End-of-Pipe or Cleaner Production? An Empirical Comparison of Environmental Innovation Decisions Across OECD Countries

Abstract

Die Discussion Papers dienen einer möglichst schnellen Verbreitung von neueren Forschungsarbeiten des ZEW. Die Beiträge liegen in alleiniger Verantwortung der Autoren und stellen nicht notwendigerweise die Meinung des ZEW dar.Discussion Papers are intended to make results of ZEW research promptly available to other economists in order to encourage discussion and suggestions for revisions. The authors are solely responsible for the contents which do not necessarily represent the opinion of the ZEW.Download this ZEW Discussion Paper from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp0482.pdf I Non-technical SummaryTypically, we distinguish between two different types of environmental innovations that mitigate the environmental burden of production: cleaner production and end-of-pipe technologies. Cleaner production reduces resource use and/or pollution at the source by using cleaner products and production methods, whereas end-of-pipe technologies curb pollution emissions by implementing add-on measures. Thus, cleaner products and production technologies are frequently seen as being superior to end-of-pipe technologies for both environmental and economic reasons.The establishment of cleaner production technologies, however, is often hampered by barriers such as additional co-ordination input and a lack of organizational support within firms. In addition to substantial investment costs in new technologies, additional obstacles arise due to the nature of the environmental problem and the type of regulations involved.Command and Control (CaC) regulations, for instance, frequently impose technology standards that can only be met through end-of-pipe abatement measures. With particular respect to the diffusion of cleaner production and products, the question arises which one of several alternative policy approaches is to be preferred: performance standards, voluntary measures, or economic instruments which leave decisions about the appropriate abatement technology up to the firm?This paper analyzes factors that may enhance a firm's propensity to implement cleaner products and production technologies rather than end-of-pipe technologies. It is a widespread assumption that end-of-pipe technologies still dominate investment decisions in firms. This is because there has been exceptionally little empirical analysis directed to the determinants of the use of specific types of abatement measures -principally because of the paucity of available data. On the basis of a unique facility-level data set based on a recent survey covering seven OECD countries (Canada, France, Germany, Hungary, Japan, Norway, and the U.S.)we find a clear dominance of cleaner production in these countries: Surprisingly, 76.8% of our sample facilities report that they predominantly invest in cleaner production technologies.There are, however, significant differences: Most notably, Germany displays the lowest percentage of cleaner production technologies among these OECD countries (57.5 %), while Japan exhibits the highest respective share (86.5 %). T...

How MNEs respond to environmental regulation: integrating the Porter hypothesis and the pollution haven hypothesis

“…Also Frondel et al (2007) use the OECD survey, and they observe that stringent ER are more important for end-ofpipe technologies, while cost savings, general management systems and specific environmental management tools tend to positively affect clean production. On twocountry comparison, Horbach et al (2013) confirm the importance of regulation as drivers for eco-innovations compared to other innovations for German and French firms.…”

Co-valorization of Crude Glycerol Waste Streams with Conventional and/or Renewable Fuels for Power Generation and Industrial Symbiosis Perspectives

“…Cleaner production focuses on reducing resource use and/or pollution at the source by using less pollutant feedstock and production methods, whereas end-of-pipe technologies implement add-on measures to address pollution, increasing costs of the plant. Although, regulatory measures and stringer environmental policies are positively correlated with end-of-pipe technologies and the relative cost, cost savings, wastes management systems and specific environmental management tools (such as symbiosis) tend to favor clean production [89].…”

Environmental policy and economies of scope in facility-level environmental practices

“…The database includes 4186 observations from facilities with more than 50 employees in all manufacturing sectors. 6 A number of studies have been conducted using the database, including that of Frondel et al (2007), which assessed the determinants of investments in both CPP and EOP through a multinomial logit model. This study differs from that in two important ways: (1) it focuses on the discrete choice between the two options and thus allows for a focused analysis of economies of scope; and (2) it includes a number of regressors that were not included in this article and reflect factors that are likely to encourage or inhibit the realization of such economies of scope.…”