Policy vs. Consumer Pressure: Innovation and Diffusion of Alternative Bleaching Technologies in the Pulp Industry

David Popp, Tamara Hafner and Nick Johnstone

No 13439, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In the late 1980s and early 1990s, concern over dioxin in both paper products and wastewater led to the development of techniques that reduced the use of chlorine in the pulp industry. Both regulatory and consumer pressure motivated this change. We use patent data to examine the evolution of two completing bleaching technologies in five major paper-producing countries, both of which reduce the use of chlorine in the pulping process. By the end of the 1990s, nearly all pulp production in these countries used one of these technologies. Unlike other papers using patents to study environmentally-friendly innovation, we focus on a process innovation, rather than on end-of-the-pipe solutions to pollution. Moreover, while previous studies emphasize the importance of regulation for inducing innovation, here we find substantial innovation occurring before regulations were in place. Instead, pressure from consumers to reduce the chlorine content of paper drives the first round of innovation. However, while some companies choose to adopt these technologies in response to consumer pressure, not all firms will differentiate their product in this way. Thus, governments need to regulate if their goal is broad diffusion of the environmental technology.

JEL-codes: O31 O33 Q53 Q55 (search for similar items in EconPapers)
Date: 2007-09
New Economics Papers: this item is included in nep-env, nep-his, nep-ino, nep-ipr and nep-pr~
Note: EEE PR
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Citations: View citations in EconPapers (20)

Published as Research Policy Volume 40, Issue 9, November 2011, Pages 1253–1268

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