35.4 Accelerating the takeoff – Towards an Integrated eco-Innovation Policy

Jean-Roger M. G. Drèze , Directorate-General for Environment, Federal Public Service for Health and Environment, Brussels, Belgium

Accelerating the takeoff – Towards an Integrated eco-Innovation Policy

Exploring and developing the concept of an Integrated (eco)Innovation Policy (IIP) seems to become nowadays a momentum and probably a perequisite to accelerate the breakthrough towards a low-carbon economy.

The transition towards a low-carbon economy – and from there to the knowledge society – is a “narrow door” and a demanding challenge. Complex conditions are at stake addressing cultural, societal and ethical dimensions. However, two main drivers are commonly presented as prerequisites to proceed: a technological breakthrough (i.e. eco-innovations, technological and non-technological) and sustainable development strategies. Both are necessary. They should be integrated, mutually supportive and fine-tuned in order to create synergies, to develop a virtuous circle and deliver dividends in the economic, social and environmental dimensions.

Sustainable development policies and behaviors should indeed complement the uptake of eco-innovative technologies in order to mitigate rebound-effects induced by the de-materialization and de-carbonization of the productive capacities and by the resulting shift to more efficient production and consumption patterns.

However, the uptake of eco-innovation at a wartime speed remains a priority. Evidence shows that despite efforts undertaken by governments – with varying success and results – to accelerate the market uptake of environmental technologies, much remains to be done. Since the ETAP was launched in 2004, some Member States still experience (serious) delays in the technological transition to cleaner and leaner production patterns.

Some case studies can be exposed (the Belgium case is an example) explaining leads and lags in the adoption of eco-innovation by the market, especially by energy-intensive sectors such as transportation, household, building renovation and energy using & related products.

The paper shows that structural indicators and input-output matrix can partly explain obstacles and bottlenecks to the uptake of eco-innovation and to the adoption of environmental technologies by industry, SME and consumers. On the other hand, policy engineering might be improved. In 2001 the OECD Environmental Strategy for the first Decade of the 21st Century indicated that for global environmental concerns (and climate change is indeed a global concern) environmental policies should be more coherent and integrated in order to close the “implementation gap”. Policies seem relevant, but results are hardly to observe.

Lack of integrated policies is obviously the other major obstacle in eco-innovation policies. Policy re-engineering might be adopted. In fact eco-innovation is embedded in the broader framework of innovation policies and obeys to the rationale “S” curve of innovation. All stages of the maturation and deployment are important and should be mutually supportive, as much as successive actors engaged. Nevertheless, public financing schemes and incentives remain fragmented, due to differentiated regional competences, institutional federalism or dedicated policies and measures.

Innovation policies are often seen as a succession of discontinuous stages, disclosing actors and markets: R&D, prototypes, demo, niches, early adopters, mass application, laggards and then saturation. However evidence shows that eco-innovation process is globally more complex. It must be addressed as a “life-cycle process” and designed through an integrated strategic and systemic approach. Moreover, the “eco” component introduces additional dimensions which clean the market. The introduction of sustainable production and consumption patterns also requires alternative management schemes.  

Addressing the « implementation gap » the paper indicates that a close attention should be given to a life-cycle approach, going from research to product and from product to the market, through ETV, performance criteria, user-guidance (education), awareness raising, confidence building, purchasing power policies. This life-cycle vision, seen as a first basic building block, leads to an integrated innovation policy (IIP) approach.

However an IIP is much broader than the LCA dimension. The paper asks what is « eco-innovation » and compares the innovation cycle with the classical life-cycle of the Integrated Product Policy's cycle. The paper also analyses how to integrate supply- and demand-side dimensions. Might the process of technological innovation (explained by the "S" curve) be a process of dominance, even domination, using tactical options and strategies, in an overview of ownership share? In this case you can lose a battle but the important thing is to win the war. Alliance building and mitigation policies should be part of your dominance strategy.

 

Improving market uptake also requires a mix of various instruments. Consumers can dispose good eco-products but misuse them and get bad environmental performances. The way the product is used is as much important as the product itself. Developing user-guide and user's capability are necessary drivers. IIP should integrate regulation policies & education measures; market-based instruments & purchasing power policies; financing practices, ETVS & targeted performance criteria.

To conclude, the paper exposes some major building blocks of an Integrated eco-Innovation Policy (IIP):

•         Adoption of a long term vision. Industry asks for long term benchmarks pertaining either to a Low-carbon economy, to a Recycling one or to a Knowledge economy.

•         Definition of an (eco)innovation life-cycle. From the « S » curve to synergies among stages of the maturation and deployment processes.

•         Designing non-technological approaches addressing local productive and trade profile.

•         Integration of policies & actors. Develop policy-mix. Don't forget that policies are implemented by actors.

•         Integration of instruments. Develop mix of instrument for each stage of the ‘S' curve. Adopt fine tuned approaches. Develop structural indicators.

•         Respond to people's cultural needs and purchasing power.  

 

Jean-Roger Drèze

Federal department for Environment