The paper shows the results of a study, which the Environmental Policy Research
Centre conducted in the context of the international research project:
“Resource productivity, environmental tax reform and sustainable growth in
Europe” (PETRE).1 PETRE is part of the Anglo-German Foundation research
policy initiative: Creating sustainable growth in Europe.2
The study focuses on the “eco-industry”, their function, structure and dynamics
in Germany and for Europe. It describes two faces of environmental industry: a
more traditional part of end-of-pipe treatment or “pollution management” and
the newer, fast growing part of eco-efficiency or “resource management”. The
study gives a general explanation to this rapid growth. For many reasons ecoefficient
innovation is a necessary condition for sustainable industrial growth.
The authors come to the conclusion that this industry so far has been underestimated
– not least because its dynamic creates big problems as regards statistical
definitions. To a large extent this is an “invisible industry”. In a second step
an explorative analysis of the German environmental industry – the most advanced
case in Europe – is done. Four selected parts of the environmental industry
are analysed together with the related policies and instruments: Green
power, eco construction (low energy buildings), fuel-efficient diesel cars and industrial
recycling. The description of co-benefits includes higher employment,
innovation and successful export. The explorative study shows the high importance
of economic instruments in combination with regulation. The price increase
of energy and raw materials plausibly has been important too. However, it
cannot explain the specifics of the German success case.
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