Sunday, March 27, 2011

Innovation: How can governments boost green technologies?,3746,en_2649_37465_47343816_1_1_1_37465,00.html
Governments looking to boost their economies, create jobs and meet environmental targets see eco-innovation as part of the solution. Some subsidise research and development. Others stimulate demand by labelling energy efficient appliances and regulating against environmentally harmful products. All are looking for efficient policies to make it work.

Better Policies to Support Eco-innovation gives examples of what works well, and why, by comparing national strategies to develop and disseminate eco-innovation.

“With climate change and the depletion of natural resources threatening our future, we need to change the way we think, the way we live and the way we do business. We must develop new ideas and new technologies, and eco-innovation has a key role to play”, said OECD Secretary-General Angel GurrĂ­a.

The review notes that eco-innovation does not necessarily involve new knowledge or new technologies – it is as much about how and where we use existing technologies. Moreover, eco-innovation does not always start in the environmental domain. For example, carbon capture and storage technologies are largely based on technologies tested in the 1920s in the chemical sector.

Governments need to increase co-ordination amongst ministries and levels of government in order to promote eco-innovation. A comprehensive national strategy for eco-innovation can help to do this. The report shows that such strategies must take into account the size of the domestic market for environmental goods and services, the national capacity to innovate, and the vigour of the country's venture capital industry.

Other variables have to be factored in for specific innovations. As an illustration, in the case of electric cars, where technological options are many and mutually exclusive, countries can choose to shift swiftly to full electric cars, or use hybrids as a transition. The decision will depend on the size of the domestic market, urban density and the share of renewables in electricity generation. This example also highlights that countries confronted with huge uncertainty regarding technologies, environmental benefits, demand patterns, costs and economic models for innovative goods, should cooperate to do more research and encourage trials and experiments to explore the full scope of alternative technical options.

Another feature of the report is the analysis of the interactions between policies to support eco-innovation and market dynamics. The push for improved carbon capture and storage (CCS) provides a good illustration. In Canada, mature technologies are used by the oil and gas industry to enhance their operating efficiency. In Germany, where there is a price on carbon emissions, the power sector developed innovative CCS technologies to reduce the CO2 emitted by coal-fired power plants. France, where no gas is produced and power is predominantly generated through nuclear industry, has yet another economic interest in developing CCS technologies – it sells them to other countries.

The report is available at,3746,en_2649_34333_47305250_1_1_1_1,00.html
Organization for Economic Cooperation and Development
Press Release dated March 21, 2011

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