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European Emission Trading Scheme and environmental innovation: an empirical analysis using CIS data for Italy

Author

Listed:
  • Simone Borghesi
  • Giulio Cainelli
  • Massimiliano Mazzanti

    (University of Siena
    University of Padova
    University of Ferrara)

Abstract

We study the driving forces behind the adoption of environmental innovations (EI) in the Italian economy over 2006-2008 through empirical analyses of the new wave of Community Innovation Survey data that covered EI in different contexts. Given the shortage of studies on the innovation effects of ETS at micro econometric level, we investigate whether the first phase of EU ETS has exerted some effects on EI. We then include in a typical probit innovation function some policy stringency indicators for the ETS sectors, to verify whether the likelihood of adopting EI is stimulated among other factors by the ETS lever. We test a wide and comprehensive set of potential drivers, including internal factors (R&D), external factors (cooperation, networking) and, mostly important, the dynamic incentives to innovation possibly provided by the ETS implementation. Estimates show that external forces and complementarity with other management practices are particularly relevant to increase the adoption of relatively new and radical technologies: relationships with other firms and institutions, local public funding, group membership are the key factors in this sense. Training is also positively related to EI, confirming recent evidence. The role of ETS on EI seems instead to be weak, but it turns out to be significant for energy efficiency innovations and for consumption level/good related reductions of atmospheric and water emissions.

Suggested Citation

  • Simone Borghesi & Giulio Cainelli & Massimiliano Mazzanti, 2012. "European Emission Trading Scheme and environmental innovation: an empirical analysis using CIS data for Italy," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 71(1), pages 71-97, October.
    • Handle: RePEc:gde:journl:gde_v71_n1_p71-97
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    Citations

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    Cited by:

    1. Gilli, M. & Mazzanti, M. & Nicolli, F., 2013. "Sustainability and competitiveness in evolutionary perspectives: Environmental innovations, structural change and economic dynamics in the EU," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 45(C), pages 204-215.
    2. Chen Feng & Beibei Shi & Rong Kang, 2017. "Does Environmental Policy Reduce Enterprise Innovation?—Evidence from China," Sustainability, MDPI, vol. 9(6), pages 1-24, May.
    3. Francesco Crespi & Claudia Ghisetti & Francesco Quatraro, 2015. "Taxonomy of Implemented Policy Instruments to Foster the Production of Green Technologies and Improve Environmental and Economic Performance. WWWforEurope Working Paper No. 90," WIFO Studies, WIFO, number 58131.
    4. Gilli, Marianna & Mancinelli, Susanna & Mazzanti, Massimiliano, 2014. "Innovation complementarity and environmental productivity effects: Reality or delusion? Evidence from the EU," Ecological Economics, Elsevier, vol. 103(C), pages 56-67.
    5. Giampaolo Gabbi & Elisa Ticci, 2014. "Implications of financialisation for sustainability," Working papers wpaper47, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.
    6. Sanni, Maruf, 2018. "Drivers of eco-innovation in the manufacturing sector of Nigeria," Technological Forecasting and Social Change, Elsevier, vol. 131(C), pages 303-314.
    7. Siedschlag, Iulia & Meneto, Stefano & Tong Koecklin, Manuel, 2019. "Determinants of green innovations: Firm-level evidence," Papers WP643, Economic and Social Research Institute (ESRI).
    8. Francesco Crespi & Claudia Ghisetti & Francesco Quatraro, 2015. "Environmental and innovation policies for the evolution of green technologies: a survey and a test," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 5(2), pages 343-370, December.
    9. Cainelli, Giulio & Mazzanti, Massimiliano, 2013. "Environmental innovations in services: Manufacturing–services integration and policy transmissions," Research Policy, Elsevier, vol. 42(9), pages 1595-1604.
    10. Pérez-Pérez, Juan Fernando & Parra, Juan Felipe & Serrano-García, Jakeline, 2021. "A system dynamics model: Transition to sustainable processes," Technology in Society, Elsevier, vol. 65(C).
    11. Davide Antonioli & Simone Borghesi & Alessio D'Amato & Marianna Gilli & Massimiliano Mazzanti & Francesco Nicolli, 2014. "Analysing the Interactions of Energy and climate policies in a broad Policy ‘optimality’ framework. The Italian case study," SEEDS Working Papers 2514, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Aug 2014.

    More about this item

    Keywords

    environmental innovation; industrial sectors; ETS; innovation drivers; CIS data;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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