Eco-Innovation and Emissions Trading: a sector analysis for European countries
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Abstract
This article aims to assess the impact of a specific regulation, namely the European Union emission
trading system (EU-ETS), on the Eco-Innovation (EI) activities of the companies, to assess its
effectiveness in changing the companies’ environmental behavior. It also intendsto empirically examine
whether the EU-ETS and its ‘stringency’ are significantly related to EI, taking into account both the
internal and external factors that might be correlated with EI. To this end, we develop a cross-sectional
framework using the Community Innovation Survey (CIS) data and by creating a stringency indicator for
the period between 2012-2014 for 13 European countries. We found that the EU-ETS has limited and
some controversial effects. Furthermore, technology policies emerge as an important element of the
policy mix complementing climate policy. Based on our findings, we make recommendations for
policymakers on how to improve the existing policy mix.
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