Indicators for environmental innovation: what and how to measure

Environmental innovation is encouraged by many factors, including government regulation and subsidies, business opportunities for clean production, and the adoption by firms of an environmental ethic in response to public pressure. By the late 1980s environmental management had become an integral part of the corporate strategy of many firms in developed countries, diffusing increasingly also in developing countries. This brought into focus the potential economic benefits of environmental innovation from reduced material inputs and a shift away from end-of-pipe treatment solutions to preventive solutions.' However, despite the economic value of environmental innovation for industry and its potential societal benefits, there are only a few internationally comparable indicators2 on the prevalence of environmental innovation, the factors that influence it and its economic effects. This shortage hampers the ability to design policies to encourage economically efficient environmental innovation and to track progress towards enviromnental goals.