Higher environmental efficiency of economic processes can be achieved by reducing the use of resources and enhancing reuse and recovery of materials. Green Innovations are commonly regarded as the most effective response to sustaining current standards of living while overcoming serious environmental concerns. The aim of this presentation is to focus on the drivers of eco innovation along two directions.
1. along the lines of the EU strategy on resource-efficiency and the development of a circular economy (CE), we aim at presenting new EU evidence regarding the role of environmental policy and green demand drivers to sustain the adoption of CE oriented eco-innovations, with a specific focus on resource efficiency. We use a cross-section of EU firms and account for endogeneity, concluding that environmental policy and demand-side factors are both significant in driving the adoption of innovations that reduce waste and the use of materials, while internal R&D and market dimensions are not significant, or even play a negative role.
2. Focusing instead on OECD countries, we provide a joint theoretical/empirical analysis to test direct and indirect effects of environmental policy on environmental performances. More specifically, we disentangle the direct impact of environmental policy on environmental quality from the indirect effect of policy through induced innovation.
Overall, our analysis highlights several potential driving forces behind eco-innovative efforts (both in terms of patents and technology adoption), together with a strong and robust role of policies.
Working Language: English