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Innovation Complementarity and Environmental Productivity Effects: Reality or Delusion? Evidence from the EU

Massimiliano Mazzanti (), Susanna Mancinelli () and Marianna Gilli

No 2014043, Working Papers from University of Ferrara, Department of Economics

Abstract: Innovation is a key element behind the achievement of desired environmental and economic performances. Regarding CO2, mitigation strategies would require cuts in emissions of around 80-90% with respect to 1990 by 2050 in the EU. We investigate whether complementarity, namely integration, between the adoption of environmental innovation measures and other technological and organizational innovations is a factor that has supported reduction in CO2 emissions per value added, that is environmental productivity. We merge new EU innovation and WIOD data to assess the innovation effects on sector CO2 performances at a wide EU level. We find that jointly adopting different innovations is not a widespread factor behind increases in environmental productivity. Nevertheless, even though complementarity is not a low hanging fruit, a case where ‘innovation complementarity’ arises is for manufacturing sectors, that integrate eco innovations with product innovations. One example of this integrated action is a strategy that pursue energy efficiency with product value enhancement. We believe that the lack of integrated innovation adoption behind environmental productivity performance is a signal of the current weaknesses economies face in tackling climate change and green economy challenges. Incremental rather than more radical strategies have predominated so far. The latter have been confined to industrial ‘niches’, in terms of number of involved firms. This is probably insufficient when we look at long-term economic and environmental goals.

Keywords: Complementarity; Innovation; Climate Change; Sector Performance (search for similar items in EconPapers)
JEL-codes: L6 O3 Q55 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr, nep-eff, nep-ene, nep-env, nep-eur, nep-ino, nep-knm and nep-res
Date: 2014-01-28
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Related works:
Journal Article: Innovation complementarity and environmental productivity effects: Reality or delusion? Evidence from the EU (2014) Downloads
Working Paper: Innovation Complementarity and Environmental Productivity Effects: Reality or Delusion? Evidence from the EU (2013) Downloads
Working Paper: Innovation Complementarity and Environmental Productivity Effects: Reality or Delusion? Evidence from the EU (2013) Downloads
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