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Promoting Technological Environmental Innovations: What is the Role of Environmental Regulation?
Abstract
This chapter reviews and discusses the debate over the effectiveness of environmental regulation in promoting industrial Technological Environmental Innovation (TEI). Using the innovation-friendly regulatory principles adapted from Porter and van der Linde (1995a and 1995b), this chapter demonstrates how properly designed and implemented environmental regulation (TEI promoting regulation) has played a critical role in promoting TEI in the transport industry in California and Hong Kong. In both cases, it has been shown that stringent environmental regulations that send clear and strong signals for future environmental performance requirements are critical in promoting TEIs in the public transport industries. Unlike traditional command-and-control regulations, TEI promoting regulations are strongly supported by incentive and capability-enhancing measures.
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