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The contribution of natural resources and ecosystems to economic processes still remains under-assessed by market evaluation and productivity analysis. Following the historical lines of the classical productivity debate ranging from the French Physiocrats to early neoclassical growth theories, the productivity concept underwent a gradual transformation from its previous understanding based on natural resources and other environmental factors to its contemporary narrow notion. This paper claims that the course of the classical debate has shaped the scope of predominant contemporary analysis. Except for some very recent findings, multifactor productivity largely focusses on a two-factor model. Material Flow Analysis (MFA) provides a useful step for widening the measurement and notion of productivity.
The article analyses Japanese approaches to dealing with eco-efficiency from an institutional perspective. Our main outlook is that though promising attempts have been made despite the overall economic crisis, a better horizontal coordination among both administrations and businesses is required. The governance processes can be analysed following approaches developed by New Institutional Economics and related policy analysis. The paper is divided into three sections. The first introduces the concept of eco-efficiency and explains the demand for regulatory policies from theories of market failures; the paper argues in favour of innovationoriented regulation. The second examines how a nation's institutional capabilities influence knowledge generation towards new solutions that sell on the markets; the "capacity-building approach" as developed by Martin Jänicke is explicitly discussed. The third section discusses contemporary Japanese policies with regard to waste, energy and material flows both on the governmental and the business level. It explains how European approaches diffuse and merge with domestic Japanese institutions. However, governance of eco-efficiency is expected to continue to differ due to ongoing national differences and specific conditions of knowledge creation.
The paper sketches out a theoretical framework for analysing the interplay between eco-efficiency, cognition and institutions. It derives from analytical shortfalls of the prevailing literature, which features strongly engineering and business economics, by using insights from New Institutional Economics, from Cognitive Sciences and, partly, from Evolutionary Economics. It emphasises the role cognition and institutions play in the adoption of "green" technologies by firms. A cognitive perspective derives from recent research on simple heuristics and context-based rationality; it is proposed that those recent findings can serve to analyse decision-making of individual actors or firms and, thus, should complement economic analysis. A second proposition is that eco-efficiency and normative rules such as a Factor Four strongly rely upon institutions, i.e. the ability of institutions to evolve over time and the development of those institutions that are most appropriate to enhance technological change. In this regard, business institutions and competition are crucial, but regulatory needs remain in order to safeguard continuity of knowledge creation. The framework allows for an analysis why overall adoption of eco-efficiency still can be considered relatively slow and why some markets and firms are far ahead. As a brief case study the article reflects upon German waste law’s ability to enhance eco-efficiency.
The main objective of AIRP-SD was to address the urgent need to stimulate innovation in Research, Technological development and Demonstration (RTD) processes in order to enhance the prospects of RTD contributing positively to processes and strategies leading to radical improvements in the sustainability of production-consumption systems. This Milestone One Report was the first of three status reports, summarising the interim findings of the first three work packages since the start of the project in January 2002.
The paper sketches out a theoretical framework for analysing the interplay between eco-efficiency, cognition and institutions. It derives from analytical shortfalls of the prevailing literature, which features strongly engineering and business economics, by using insights from New Institutional Economics, from Cognitive Science and, partly, from Evolutionary Economics. It emphasises the role cognition and institutions play in the adoption of "green" technologies by firms. A cognitive perspective derives from recent research on simple heuristics and context-based rationality; it is proposed that those findings can serve to analyse decision-making of individual actors respectively firms and, thus, should complement economic analysis. A second proposition is that eco-efficiency and normative rules such as a Factor Four strongly rely upon institutions, i.e. the ability of institutions to evolve over time and the development of those institutions that are most appropriate to enhance technological change. In this regard, business institutions and competition are crucial, but regulatory needs remain in order to safeguard continuity of knowledge creation. The framework allows for an analysis why overall adoption of eco-efficiency still can be considered relatively slow and why some markets and firms are far ahead. As a brief case study the article reflects upon German waste law's ability to enhance eco-efficiency.
The paper explores a framework for analysing governance towards sustainable development. Departing from the thesis about a possible positive role for corporate action, it refers to recent theorizing about both market and government failures. Discussing externalities, public goods, information and adaptation deficits, as well as bureaucracies' self-interest, corruption and capture of the regulator, the paper stresses the importance of governance aiming at synergies between corporate and political governance. Concerning framework conditions, it outlines principles of regulated self-regulation. Following the thesis about a positive role, the paper adds recent insights about theories of the knowledge-based firm, which help to analyse market evolution. In this context, it outlines the concept of "responsible corporate governance". Because governance involves actors in their daily operations and certainly goes beyond setting a frame, the paper finally discusses innovation-inducing regulation, serving complementary functions to a framework and business operations. The conclusion is drawn that governments' main function is to facilitate learning processes, thus departing from states' function as known from welfare economics. Thus, governance will have to be explored as collective learning, involving business, governments, and civil societies’ actors.
This article proposes a policy framework for analysing corporate governance toward sustainable development. The aim is to set up a framework for analysing market evolution toward sustainability. In the first section, the paper briefly refers to recent theories about both market and government failures that express scepticism about the way that framework conditions for market actors are set. For this reason, multi-layered governance structures seem advantageous if new solutions are to be developed in policy areas concerned with long-term change and stepwise internalisation of externalities. The paper introduces the principle of regulated self-regulation. With regard to corporate actors| interests, it presents recent insights from theories about the knowledge-based firm, where the creation of new knowledge is based on the absorption of societal views. The result is greater scope for the endogenous internalisation of externalities, which leads to a variety of new and different corporate strategies. Because governance has to set incentives for quite a diverse set of actors in their daily operations, the paper finally discusses innovation-inducing regulation. In both areas, regulated self-regulation and innovation-inducing regulation, corporate and political governance co-evolve. The paper concludes that these co-evolutionary mechanisms may assume some of the stabilising and orientating functions previously exercised by framing activities of the state. In such a view, the government's main function is to facilitate learning processes, thus departing from the state's function as known from welfare economics.
This book presents important new research on applied eco-efficiency concepts throughout Europe. The aim of eco-efficiency is to achieve market-based measures of environmental protection, in order to enhance the prospects for sustainable development and achieve positive economic and ecological benefits. The distinguished authors discuss a number of themes surrounding eco-efficiency including the necessary conditions for technological dissemination and ecological modernization, and the role of government in enabling businesses and society to participate actively in this process. In particular, they highlight the application of existing European-based policies concerning material flows and energy. The authors also investigate some new concepts of sustainable development and provide a useful introduction to material flows analysis. In further chapters they study the emerging regulatory policies for eco-efficiency, and examine the issues of sustainable business and consumption strategies.
Bridging the data gap
(2004)
The book contains the proceedings of INFER annual conference 2004, organized at the Wuppertal Institute in Germany. Within the area of environmental economics, methodological issues now seem at stake. This is because recent methods and fields of economics, like institutional economics, competition (industrial) economics, and cognitive economics, should be applied and become more established within environmental economics. The different papers address this challenge via different case studies in areas such as agriculture, biodiversity, eco-taxes, subsidies, wind energy, environmental corruption, governance, contracts, international trade, human behavior, and many others.
Integrated systems analysis
(2007)
This book considers corporate governance of sustainability from a co-evolutionary perspective. It explores the linkages between pro-active approaches at the corporate level, market-based incentives and environmental networks involving various actors. Relevant theory on corporate governance, competition, market failures and regulatory tools is also examined. The authors go on to present an assessment methodology suitable for empirical network analysis at the meso-level, and demonstrate its application using eight case studies. Based on these research results, Raimund Bleischwitz and his team draw important conclusions regarding policy analysis, sustainability assessment and the actors involved.
Global resource management : conflict potential and characteristics of a global governance regime
(2007)
Approaches to address unsustainable ways of societal development constantly proliferate, but total consumption of resources and aggregate environmental impacts continue rising. This could partially be explained by weak attempts to develop comprehensive sustainability strategies that address the entire life cycle of products and especially resource extraction and use phases. This paper seeks to explore to what extent these life cycle stages and associated impacts are taken into account when various actors employ life cycle thinking and how these concerns can be better attended to in policy-making, business strategies and lifestyle choices. To accomplish this, we evaluate the efforts of the main stakeholders in reaching sustainable consumption and sustainable resource management, and impediments to further progress, and study whether and how deficits in these phases coincide and can potentially contribute to more holistic practical realization of life cycle thinking. We demonstrate that new approaches are needed to be able to tackle the international dimension of production and consumption.
The Wuppertal Institute for Climate, Environment and Energy and the UNEP/Wuppertal Institute Collaborating Centre on Sustainable Consumption and Production (CSCP) set out to analyse Japanese dematerialisation and resource efficiency strategies within the 3R scope and searched for options of enhancing resource effi ciency strategies, commissioned by the German Federal Environment Agency. A further task of the project was to initiate a policy dialogue including stakeholders, academia, politics and Japanese and European environmental experts. The following paper summarises findings from the analyses, the results of the policy dialogues (Experts Workshop, 6 June 2007 and International Conference, 6 November 2007) and draws conclusions for a potential Japanese-European cooperation on the resource efficiency issue.
This article introduces elements of a global governance regime for sustainable resource management. It argues that such an approach is needed to combat the negative impacts arising from resource extraction and use as well as to overcome the co‐ordination problems of decentralized action. A first section summarizes main conflicts arising from limited access to natural resources and security of supply, environmental impacts and the performance of resource‐rich developing countries. A second section analyses existing initiatives for sustainable resource management such as resource funds, efforts to increase transparency, programmes in development co‐operation, standards and certification, material efficiency and resource productivity as well as efforts to limit the consumption of natural resources. Though these initiative have their merits, the article concludes that more systematic institutional mechanisms are needed. The third section introduces those institutional mechanisms: it describes the International Panel for Sustainable Resource Management (launched in November 2007), outlines elements of an international convention on sustainable resource management, develops the agenda for an international agency on the issue and discusses the interaction with existing international bodies such as the World Trade Organization. Written as a policy paper, the paper formulates proposals for various actors, from small‐scale miners to large‐scale global companies and governments. Its intention is to stimulate the debate and to broaden the horizon on the global dimension of using minerals.
The policy framework for the promotion of hydrogen and fuel cells in Europe : a critical assessment
(2008)
Sustainable management of natural resources is a crucial element for a sustainable development, but also a precondition for economic growth. The book analyses raw materials supply and resource use in a global context. The contributions present state-of-the art results and perspectives on the availability of resources. They discuss factors such as demand from emerging and other countries as well as critical shortage of some materials together with the resulting consequences for economies. It also gives new views and perspectives on the sustainable growth in ermerging economies and examines the possibilities and experiences concerning the decoupling of resource use from economic growth. Moreover, it offers cross-country comparisons with emphasis on emerging countries. A key focus is placed on China regarding its domestic energy, climate and resource policy but also its developing foreign policy in Africa.
Sustainable Resource Management is the result of longlasting exhaustive research by the Wuppertal Institute. Looking at material flows, industrial and societal metabolism and their implications for the economy, this new book provides radical perspectives on how the global economy should use natural resources in intelligent ways that maximise well-being without destroying lifesupporting ecosystems. It presents a vision of the future and the fundamental elements necessary for the sustainable management of the Earth's resources. It argues that the need to manage the use of our natural resources at a sustainable level can be shaped into a great opportunity for innovation and for new institutions to govern change.
The paper aims to shed light on the methodological challenges of GHG monitoring at local level and to give an overview on current practices. Questions addressed are as follows: How do the methodologies which underlie different GHG inventory tools differ? What are the critical variables explaining differences between inventories? Can different GHG inventory tools be compatible - and/or interoperable - and under which conditions? The first section discusses methodological challenges related to the formation of local GHG inventories. Rather than giving a comprehensive overview on methodological problems, this section mainly highlights some of the central methodological challenges posed by local GHG inventories. This overview identifies critical variables and clarifies concepts that are necessary for the understanding of the subsequent analysis. In section two, some of the most advanced GHG inventory tools are analysed and the most important differences between these tools are highlighted. The paper concludes that the methodologies are not consistent. Local GHG inventories can thus hardly be compared. The paper gives research and policy recommendations towards greater comparability and sketches the requirements of an international protocol on urban GHG inventories.
This paper reviews the current EU policy framework in view of its impact on hydrogen and fuel cell development. It screens EU energy policies, EU regulatory policies and EU spending policies. Key questions addressed are as follows: to what extent is the current policy framework conducive to hydrogen and fuel cell development? What barriers and inconsistencies can be identified? How can policies potentially promote hydrogen and fuel cells in Europe, taking into account the complex evolution of such a potentially disruptive technology? How should the EU policy framework be reformed in view of a strengthened and more coherent approach towards full deployment, taking into account recent technology-support activities? This paper concludes that the current EU policy framework does not hinder hydrogen development. Yet it does not constitute a strong push factor either. EU energy policies have the strongest impact on hydrogen and fuel cell development even though their potential is still underexploited. Regulatory policies have a weak but positive impact on hydrogen. EU spending policies show some inconsistencies. However, the large-scale market development of hydrogen and fuel cells will require a new policy approach which comprises technology-specific support as well as a supportive policy framework with a special regional dimension.
This paper undertakes a step to explaining the international economics of resource productivity. It argues that natural resources are back on the agenda for four reasons: the demand on world markets continues to increase, the environmental constraints to using resources are relevant throughout their whole life cycle, the access to critical metals could become a barrier to the low carbon economy, and uneven patterns of use will probably become a source of resource conflicts. Thus, the issue is also of relevance for the transition to a low carbon economy. "Material Flow Analysis" is introduced as a tool to measure the use of natural resources within economies and internationally; such measurement methodology now is being harmonized under OECD auspices. For these reasons, the paper argues that resource productivity - that is the efficiency of using natural resources to produce goods and services in the economy - will become one of the key determinants of economic success and human well-being. An empirical chapter gives evidence on time series of resource productivity increases across a number of economies. Introducing the notion of "material flow innovation", the paper also discusses the innovation dynamics and issues of competitiveness. However, as the paper concludes, market barriers make a case for effective resource policies that should provide incentives for knowledge generation and get the prices right.
The papers for this special issue were originally contributed to the 2nd International Wuppertal Colloquium on "Sustainable Growth, Resource Productivity and Sustainable Industrial Policy - Recent Findings, new Approaches for Strategies and Policies" that was held from 10 to 12 September 2009 in Wuppertal, Germany. The intensive discussion during the Colloqium and the subsequent rigorous review process have helped to facilitate this process - we wish to thank all participants and contributers, as well as Sevan Hambarsoomian and Deniz Erdem for administrative support.
This article addresses informational barriers to energy efficiency. It is a widely acknowledged result that an energy efficiency gap exists implying that the level of energy efficiency is at an inefficiently low level. Several barriers to energy efficiency create this gap and the presence of asymmetric information is likely to be one such barrier. The article finds that problems of moral hazard and adverse selection indeed can help explain the seemingly low levels of energy efficiency. The theory reveals two implications to policies on energy efficiency. First, the development of measures to enable contractual parties to base remuneration on energy performance must be enhanced, and second, the information on technologies and the education of consumers and installers on energy efficiency must be increased. Finally, it is found that the preferred EU policy instrument on energy efficiency, so far, seems to be the use of minimum requirements. Less used in EU legislation is the use of measuring and verification as well as the use of certifications. Therefore, it is concluded that the EU should consider an increased use of these instruments.
Human societies face a threatening future of resource scarcity and environmental damages. This book addresses the challenge of turning these risks into opportunities and policies. It is a collection of high level contributions from experts of sustainable growth and sustainable resource management. Focussing on economics, sustainability, technology and policy, the book highlights system innovation, leapfrogging strategies of emerging economies, possible rebound effects and international market development. It puts natural resources centre stage and will make an important contribution to achieving the goal of a 21st century Green Economy.
Resource-efficient construction : the role of eco-innovation for the construction sector in Europe
(2011)
As illustrated by the case studies of end-of-life vehicles and waste electric and electronic equipment, the approach of an extended producer responsibility is undermined by the exports of used and waste products. This fact causes severe deficits regarding circular flows, especially of critical raw materials such as platinum group metals. With regard to global recycling there seems to be a responsibility gap which leads somehow to open ends of waste flows and a loss or down-cycling of potential secondary resources. Existing product-orientated extended producer responsibility (EPR) approaches with mass-based recycling quotas do not create adequate incentives to supply waste materials containing precious metals to a high-quality recycling and should be amended by aspects of a material stewardship. The paper analyses incentive effects on EPR for the mentioned product groups and metals, resulting from existing regulations in Germany. It develops a proposal for an international covenant on metal recycling as a policy instrument for a governance-oriented framework to initiate systemic innovations along the complete value chain taking into account product group- and resource group-specific aspects on different spatial levels. It aims at the effective implementation of a central idea of EPR, the transition of a waste regime still focusing on safe disposal towards a sustainable management of resources for the complete lifecycle of products.
This paper analyses drivers for resource use and material productivity acrosscountries. This is not only relevant in light of soaring raw material prices but also because EU policies, such as the "Thematic Strategy on the Sustainable Use of Natural Resources" (COM [2005] 670), the EU Raw Materials Initiative (COM [2008] 699) and various similar policies internationally, seek to better manage materials along their life-cycle and across economies. In order to better understand the system dynamics of material use, our paper applies methodologies of material flow analysis and regression analysis to identify the major drivers for resource use and decoupling from GDP. Drivers are understood as those factors that exert influence on human activities to use resources. A panel data set is taken for the European Union for the years 1980–2000 (EU-15) and 1992–2000 (EU-25). The main drivers of resource use were found to be energy efficiency, new dwellings and roads construction activities. Shortcomings of the methodology are also discussed.