The Environment as a Driver of Innovation and Economic Change

The paper outlines recent developments in the economics of environmental innovation (EI). Global climate policies and their consequences on the world economy triggered an extensive work by economists in both evaluating the costs and the benefits of such policies and providing influential suggestions for policy design. A key point of the economics debate is the role of technological innovation. Although the issue is far from being new in economic analysis, at least two new elements stimulate new interest to the EI research debate. The first is the inclusion of EI among the top priorities of public policies and industrial strategies, and the allocation of significant innovation resources to this aim. The second is the recent developments of various, mostly applied, research programs addressing the drivers, the mechanism and the consequences of EI, in particular at the micro- and meso-economic level. These research programs, which address the so called «Porter's hypothesis», the dynamic efficiency of environmental policy instruments, the adoption of different EIs by companies, in particular in systems of SMEs, the use of NAMEA for EI-related analyses, the formal EI activity (patents) as possibly induced by policy, are shortly reviewed with reference to selected recent contributions.