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Indicators for environmental innovation: what and how to measure


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Arundel, A, Kemp, R and Parto, S 2012 , 'Indicators for environmental innovation: what and how to measure', in The International Handbook on Environmental Technology Management , Edward Elgar.

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Environmental innovation is encouraged by many factors, including government regulation
and subsidies, business opportunities for clean production, and the adoption by
firms of an environmental ethic in response to public pressure. By the late 1980s environmental
management had become an integral part of the corporate strategy of many
firms in developed countries, diffusing increasingly also in developing countries. This
brought into focus the potential economic benefits of environmental innovation from
reduced material inputs and a shift away from end-of-pipe treatment solutions to preventive
solutions.' However, despite the economic value of environmental innovation for
industry and its potential societal benefits, there are only a few internationally comparable
indicators2 on the prevalence of environmental innovation, the factors that influence
it and its economic effects. This shortage hampers the ability to design policies to encourage
economically efficient environmental innovation and to track progress towards enviromnental
The pollution abatement costs and expenditures (PACE) data are one example of the
limitations of current indicators. PACE data on capital equipment spending by firms to
reduce pollution have been collected on an annual basis in the United States, France and
Germany and on an irregular basis in the Netherlands, the UK and Canada (Olewiler,
1994). The PACE estimates however, do not include investment in research and development
(R&D) or other inventive activities, and are more likely to reflect end-of-pipe investments
than investments in clean technology. The European Community Innovation
Survey and similar surveys conducted in Australia and Canada are similarly lacking.
Although these surveys include a few questions of relevance to environmental innovation,
such as whether the firm's innovations have resulted in the reduction of per unit
material and/or energy use, these questions only scratch the surface of environmental
• Issues.

Item Type: Book Section
Authors/Creators:Arundel, A and Kemp, R and Parto, S
Publisher: Edward Elgar
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