TECHNICAL INNOVATION AND ENVIRONMENTAL-PROTECTION - ENVIRONMENTAL-POLICY RECONSIDERED - THE ROLE OF TECHNOLOGICAL INNOVATION

This paper discusses recent environmental policy wisdom in the light o f technological and organizational innovation. Starting from empirical evidence, it argues that the main econometric models which are used i n environmental policy analysis do not consider properly the determina nts and effects of innovation, and offer unreliable estimates of polic y effects. Some solutions to the latter problem show that the integrat ion between environmental policy and industrial policy can be more eff icient than traditional environmental policies in the protection of th e environment. Technological cooperation, moreover, can be an importan t instrument to stabilize international environmental agreements.