Chapter 5: End-of-Pipe or Cleaner Production? An Empirical Comparison of Environmental Innovation Decisions Across OECD Countries
Manuel Frondel, Jens Horbach and Klaus Rennings I. INTRODUCTION Typically, we distinguish between two diﬀerent types of environmental investments that mitigate the environmental burden of production: cleaner production and end-of-pipe technologies. Cleaner production reduces resource use and/or pollution at source by using cleaner inputs and production methods directly within the production process, whereas end-of-pipe technologies curb pollution emissions by implementing add-on measures. Thus, cleaner production technologies are frequently seen as being superior to end-of-pipe technologies for both environmental and economic reasons. Investment in cleaner production technologies, however, is often hampered by barriers such as additional requirements for coordination and a lack of organizational support within ﬁrms. In addition to substantial investment costs in new technologies, additional obstacles arise due to the nature of the environmental problem and the type of regulations involved. Command-and-control (CaC) regulations, for instance, frequently entail technology standards that can only be met through end-of-pipe abatement measures. With respect to the diﬀusion of cleaner production, the question arises as to which one of several alternative policy approaches is to be preferred: technology-based standards, voluntary measures, or economic instruments, which leave decisions about the appropriate abatement technology up to the ﬁrm? There has been exceptionally little empirical analysis directed at the diﬀusion of speciﬁc types of environmental technologies, principally because of the paucity of available data (Brunnermeier and Cohen 2003; Jaﬀe et al. 2002). In particular, it is still unclear to what extent and why ﬁrms may shift 174 An empirical comparison of...
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