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End‐of‐pipe or cleaner production? An empirical comparison of environmental innovation decisions across OECD countries
Author(s) -
Frondel Manuel,
Horbach Jens,
Rennings Klaus
Publication year - 2007
Publication title -
business strategy and the environment
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.123
H-Index - 105
eISSN - 1099-0836
pISSN - 0964-4733
DOI - 10.1002/bse.496
Subject(s) - cleaner production , production (economics) , dominance (genetics) , environmental economics , business , emerging technologies , industrial organization , variety (cybernetics) , environmental impact assessment , economics , natural resource economics , environmental resource management , operations management , engineering , municipal solid waste , computer science , microeconomics , ecology , waste management , biochemistry , chemistry , artificial intelligence , biology , gene
While both fundamental types of abatement measure mitigate the adverse environmental impacts of production, cleaner production technologies are frequently more advantageous than end‐of‐pipe technologies for environmental and economic reasons. This paper analyzes a variety of factors that might enhance firms' propensity to implement cleaner production technologies instead of end‐of‐pipe technologies. On the basis of a unique facility‐level data set derived from a recent OECD survey, we find a clear dominance of cleaner production in seven OECD countries: 76.8% of the facilities report that they invest predominantly in cleaner production technologies, above all in new production processes, but not so much in new products. Based on a discrete choice model, our estimation results indicate that regulatory measures and the stringency of environmental policies are more important for end‐of‐pipe technologies, while cost savings, general management systems and specific environmental management tools tend to favor clean production. We conclude that improvements towards cleaner production may be reached by the continuous development and wider diffusion of these management tools. Improvements may also be stimulated by widening the cost gap between the two types of technology, for instance by additionally charging for waste and energy use. Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment.