Industry eco-innovation strategies for process upgrading: systemic limits of internalising externalities

ABSTRACT

Industry has been upgrading its production processes through eco-innovation combining environmental and economic benefits, thus reducing some resource burdens which otherwise lie outside economic accounting. Some companies have shown interest in evaluating investment options for resource burdens and total value added across a whole-system value chain. Our EC research project developed a method for whole-system assessment of eco-innovation with multi-stakeholder cooperation. In three cases presented here, tensions arise among various aims, resource burdens, system levels, beneficiaries and timescales, thus complicating the concept of eco-innovation as a win–win strategy. Radical eco-innovation would depend on extra functions, value-chain actors and resource usages which can provide greater overall benefits. But such investment faces many systemic obstacles. Eco-innovation remains path dependent, thus limiting the scope to internalise environmental externalities. The tensions and difficulties cast doubt on an EC strategy emphasising uptake of eco-innovative technologies as the means to decouple economic growth from resource burdens.

KEYWORDS:

• Industry strategy
• process upgrading
• whole-system (meso-level)
• eco-innovation
• value chain

Acknowledgements

‘EcoWater: meso-level eco-efficiency indicators to assess technologies and their uptake in water use sectors’ is a collaborative research project of the 7th Framework Programme, grant agreement no. 282882, coordinated by the National Technical University of Athens (NTUA), http://environ.chemeng.ntua.gr/EcoWater. Each case study was carried out by a co-author as follows: Arla (DHI), Volvo (IVL), cogeneration (Deltares).

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes on contributors

Les Levidow is a Senior Research Fellow at the Open University, UK, where he has been studying agri-food and environmental resource issues since the late 1980s. His research topics have included the following: sustainable development, agri-food-energy innovation, agricultural research priorities, governance, European integration, regulatory expertise, scientific uncertainty, and the precautionary principle.

Michiel Blind works at Deltares, an independent, institute for applied research in the field of water, subsurface and infrastructure.

Palle Lindgaard-Jørgensen works at Danish Hydraulic Institute (DHI), an independent, international consulting and research organisation.

Åsa Nilsson works at IVL Swedish Environmental Research Institute, an independent, non-profit research institute, owned by a foundation jointly established by the Swedish government and Swedish industry.

Sara Alongi Skenhall worked at IVL Swedish Environmental Research Institute, an independent, non-profit research institute, owned by a foundation jointly established by the Swedish government and Swedish industry.