End-of-Pipe or Cleaner Production? An Empirical Comparison of Environmental Innovation Decisions Across OECD Countries

31 Pages Posted: 17 Dec 2004 Last revised: 21 Jun 2014

See all articles by Manuel Frondel

Manuel Frondel

RWI Leibniz Institute for Economic Research ; Ruhr University Bochum (RUB)

Jens Horbach

University of Applied Sciences Anhalt

Klaus Rennings

Center for European Economic Research (ZEW)

Date Written: 2004

Abstract

While both fundamental types of abatement measures mitigate the adverse environmental impacts of production, cleaner production technologies are frequently more advantageous than end-of-pipe technologies for environmental and economic reasons. This paper analyzes a variety of factors that might enhance firms' propensity to implement cleaner products and production technologies instead of end-of-pipe technologies. On the basis of a unique facility-level data set derived from a recent OECD survey, we find a clear dominance of cleaner production in seven OECD countries: Surprisingly, 76.8% of the facilities report that they invest predominantly in cleaner production technologies. With regard to environmental product innovations, the large majority of facilities reports that the measures they have undertaken to reduce environmental impacts were geared at production processes and not so much at products. Our estimation results are based on multinomial logit models which indicate that regulatory measures and the stringency of environmental policies are positively correlated with end-of-pipe technologies, while cost savings, general management systems, and specific environmental management tools tend to favor clean production. We conclude that improvements towards cleaner products and production may be reached by the continuous development and wider diffusion of these management tools. Improvements may also be stimulated by widening the cost gap between the two types of technologies, for instance, by additionally charging for waste and energy use.

Keywords: Cleaner production, end-of-pipe-technologies, technological innovation, technological change, government policy, discrete choice models

JEL Classification: Q55, O33, O38, C25

Suggested Citation

Frondel, Manuel and Horbach, Jens and Rennings, Klaus, End-of-Pipe or Cleaner Production? An Empirical Comparison of Environmental Innovation Decisions Across OECD Countries (2004). ZEW - Centre for European Economic Research Discussion Paper No. 04-082. Available at SSRN: https://ssrn.com/abstract=633101 or http://dx.doi.org/10.2139/ssrn.633101

Manuel Frondel (Contact Author)

RWI Leibniz Institute for Economic Research ( email )

Hohenzollernstr. 1-3
45128 Essen
Germany

Ruhr University Bochum (RUB) ( email )

Universitätsstraße 150
Bochum, NRW 44780
Germany

Jens Horbach

University of Applied Sciences Anhalt ( email )

Pfarrsteig 4
Lichtenfels 96215
Germany

Klaus Rennings

Center for European Economic Research (ZEW) ( email )

P.O. Box 10 34 43
L 7,1 D-68161 Mannheim
Germany

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