Environmental Engineering Reference
In-Depth Information
term or uncertain (radical TEIs). Other regulatory
characteristics such as information about the mag-
nitude and cost of pollution control, flexibility in
choosing which technology can be used to meet the
regulatory targets, and the demonstration of key
short-term economic benefits are also important
in spearheading incremental TEIs. In addition,
empirical studies on industrial environmental in-
novation in the United Kingdom (Gouldson and
Murphy, 1998), European countries (Klemmer,
Lehr and Lobbe, 1999; Hitchens et al., 2000)
and the United States (Porter and van der Linde,
1995a and 1995b; Ashford, 2000, 2002; Fiorino,
2006) have consistently highlighted that regulatory
pressure is a key factor in motivating industries
to adopt new environmental technologies and
initiatives. Some may consider economic instru-
ments a better alternative to direct environmental
regulation. However, economic instruments alone,
such as tax exemptions, may actually “result in
fewer incentives to innovate than direct environ-
mental regulation. The tax rate is often set at a
low level in order not to impose excessively high
costs on the industry” (Mickwitz, Hyvattinen and
Kivimaa, 2008: 168). If an economic instrument
does not impose a cost on alternative solutions, it
can do little to promote environmental innovation
(Mickwitz, Hyvattinen and Kivimaa, 2008). On
the other hand, direct environmental regulations
that are properly designed, for instance, envi-
ronmental regulations with high stringency and
high anticipation for standard tightening, have
been effective in stimulating companies to pursue
TEIs to gain competitive advantage (Mickwitz,
Hyvattinen and Kivimaa, 2008).
The significance of properly designed envi-
ronmental regulation in steering environmental
innovation was illustrated in a review study which
examined the effects of policy instruments on en-
vironmental innovation (Ekins and Venn, 2006).
Among the five case studies of policy effects on
steering energy efficiency-related environmental
innovations, four of them based in USA, Japan
and Germany were strongly driven by direct en-
vironmental regulations and achieved excellent
results. Policy instruments included stringent
environmental regulations, increasing regulatory
standards and mandatory public procurements. In
these four cases, strong environmental regulations
emerged as either standalone policy instruments
or policy instruments coupled with market-based
economic instruments (Ekins and Venn, 2006).
The theoretical and empirical studies cited
above have demonstrated that environmental
regulation is effective in exerting pressure on
and steering the industry to adopt TEI and can-
not simply be ignored or replaced by other policy
instruments. The focus of the study is not whether
environmental regulation is needed or not. The
crucial question is:
How can regulations be de-
signed and implemented in a way that promotes
TEIs?
However, few studies have provided a sys-
temic account of what design and implementation
characteristics have led to successful innovation
and diffusion of environmental technologies. To
bridge the gap, this paper will assess how well
the set of regulation characteristics described in
Porter and van der Linde (1995a and 1995b) and
Ashford (2000) have facilitated the promotion
of TEI. In the following section, 12 regulatory
characteristics will be provided based on Porter
and van der Linde (1995a and 1995b) and Ashford
(2000). They will be used to evaluate two success-
ful cases of transport environmental technology
regulation presented later in the paper.
CHARACTERISTICS OF TEI
PROMOTING REGULATIONS
Porter and van der Linde (1995a, 1995b) argued
that a properly designed innovation-oriented
environmental regulation should possess the fol-
lowing characteristics.
