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Invention and Transfer of Environmental Technologies

image of Invention and Transfer of Environmental Technologies

Inducing environmental innovation is a significant challenge to policy-makers. Efforts to design public policies that address these issues are motivated by the fact that innovations can allow for improved environmental quality at lower cost. However, the relationship between environmental policy and technological innovation remains an area in which empirical evidence is scant.  Increased attention should be paid to the design characteristics of public policies that are likely to affect the ‘type’ of innovation induced.  The work presented in this book is brought together in five substantive chapters: environmental policy design characteristics and their role in inducing innovation, the role of public policies (including multilateral agreements) in encouraging transfer of environmental technologies, followed by three ‘sectoral’ studies of innovation in alternative fuel vehicles, solid waste management and recycling, and green (sustainable) chemistry. While particular focus has been placed on the role of environmental policy in bringing about the innovation documented, it is recognised that other factors play a key role in inducing innovation which has positive environmental implications.     

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Environmental Policy Design Characteristics and Innovation

It is often argued that market-based instruments are a preferable means of encouraging innovation than direct forms of regulation, drawing a stark contrast between the two. In this chapter it is argued that it is more helpful to think in terms of the more general characteristics of different policy instruments, including policy stringency, predictability, flexibility, depth and incidence. Some of these questions are further examined empirically drawing upon a rich database of patent data. It is found that while stringency of environmental policy is important, predictability and flexibility of policies indeed matter as well.

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