Carrot first, stick second? Environmental policy-mix sequencing and green technologies

Eco-innovations are considered key in the transition towards a more sustainable economy. However, since there are several barriers to the adoption of eco-innovations, different instruments have been proposed to encourage their uptake, leading to instrument mixes. Analysis of these mixes has been sca...

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Autores: Tchórzewska, Kinga Barbara, Río González, Pablo del, Garcia-Quevedo, Jose, Martínez-Ros, Ester
Formato: artículo
Estado:Versión aceptada para publicación
Fecha de publicación:2025
País:España
Recursos:Universidad de Barcelona
Repositorio:Dipòsit Digital de la UB
OAI Identifier:oai:diposit.ub.edu:2445/220366
Acesso em linha:https://hdl.handle.net/2445/220366
Access Level:acceso embargado
Palavra-chave:Política ambiental
Biotecnologia
Química verda
Enginyeria ambiental
Environmental policy
Biotechnology
Green chemistry
Environmental engineering
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spelling Carrot first, stick second? Environmental policy-mix sequencing and green technologiesTchórzewska, Kinga BarbaraRío González, Pablo delGarcia-Quevedo, JoseMartínez-Ros, EsterPolítica ambientalBiotecnologiaQuímica verdaEnginyeria ambientalEnvironmental policyBiotechnologyGreen chemistryEnvironmental engineeringEco-innovations are considered key in the transition towards a more sustainable economy. However, since there are several barriers to the adoption of eco-innovations, different instruments have been proposed to encourage their uptake, leading to instrument mixes. Analysis of these mixes has been scarce in the eco-innovation literature and mostly focused on static rather than dynamic combinations of instruments. This paper tries to cover this gap by assessing the <em>sequencing</em> of instruments to promote eco-innovation. To that aim we use a panel database of investments in green technologies by Spanish firms between 2010–2020. Our results show that the order in which the instruments are introduced (sequencing) affects the adoption of eco-innovation, although the effective sequencing effect slightly differs for different environmental technological innovation types (cleaner production vs. end-of-pipe). In both cases, using subsidies (“carrots”) first and then using environmental taxes (“sticks”) positively and significantly influence the adoption of environmental technologies. Results from heterogeneous analysis confirms that this is especially true for small and medium firms. Within carrots, it seems tax credits and subsidies are substitutes, whatever the sequence of their introduction is. These results have clear policy implications which cannot be derived from analyses of static policy mixes. They suggest that, if the aim is to promote the adoption of eco-innovations, carrots should be used first, and then sticks should be adopted. In addition, it warns against using tax credits and subsidies together, given their redundancy in promoting eco-innovation. If subsidies are introduced after tax credits have already been applied (or the other way around), substantial inefficiencies can be expected, increasing the costs of eco-innovation promotion without any added value in terms of effectiveness.Elsevier2025info:eu-repo/semantics/articleinfo:eu-repo/semantics/acceptedVersionapplication/pdfhttps://hdl.handle.net/2445/220366Articles publicats en revistes (Economia)reponame:Dipòsit Digital de la UBinstname:Universidad de BarcelonaInglésVersió postprint del document publicat a: https://doi.org/https://doi.org/10.1016/j.techfore.2024.123835Technological Forecasting and Social Change, 2025, vol. 210https://doi.org/https://doi.org/10.1016/j.techfore.2024.123835cc-by-nc-nd (c) Elsevier, 2025http://creativecommons.org/licenses/by-nc-nd/4.0/info:eu-repo/semantics/embargoedAccessoai:diposit.ub.edu:2445/2203662026-05-27T06:46:51Z
dc.title.none.fl_str_mv Carrot first, stick second? Environmental policy-mix sequencing and green technologies
title Carrot first, stick second? Environmental policy-mix sequencing and green technologies
spellingShingle Carrot first, stick second? Environmental policy-mix sequencing and green technologies
Tchórzewska, Kinga Barbara
Política ambiental
Biotecnologia
Química verda
Enginyeria ambiental
Environmental policy
Biotechnology
Green chemistry
Environmental engineering
title_short Carrot first, stick second? Environmental policy-mix sequencing and green technologies
title_full Carrot first, stick second? Environmental policy-mix sequencing and green technologies
title_fullStr Carrot first, stick second? Environmental policy-mix sequencing and green technologies
title_full_unstemmed Carrot first, stick second? Environmental policy-mix sequencing and green technologies
title_sort Carrot first, stick second? Environmental policy-mix sequencing and green technologies
dc.creator.none.fl_str_mv Tchórzewska, Kinga Barbara
Río González, Pablo del
Garcia-Quevedo, Jose
Martínez-Ros, Ester
author Tchórzewska, Kinga Barbara
author_facet Tchórzewska, Kinga Barbara
Río González, Pablo del
Garcia-Quevedo, Jose
Martínez-Ros, Ester
author_role author
author2 Río González, Pablo del
Garcia-Quevedo, Jose
Martínez-Ros, Ester
author2_role author
author
author
dc.subject.none.fl_str_mv Política ambiental
Biotecnologia
Química verda
Enginyeria ambiental
Environmental policy
Biotechnology
Green chemistry
Environmental engineering
topic Política ambiental
Biotecnologia
Química verda
Enginyeria ambiental
Environmental policy
Biotechnology
Green chemistry
Environmental engineering
description Eco-innovations are considered key in the transition towards a more sustainable economy. However, since there are several barriers to the adoption of eco-innovations, different instruments have been proposed to encourage their uptake, leading to instrument mixes. Analysis of these mixes has been scarce in the eco-innovation literature and mostly focused on static rather than dynamic combinations of instruments. This paper tries to cover this gap by assessing the <em>sequencing</em> of instruments to promote eco-innovation. To that aim we use a panel database of investments in green technologies by Spanish firms between 2010–2020. Our results show that the order in which the instruments are introduced (sequencing) affects the adoption of eco-innovation, although the effective sequencing effect slightly differs for different environmental technological innovation types (cleaner production vs. end-of-pipe). In both cases, using subsidies (“carrots”) first and then using environmental taxes (“sticks”) positively and significantly influence the adoption of environmental technologies. Results from heterogeneous analysis confirms that this is especially true for small and medium firms. Within carrots, it seems tax credits and subsidies are substitutes, whatever the sequence of their introduction is. These results have clear policy implications which cannot be derived from analyses of static policy mixes. They suggest that, if the aim is to promote the adoption of eco-innovations, carrots should be used first, and then sticks should be adopted. In addition, it warns against using tax credits and subsidies together, given their redundancy in promoting eco-innovation. If subsidies are introduced after tax credits have already been applied (or the other way around), substantial inefficiencies can be expected, increasing the costs of eco-innovation promotion without any added value in terms of effectiveness.
publishDate 2025
dc.date.none.fl_str_mv 2025
dc.type.none.fl_str_mv info:eu-repo/semantics/article
info:eu-repo/semantics/acceptedVersion
format article
status_str acceptedVersion
dc.identifier.none.fl_str_mv https://hdl.handle.net/2445/220366
url https://hdl.handle.net/2445/220366
dc.language.none.fl_str_mv Inglés
language_invalid_str_mv Inglés
dc.relation.none.fl_str_mv Versió postprint del document publicat a: https://doi.org/https://doi.org/10.1016/j.techfore.2024.123835
Technological Forecasting and Social Change, 2025, vol. 210
https://doi.org/https://doi.org/10.1016/j.techfore.2024.123835
dc.rights.none.fl_str_mv cc-by-nc-nd (c) Elsevier, 2025
http://creativecommons.org/licenses/by-nc-nd/4.0/
info:eu-repo/semantics/embargoedAccess
rights_invalid_str_mv cc-by-nc-nd (c) Elsevier, 2025
http://creativecommons.org/licenses/by-nc-nd/4.0/
eu_rights_str_mv embargoedAccess
dc.format.none.fl_str_mv application/pdf
dc.publisher.none.fl_str_mv Elsevier
publisher.none.fl_str_mv Elsevier
dc.source.none.fl_str_mv Articles publicats en revistes (Economia)
reponame:Dipòsit Digital de la UB
instname:Universidad de Barcelona
instname_str Universidad de Barcelona
reponame_str Dipòsit Digital de la UB
collection Dipòsit Digital de la UB
repository.name.fl_str_mv
repository.mail.fl_str_mv
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score 15,812429

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