No abstract

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.

Though reduction is at the top of the waste management hierarchy, EU policies have historically introduced waste management incentives mainly concerning waste recovery and recycling, in addition to actions aimed at reducing disposal in landfills. Only very recently have EU policies started defining targets for waste reduction. Against this backdrop, we aim to examine whether individual behavior towards waste reduction is more strongly driven by extrinsic motivations such as social norms, or intrinsic motivations such as purely altruistic preferences. We exploit a large new survey that covers thousands of individuals for the EU27, to test the role of motivations when people are faced with collective management of the public good. We find that diverse motivations are behind the reduction of food waste: extrinsic motivations nevertheless increase the likelihood of producing more waste. Green consumption / recycling-oriented attitudes and individualistic thinking about waste management relate to 'waste producers'. This shows that in order to go beyond a recycling-oriented society towards reduction of the source of waste externality -its generation -the nature of social preferences matters. Behavior patterns leading to waste reduction are less socially oriented, less exposed to peer pressure and more reliant upon purely 'altruistic' social attitudes. Policy makers should learn from the relevant insights on social behavior we here address if our societies aim to fully integrate the idea of waste reduction alongside recycling in the future.

Though reduction is at the top of the waste management hierarchy, EU policies have historically introduced waste management incentives mainly concerning waste recovery and recycling, in addition to actions aimed at reducing disposal in landfills. Only very recently have EU policies started defining targets for waste reduction. Against this backdrop, we aim to examine whether individual behavior towards waste reduction is more strongly driven by extrinsic motivations such as social norms, or intrinsic motivations such as purely altruistic preferences. We exploit a large new survey that covers thousands of individuals for the EU27, to test the role of motivations when people are faced with collective management of the public good. We find that diverse motivations are behind the reduction of food waste: extrinsic motivations nevertheless increase the likelihood of producing more waste. Green consumption / recycling-oriented attitudes and individualistic thinking about waste management relate to 'waste producers'. This shows that in order to go beyond a recycling-oriented society towards reduction of the source of waste externality -its generation -the nature of social preferences matters. Behavior patterns leading to waste reduction are less socially oriented, less exposed to peer pressure and more reliant upon purely 'altruistic' social attitudes. Policy makers should learn from the relevant insights on social behavior we here address if our societies aim to fully integrate the idea of waste reduction alongside recycling in the future.

D21, L25, O3, O14, Z13,