IDEAS home Printed from https://ideas.repec.org/p/srt/wpaper/2714.html
   My bibliography  Save this paper

Linking emission trading to environmental innovation: evidence from the Italian manufacturing industry

Author

Listed:
  • Simone Borghesi

    () (University of Siena, Italy.)

  • Giulio Cainelli

    () (University of Padova, Italy.)

  • Massimiliano Mazzanti

    () (University of Ferrara, Italy; SEEDS, Ferrara, Italy.)

Abstract

This paper examines the different forces underlying the adoption of environmental innovations (EI), with a focus on policy related EI. In particular, exploiting the 2006-2008 wave of the Italian Community Innovation Survey (CIS), we investigate whether the first phase of the European Emissions Trading Scheme (EU-ETS) exerted some effects on EI in CO2 abatement and energy efficiency controlling for other variables, grouped as internal/external to the firm, and additional environmental regulation factors. Our empirical analyses show that a few factors emerge as particularly relevant such as relationships with other firms and institutions, sectoral energy expenditure intensity, and current and future expected environmental regulation. For the specific role of the EU ETS, we find that, on the one hand ETS sectors are more likely to innovate than non-ETS sectors but on the other hand that sector specific policy stringency is negatively associated with EI, possibly due to anticipatory behavior from early moving innovative firms and some sector idiosyncratic factors.

Suggested Citation

  • Simone Borghesi & Giulio Cainelli & Massimiliano Mazzanti, 2014. "Linking emission trading to environmental innovation: evidence from the Italian manufacturing industry," SEEDS Working Papers 2714, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Oct 2014.
  • Handle: RePEc:srt:wpaper:2714
    as

    Download full text from publisher

    File URL: http://www.sustainability-seeds.org/papers/RePec/srt/wpaper/2714.pdf
    File Function: First version, 2014
    Download Restriction: no

    File URL: http://www.sustainability-seeds.org/papers/RePec/srt/wpaper/2714.pdf
    File Function: Revised version, 2014
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Simone Borghesi, 2011. "The European emission trading scheme and renewable energy policies: credible targets for incredible results?," International Journal of Sustainable Economy, Inderscience Enterprises Ltd, vol. 3(3), pages 312-327.
    2. Lori D. Snyder & Nolan H. Miller & Robert N. Stavins, 2003. "The Effects of Environmental Regulation on Technology Diffusion: The Case of Chlorine Manufacturing," American Economic Review, American Economic Association, vol. 93(2), pages 431-435, May.
    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.
    4. Arimura, Toshi H. & Hibiki, Akira & Katayama, Hajime, 2008. "Is a voluntary approach an effective environmental policy instrument?: A case for environmental management systems," Journal of Environmental Economics and Management, Elsevier, vol. 55(3), pages 281-295, May.
    5. Walsh, Vivien, 1984. "Invention and innovation in the chemical industry: Demand-pull or discovery-push?," Research Policy, Elsevier, vol. 13(4), pages 211-234, August.
    6. Raphael Calel & Antoine Dechezleprêtre, 2016. "Environmental Policy and Directed Technological Change: Evidence from the European Carbon Market," The Review of Economics and Statistics, MIT Press, vol. 98(1), pages 173-191, March.
    7. Yang, Chih-Hai & Tseng, Yu-Hsuan & Chen, Chiang-Ping, 2012. "Environmental regulations, induced R&D, and productivity: Evidence from Taiwan's manufacturing industries," Resource and Energy Economics, Elsevier, vol. 34(4), pages 514-532.
    8. Horbach, Jens & Rammer, Christian & Rennings, Klaus, 2012. "Determinants of eco-innovations by type of environmental impact — The role of regulatory push/pull, technology push and market pull," Ecological Economics, Elsevier, vol. 78(C), pages 112-122.
    9. Popp, David & Newell, Richard G. & Jaffe, Adam B., 2010. "Energy, the Environment, and Technological Change," Handbook of the Economics of Innovation, Elsevier.
    10. Ellerman,A. Denny & Convery,Frank J. & de Perthuis,Christian, 2010. "Pricing Carbon," Cambridge Books, Cambridge University Press, number 9780521196475.
    11. Wagner, Marcus, 2007. "On the relationship between environmental management, environmental innovation and patenting: Evidence from German manufacturing firms," Research Policy, Elsevier, vol. 36(10), pages 1587-1602, December.
    12. 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.
    13. Pavitt, Keith, 1984. "Sectoral patterns of technical change: Towards a taxonomy and a theory," Research Policy, Elsevier, vol. 13(6), pages 343-373, December.
    14. Marius-Cristian Frunza & Dominique Guegan & Fabrice Thiebaut, 2010. "Missing trader fraud on the emissions market," Documents de travail du Centre d'Economie de la Sorbonne 10071, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    15. Paul Lanoie & Jérémy Laurent‐Lucchetti & Nick Johnstone & Stefan Ambec, 2011. "Environmental Policy, Innovation and Performance: New Insights on the Porter Hypothesis," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 20(3), pages 803-842, September.
    16. Claire Brunel & Arik Levinson, 2013. "Measuring Environmental Regulatory Stringency," Working Papers gueconwpa~13-13-02, Georgetown University, Department of Economics.
    17. Rennings, Klaus, 2000. "Redefining innovation -- eco-innovation research and the contribution from ecological economics," Ecological Economics, Elsevier, vol. 32(2), pages 319-332, February.
    18. Snyder, Lori D. & Miller, Nolan & Stavins, Robert N., 2003. "The Effects of Environmental Regulation On Technology Diffusion: The Case of Chlorine Manufacturing," Discussion Papers 10554, Resources for the Future.
    19. Ghisetti, Claudia & Rennings, Klaus, 2013. "Environmental innovations and profitability: How does it pay to be green? An empirical analysis on the German innovation survey," ZEW Discussion Papers 13-073, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    20. Jos Sijm, 2005. "The interaction between the EU emissions trading scheme and national energy policies," Climate Policy, Taylor & Francis Journals, vol. 5(1), pages 79-96, January.
    21. 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.
    22. Antonioli, Davide & Mancinelli, Susanna & Mazzanti, Massimiliano, 2013. "Is environmental innovation embedded within high-performance organisational changes? The role of human resource management and complementarity in green business strategies," Research Policy, Elsevier, vol. 42(4), pages 975-988.
    23. Rogge, Karoline S. & Hoffmann, Volker H., 2010. "The impact of the EU ETS on the sectoral innovation system for power generation technologies - Findings for Germany," Energy Policy, Elsevier, vol. 38(12), pages 7639-7652, December.
    24. Popp, David, 2006. "International innovation and diffusion of air pollution control technologies: the effects of NOX and SO2 regulation in the US, Japan, and Germany," Journal of Environmental Economics and Management, Elsevier, vol. 51(1), pages 46-71, January.
    25. Kleinknecht, Alfred & Verspagen, Bart, 1990. "Demand and innovation: Schmookler re-examined," Research Policy, Elsevier, vol. 19(4), pages 387-394, August.
    26. 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.
    27. Ghisetti,Claudia & Marzucchi,Alberto & Montresor,Sandro, 2013. "Does external knowledge affect environmental innovations? An empirical investigation of eleven European countries," INGENIO (CSIC-UPV) Working Paper Series 201301, INGENIO (CSIC-UPV), revised 23 May 2013.
    28. Jens Horbach & Vanessa Oltra & Jean Belin, 2013. "Determinants and Specificities of Eco-Innovations Compared to Other Innovations--An Econometric Analysis for the French and German Industry Based on the Community Innovation Survey-super-1," Industry and Innovation, Taylor & Francis Journals, vol. 20(6), pages 523-543, August.
    29. Rennings, Klaus, 1998. "Towards a Theory and Policy of Eco-Innovation - Neoclassical and (Co-)Evolutionary Perspectives," ZEW Discussion Papers 98-24, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    30. Johnstone, Nick & Labonne, Julien, 2009. "Why do manufacturing facilities introduce environmental management systems? Improving and/or signaling performance," Ecological Economics, Elsevier, vol. 68(3), pages 719-730, January.
    31. repec:hal:journl:halshs-00523512 is not listed on IDEAS
    32. Breschi, Stefano & Malerba, Franco & Orsenigo, Luigi, 2000. "Technological Regimes and Schumpeterian Patterns of Innovation," Economic Journal, Royal Economic Society, vol. 110(463), pages 388-410, April.
    33. Kemp, René & Pontoglio, Serena, 2011. "The innovation effects of environmental policy instruments — A typical case of the blind men and the elephant?," Ecological Economics, Elsevier, vol. 72(C), pages 28-36.
    34. Rosenberg, Nathan, 1974. "Science, Invention and Economic Growth," Economic Journal, Royal Economic Society, vol. 84(333), pages 90-108, March.
    35. Tomasz Kozluk & Vera Zipperer, 2014. "Environmental policies and productivity growth: a critical review of empirical findings," OECD Journal: Economic Studies, OECD Publishing, vol. 2014(1), pages 155-185.
    36. Hoffmann, Volker H., 2007. "EU ETS and Investment Decisions:: The Case of the German Electricity Industry," European Management Journal, Elsevier, vol. 25(6), pages 464-474, December.
    37. De Marchi, Valentina, 2012. "Environmental innovation and R&D cooperation: Empirical evidence from Spanish manufacturing firms," Research Policy, Elsevier, vol. 41(3), pages 614-623.
    38. Leiter, Andrea M. & Parolini, Arno & Winner, Hannes, 2011. "Environmental regulation and investment: Evidence from European industry data," Ecological Economics, Elsevier, vol. 70(4), pages 759-770, February.
    39. Arundel, A & Kemp, Rene, 2009. "Measuring eco-innovation," Working Papers 10062, University of Tasmania, Tasmanian School of Business and Economics, revised 30 Aug 2010.
    40. Hanna Hottenrott & Bettina Peters, 2012. "Innovative Capability and Financing Constraints for Innovation: More Money, More Innovation?," The Review of Economics and Statistics, MIT Press, vol. 94(4), pages 1126-1142, November.
    41. Tomás, R.A.F. & Ramôa Ribeiro, F. & Santos, V.M.S. & Gomes, J.F.P. & Bordado, J.C.M., 2010. "Assessment of the impact of the European CO2 emissions trading scheme on the Portuguese chemical industry," Energy Policy, Elsevier, vol. 38(1), pages 626-632, January.
    42. Veugelers, Reinhilde, 2012. "Which policy instruments to induce clean innovating?," Research Policy, Elsevier, vol. 41(10), pages 1770-1778.
    43. Philippe Aghion & Reinhilde Veugelers & Clément Serre, 2009. "Cold Start for the Green Innovation Machine," Policy Contributions 354, Bruegel.
    44. Giovanni Marin & Massimiliano Mazzanti, 2013. "The evolution of environmental and labor productivity dynamics," Journal of Evolutionary Economics, Springer, vol. 23(2), pages 357-399, April.
    45. Klaassen, Ger & Miketa, Asami & Larsen, Katarina & Sundqvist, Thomas, 2005. "The impact of R&D on innovation for wind energy in Denmark, Germany and the United Kingdom," Ecological Economics, Elsevier, vol. 54(2-3), pages 227-240, August.
    46. Matthew Cole & Robert Elliott & Joanne Lindley, 2009. "Dirty money: Is there a wage premium for working in a pollution intensive industry?," Journal of Risk and Uncertainty, Springer, vol. 39(2), pages 161-180, October.
    47. Paul Conway & Giuseppe Nicoletti, 2006. "Product Market Regulation in the Non-Manufacturing Sectors of OECD Countries: Measurement and Highlights," OECD Economics Department Working Papers 530, OECD Publishing.
    48. repec:dau:papers:123456789/10174 is not listed on IDEAS
    49. Michael E. Porter & Claas van der Linde, 1995. "Toward a New Conception of the Environment-Competitiveness Relationship," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 97-118, Fall.
    50. Requate, Till, 2005. "Dynamic incentives by environmental policy instruments--a survey," Ecological Economics, Elsevier, vol. 54(2-3), pages 175-195, August.
    51. René Kemp, 2010. "Eco-innovation: Definition, Measurement and Open Research Issues," Economia politica, Società editrice il Mulino, issue 3, pages 397-420.
    52. Michael Grubb & David Ulph, 2002. "Energy, the Environment, and Innovation," Oxford Review of Economic Policy, Oxford University Press, vol. 18(1), pages 92-106, Spring.
    53. Rogge, Karoline S. & Schneider, Malte & Hoffmann, Volker H., 2011. "The innovation impact of the EU Emission Trading System -- Findings of company case studies in the German power sector," Ecological Economics, Elsevier, vol. 70(3), pages 513-523, January.
    54. Horbach, Jens, 2008. "Determinants of environmental innovation--New evidence from German panel data sources," Research Policy, Elsevier, vol. 37(1), pages 163-173, February.
    55. Marc Gronwald & Janina Ketterer, 2012. "What Moves the European Carbon Market? - Insights from Conditional Jump Models," CESifo Working Paper Series 3795, CESifo Group Munich.
    56. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Patricia Laurens & Christian Bas & Antoine Schoen & Stéphane Lhuillery, 2016. "Technological contribution of MNEs to the growth of energy-greentech sector in the early post-Kyoto period," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 18(2), pages 169-191, April.
    2. repec:eee:respol:v:46:y:2017:i:5:p:939-955 is not listed on IDEAS
    3. Nabila Arfaoui & Eric Brouillat & Maïder Saint-Jean, 2015. "The Impact of REACH on Eco-Innovation: How Perception Misfits on Policy Stringency Matter," GREDEG Working Papers 2015-45, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis.
    4. Zhu, Qinghua & Geng, Yong & Sarkis, Joseph, 2016. "Shifting Chinese organizational responses to evolving greening pressures," Ecological Economics, Elsevier, vol. 121(C), pages 65-74.
    5. repec:eee:resene:v:49:y:2017:i:c:p:86-98 is not listed on IDEAS
    6. Simone Borghesi & Andrea Flori, 2016. "EU ETS Facets in the Net: How Account Types Influence the Structure of the System," Working Papers 2016.08, Fondazione Eni Enrico Mattei.
    7. Sam, Aflaki & Syed Abul, Basher & Andrea, Masini, 2016. "Does economic growth matter? Technology-push, demand-pull and endogenous drivers of innovation in the renewable energy industry," MPRA Paper 69773, University Library of Munich, Germany.
    8. Ghisetti, Claudia & Pontoni, Federico, 2015. "Investigating policy and R&D effects on environmental innovation: A meta-analysis," Ecological Economics, Elsevier, vol. 118(C), pages 57-66.
    9. repec:gam:jsusta:v:9:y:2017:i:11:p:2057-:d:118260 is not listed on IDEAS
    10. repec:eee:rensus:v:74:y:2017:i:c:p:824-834 is not listed on IDEAS
    11. Giulio Cainelli & Alessio D’Amato & Massimiliano Mazzanti, 2017. "Resource Efficiency, Environmental Policy and Eco-Innovations for a Circular Economy: Evidence from EU Firms," SPRU Working Paper Series 2017-24, SPRU - Science Policy Research Unit, University of Sussex Business School.
    12. Aldieri, Luigi & Kotsemir, Maxim & Vinci, Concetto Paolo, 2017. "Jacobian spillovers in environmental technological proximity: the role of Mahalanobis index on European patents within the Triad," MPRA Paper 77274, University Library of Munich, Germany.
    13. D’Amato, Alessio & Dijkstra, Bouwe R., 2015. "Technology choice and environmental regulation under asymmetric information," Resource and Energy Economics, Elsevier, vol. 41(C), pages 224-247.
    14. Tutulmaz, Onur, 2015. "Environmental Kuznets Curve time series application for Turkey: Why controversial results exist for similar models?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 50(C), pages 73-81.
    15. repec:eee:enepol:v:117:y:2018:i:c:p:434-444 is not listed on IDEAS
    16. Zhang, Cheng & Wang, Qunwei & Shi, Dan & Li, Pengfei & Cai, Wanhuan, 2016. "Scenario-based potential effects of carbon trading in China: An integrated approach," Applied Energy, Elsevier, vol. 182(C), pages 177-190.
    17. Nina Bockova, 2015. "Research, Development And Innovations In Czech Manufacture Of Electronic Products," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 10(4), pages 163-180, December.
    18. Grazia Cecere & Massimiliano Mazzanti, 2015. "Green jobs, innovation and environmentally oriented strategies in European SMEs," SEEDS Working Papers 2115, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Dec 2015.
    19. Zhang, Yue-Jun & Peng, Yu-Lu & Ma, Chao-Qun & Shen, Bo, 2017. "Can environmental innovation facilitate carbon emissions reduction? Evidence from China," Energy Policy, Elsevier, vol. 100(C), pages 18-28.
    20. Antonioli, Davide & Mazzanti, Massimiliano, 2017. "Towards a green economy through innovations: The role of trade union involvement," Ecological Economics, Elsevier, vol. 131(C), pages 286-299.
    21. Claudia Ghisetti & Massimiliano Mazzanti & Susanna Mancinelli & Mariangela Zoli, 2015. "Do financial constraints make the environment worse off? Understanding the effects of financial barriers on environmental innovations," SEEDS Working Papers 0115, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Jan 2015.
    22. Patricia Laurens & Christian Le Bas & Stéphane Lhuillery & Antoine Schoen, 2017. "The determinants of cleaner energy innovations of the world’s largest firms: the impact of firm learning and knowledge capital," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 26(4), pages 311-333, May.
    23. Simone Borghesi & Chiara Franco & Giovanni Marin, 2016. "Outward Foreign Direct Investments Patterns of Italian Firms in the EU ETS," SEEDS Working Papers 0116, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Jan 2016.
    24. Mazzanti, Massimiliano & Rizzo, Ugo, 2017. "Diversely moving towards a green economy: Techno-organisational decarbonisation trajectories and environmental policy in EU sectors," Technological Forecasting and Social Change, Elsevier, vol. 115(C), pages 111-116.
    25. repec:eee:tefoso:v:131:y:2018:i:c:p:303-314 is not listed on IDEAS

    More about this item

    Keywords

    Environmental innovation; EU-ETS; CIS EU data; manufacturing;

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:srt:wpaper:2714. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Alessandro Palma). General contact details of provider: http://www.sustainability-seeds.org .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.