Activating the Private Clean Innovation Machine

20 Pages Posted: 12 Jul 2012

See all articles by Reinhilde Veugelers

Reinhilde Veugelers

Catholic University of Leuven (KUL) - Department of Applied Economics; Centre for Economic Policy Research (CEPR)

Date Written: Summer 2011

Abstract

In view of the sizeable climate change challenge, we need a clean innovation machine operating at full speed. The private clean innovation machine, left on its own, is not up for this challenge. It needs government intervention to address the combination of environmental and knowledge externalities and overcome path dependencies. The firm level evidence presented in this contribution on the motives of private sector firms for introducing clean innovations from the latest Flemish CIS eco-innovation survey confirms that firms are responsive to eco-policy interventions. It is however not a panacea. The high importance of demand pull from customers and voluntary codes of conduct or voluntary sector agreements as drivers for introducing clean innovations, is a reminder of the internal strength of the private innovation machine, which government should try to leverage. The evidence is also strongly suggestive of how important the details of the policy design are. Policy interventions are more powerful to induce the adoption and development of new clean technologies when designed time consistently, affecting future expectations.

Suggested Citation

Veugelers, Reinhilde, Activating the Private Clean Innovation Machine (Summer 2011). Available at SSRN: https://ssrn.com/abstract=2104149 or http://dx.doi.org/10.2139/ssrn.2104149

Reinhilde Veugelers (Contact Author)

Catholic University of Leuven (KUL) - Department of Applied Economics ( email )

Leuven, B-3000
Belgium
+32 16 32 6908 (Phone)
+32 16 32 6732 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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