Innovation towards Energy-Efficiency and Porter's Hypothesis

Marcus Wagner

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Abstract: Porter proposed that stringent environmental regulation can lead to situations, in which social welfare as well as the private net benefits of firms operating under such regulation can be increased. His opponents criticize the hidden assumption that firms systematically overlook opportunities for improving environmental quality that also increases their competitiveness. Relevant as a causal mechanism here is innovation. This is very closely linked to aspects of market structure and therefore this paper analyses Porter's hypothesis with regard to these aspects. Firstly, it analyses the role of innovation and market structure based on theoretical reasoning behind the hypothesis by reviewing the findings of empirical studies testing the hypothesis. Secondly, the paper expands on the first part by applying Porter's ideas to one specific aspect of environmental quality, namely energy efficiency and innovations to achieve the latter.

Keywords: Energy efficiency; Environmental protection; Industry; Competition; Market; Environmental policy; Pollution regulation; Reviews; Household (search for similar items in EconPapers)
Date: 2006
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Published in Zeitschrift für Energiewirtschaft, 2006, 30 (4), pp.315-320

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00278717

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