We analyse the role of financial barriers in affecting the adoption of environmental innovations (EI) with a focus on manufacturing small and medium-sized enterprises in Europe. In taking stock of the consolidated literature on EI, we find that the role of financial barriers is substantially neglected, although crucial, even more relevant in the current phase of the economic cycle. Our empirical analysis confirms the existence of direct negative effects of financial barriers on environmental innovation investment decisions. It furthermore sheds more light on the determinants of financial barriers that shape firms' cleaner production choices. Our findings have the following policy implications: properly designed policies can play a critical role, not only by stimulating EI through their determinants, but also by acting on the financial obstacles to eco-innovation. Policy relevanceEnvironmental innovations (EI) are essential to achieve economic growth and environmental protection goals. Technological development is one of the key factors that can counterbalance the growth and population emission-augmenting effects. EI are a priority in major EU policy strategies and a prerequisite for the development of a 'Resource efficient Europe', one of the flagship initiatives of Europe 2020. The existence of financial barriers can constitute a serious deterrent for the eco-innovative capacity of firms, even more than for 'traditional' innovations, as EI are characterized by high technical risk, long payback period and uncertainty on the appropriability of private rents. This article analyses in depth whether barriers related to external financing affect EI investments and whether the stringency of financial constraints to investments in EI is affected by factors related to EI specificities. We show that when both direct and indirect effects on EI investments are considered, the role of the policy framework appears to be as particularly crucial in order to reverse the risk/return trade-off of eco-innovative investments. Targeting policy interventions to facilitate access to credit and to mitigate capital markets' imperfections is essential to mitigate the apparent contradiction between EU industrial policies and climate abatement scenarios.

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Conventional poverty measures, showing that poverty and inequality have increased in Italy over the past fifteen years, are based on household income. The main drawback of this method is that it does not include other non-monetary variables relevant for defining households' necessities. It is now widely agreed that poverty should be conceptualised as a multidimensional phenomenon, more related to the standard of living of the person or household than to the simple inability of satisfying basic subsistence needs. In this paper we propose to measure poverty in Italy by complementing income information with non-monetary indicators. To this end a multidimensional poverty analysis is performed by using a representative sample based on the first wave ( 2004) of the Italian component of the European Statistics on Income and Living Conditions (EU-SILC). Starting from the concept of deprivation, a non linear principal component analysis is applied to selected items in order to reveal underlying latent dimensions to be interpreted as deprivation indicators. We then examine how such measures can be combined with income measures in order to obtain a better identification of the poor. Finally we examine the overlapping between the income poor and the deprived and provide an analysis of deprivation profiles. Our results show that a more comprehensive poverty measure, combining deprivation criteria and income poverty, leads to a different identification of poor people, compared to analyses based only on income measures.

Despite the efforts made during the last climate conferences (COPs), countries participating in the negotiation process are still far from reaching an agreement on the implementation of a new Post-Kyoto climate regime. The growing role played by developing countries in negotiations is one of the main causes behind the deadlock. Further attention should therefore be paid to the composition of the coalitions formed by developing countries in order to better understand the key structural features driving their bargaining positions. By applying a cluster analysis, this paper aims to investigate the role played by heterogeneity in specific characteristics of developing countries in forming bargaining coalitions in climate negotiation. By clustering developing countries according to their economic, geographic, environmental, energy and social characteristics, the paper presents some considerations on climate political economy strategies in these countries.