Skip to main content

Policy pathways to promote the development and adoption cleaner technologies

Final Report Summary - POPA-CTDA (Policy pathways to promote the development and adoption cleaner technologies)

The aim of the POPA-CTDA project was to assess the issues driving and barriers slowing the development and uptake of cleaner technologies across the energy, agricultural, transport and industrial sectors of the economy. The project identified what are the barriers impeding progress of cleaner technologies and what policy initiatives, and additional research tasks, are needed to address these barriers. The analysis combined extensive survey work into the reasons behind innovation and business engagement in technology development and uptake, with stakeholder and expert consultation.

Currently, the level of willingness and involvement of the average firm in Europe is low. There are exceptional forerunners that are leading the way forward in the eight technological clusters considered in this study (cleaner vehicles, renewable energy technologies, energy efficiency in buildings, stationary fuel cells, bio fuels, bio refineries, white bio technologies and mobility chains). The average stakeholder that participated in the survey expects that not only eco-innovation will be an imperative but all the conditions pushing, conducing and enabling eco-innovations development and uptake will be present. For example, economic risk, normally considered a major factor affecting development and adoption of innovations, is expected to steadily decrease in the next years. Similarly, environmental risks are meant to be more prominent and avoidable. It is worth to be noticed that the average respondent in the sample expects environmental risks to start decreasing after 2015.

Concerning the perceived pressure or demand for eco-innovations in by the market (e.g. competitors, consumers, pace of innovation in the sector); regulation (e.g. European directives and national, international treaties, industrial standards); and diverse communities (shareholders, local communities, firm's internal staff) are all expected to steadily increase to a point where they are high. The expected trends and positive outlook described above is underpinned with very positive attitudes in a large proportion of stakeholders that participated in the survey. In all aspects of the standard scale of attitude, a large proportion of the respondents indicated positive outcomes, a small proportion indicated to be uncertain about the effects on their firm and minimum part of the sample expected to negative effects arising from the development and adoption of eco-innovations.

Currently, the global environmental technologies market reached approximately USD 556 billion in 2003 (Globe Net, 2005). Recent estimates project a total value of USD 850 billion by 2010. With varying numbers, some estimations indicate that environmental technologies (or eco-industries) in Europe employ over two million people. European firms participating in the global market account for about one-third and are growing at 5 % per year (COM, 2006). The market in Europe reached USD 165 billion in 2003. The environmental technologies sector is expected to generate large business opportunities in the near and long-term. If we look at traditional segmentations of the market, the largest business areas are wastewater treatment, and environmental instrumentation. Water and wastewater treatment presents the greatest opportunities in the global market. Given the trends in energy, water, and raw materials consumption and generated waste, and expected growth demand from emerging economies like China, India, Russia and Brazil, is very likely that the demand for pollution control, sanitation, and environmental services and equipment in general, will increase sharply in the next decade.

Following the analysis in the same segment, because water technologies are mature, mastery of the technology requires only basic skills in few engineering fields. Thus, any country can in the course of 5 - 10 years acquire sufficient skill (knowledge via reverse engineering) to compete nationally and internationally provided that their companies have access to cheap venture capital. This scenario is valid for most of current traditional pollution control technologies. There is huge role for research and development (R&D) and innovation to underpin the structural transformation of the environmental sector and bring about structural change across the economy. If this challenge is taken seriously - as it should, given the severe anomaly of our current technological stock - there is the possibility of rolling out one of the biggest economic multipliers of modern times. The sector requires industrial and innovation policy throughout the innovation cycle, from basic research to diffusion and global exploitation of eco-innovations.

In the average the firms' engagement on eco-innovation is not conditioned by a main single factor. Furthermore the number of factors affecting the development and adoptions of innovations is large, quite large. One of the main lessons derived from the empirical testing of the model that underpins the assessment of barriers and drives in this project is that in many instances the current policy effort is misplaced. It was demonstrated that the engagement of firms on innovative behaviour is dependent on the interaction of different drivers (or barriers).Currently there are a large number of policy instruments available that could help to promote innovation. One large inefficiency in their application is the minimal coordination and targeting on specific sectors and technologies.

The optimal policy mix for a targeted intervention program to a specific group, this demonstrated by the empirical work in this project would be the following:
- increase environmental risk awareness in suppliers and users of eco-innovations;
- let market pressures act and intervene with the creation of niche markets via public procurement;
- increase technological capabilities and facilitate demonstration projects;
- facilitate the creations of network of collaboration;
- minimise economic risk and direct regulation.
Direct regulation has shown to work only when there are ready available technical solutions and there is an undisputable powerful state. Both necessary conditions are not meet in the case of eco-innovations.

Ultimately, in developing a strategy and plan to encourage innovation and instruments to achieve the goals, generic insights and conclusions may be useful guides or a check list, but it is the national conditions in the international context that correspond to the specific technology and industry in question which will determine what is likely to work or not.

This project has advanced the state of the art on environmental and technology policy research by developing and empirically testing at the EU level a model to assess barriers and drivers to the firm's engagement in the development and use of cleaner technologies (eco-innovation). The approach of this project integrated the newest theoretical and methodological insights from the innovation and environmental policy realms. The project applied a definitional system that enabled empirical testing of the conditions under which innovative behaviour of firms could be fostered. Special effort was placed on the design of policy measures to define new environmental and technology policy pathways to tackle barriers that hamper the development and diffusion of cleaner technologies. This was done in a interactive fashion with a broad range of stakeholders. The project produced insights that are at the horizontal policy level, but also rich knowledge at the sector and technology cluster level.

The empirical work was conducted across nine EU Member States. These included the Netherlands, Sweden, Spain, Germany, United Kingdom, Austria, Hungary, Poland and Czech Republic. The field work included interviews with 109 different stakeholders involved in development, uptake and promotion of eco-innovations. This included regulators, researchers, manufacturers, users, and distributors of eco-innovations. A survey with a broader number of stakeholders included the mailing of 2 440 questionnaires. The rate of response was 14.5 % rendering 356 responses. This level of response enabled the statistical validation of model used with very satisfactory statistical results concerning the validation of the instrument used. In this sense, the research activities fulfilled the scientific objectives of the project. The project generated behavioural indicators that explain and clearly show what barriers affect now the development and adoption of eco-innovations and how these barriers may evolve in the medium and long term. Some of the insights are presented below, full access to the deliverables in the eight case studies are available in