2), pages 59-77, June.

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    Keywords

    climate change; environmental regulation; EROEI; green paradox; rebound; sustainability transition; technological diversity Length 25 pages;
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