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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Detalhes bibliográficos
Autores: Tchorzewska, Kinga B., Río González, Pablo del, García Quevedo, José, Martínez Ros, Ester
Tipo de documento: artigo
Estado:Versión enviada para evaluación y publicación
Data de publicação:2025
País:España
Recursos:Consejo Superior de Investigaciones Científicas (CSIC)
Repositório:DIGITAL.CSIC. Repositorio Institucional del CSIC
OAI Identifier:oai:digital.csic.es:10261/391045
Acesso em linha:http://hdl.handle.net/10261/391045
Access Level:Acceso aberto
Palavra-chave:Environmental policy
Sequence
Green technologies
Environmental R&D
Environmental economics
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spelling Carrot first, stick second? Environmental policy-mix sequencing and green technologiesTchorzewska, Kinga B.Río González, Pablo delGarcía Quevedo, JoséMartínez Ros, EsterEnvironmental policyEnvironmental policySequenceGreen technologiesEnvironmental R&DEnvironmental economicsEco-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 sequencing 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.Peer reviewedElsevierMinisterio de Ciencia, Innovación y Universidades (España)Río González, Pablo del [0000-0002-1712-5198]Consejo Superior de Investigaciones Científicas [https://ror.org/02gfc7t72]202520252025info:eu-repo/semantics/articlehttp://purl.org/coar/resource_type/c_6501Preprintinfo:eu-repo/semantics/submittedVersionhttp://hdl.handle.net/10261/391045reponame:DIGITAL.CSIC. Repositorio Institucional del CSICinstname:Consejo Superior de Investigaciones Científicas (CSIC)Inglés#PLACEHOLDER_PARENT_METADATA_VALUE##PLACEHOLDER_PARENT_METADATA_VALUE#info:eu-repo/grantAgreement/AEI/Plan Estatal de Investigación Científica y Técnica y de Innovación 2021-2023/PID2021-126153NB-I00info:eu-repo/grantAgreement/MICIU//RTI2018-100710-B-100https://doi.org/10.1016/j.techfore.2024.123835Síinfo:eu-repo/semantics/openAccessoai:digital.csic.es:10261/3910452026-05-22T06:33:51Z
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
Tchorzewska, Kinga B.
Environmental policy
Environmental policy
Sequence
Green technologies
Environmental R&D
Environmental economics
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 Tchorzewska, Kinga B.
Río González, Pablo del
García Quevedo, José
Martínez Ros, Ester
author Tchorzewska, Kinga B.
author_facet Tchorzewska, Kinga B.
Río González, Pablo del
García Quevedo, José
Martínez Ros, Ester
author_role author
author2 Río González, Pablo del
García Quevedo, José
Martínez Ros, Ester
author2_role author
author
author
dc.contributor.none.fl_str_mv Ministerio de Ciencia, Innovación y Universidades (España)
Río González, Pablo del [0000-0002-1712-5198]
Consejo Superior de Investigaciones Científicas [https://ror.org/02gfc7t72]
dc.subject.none.fl_str_mv Environmental policy
Environmental policy
Sequence
Green technologies
Environmental R&D
Environmental economics
topic Environmental policy
Environmental policy
Sequence
Green technologies
Environmental R&D
Environmental economics
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 sequencing 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
2025
2025
dc.type.none.fl_str_mv info:eu-repo/semantics/article
http://purl.org/coar/resource_type/c_6501
Preprint
info:eu-repo/semantics/submittedVersion
format article
status_str submittedVersion
dc.identifier.none.fl_str_mv http://hdl.handle.net/10261/391045
url http://hdl.handle.net/10261/391045
dc.language.none.fl_str_mv Inglés
language_invalid_str_mv Inglés
dc.relation.none.fl_str_mv #PLACEHOLDER_PARENT_METADATA_VALUE#
#PLACEHOLDER_PARENT_METADATA_VALUE#
info:eu-repo/grantAgreement/AEI/Plan Estatal de Investigación Científica y Técnica y de Innovación 2021-2023/PID2021-126153NB-I00
info:eu-repo/grantAgreement/MICIU//RTI2018-100710-B-100
https://doi.org/10.1016/j.techfore.2024.123835
Sí
dc.rights.none.fl_str_mv info:eu-repo/semantics/openAccess
eu_rights_str_mv openAccess
dc.publisher.none.fl_str_mv Elsevier
publisher.none.fl_str_mv Elsevier
dc.source.none.fl_str_mv reponame:DIGITAL.CSIC. Repositorio Institucional del CSIC
instname:Consejo Superior de Investigaciones Científicas (CSIC)
instname_str Consejo Superior de Investigaciones Científicas (CSIC)
reponame_str DIGITAL.CSIC. Repositorio Institucional del CSIC
collection DIGITAL.CSIC. Repositorio Institucional del CSIC
repository.name.fl_str_mv
repository.mail.fl_str_mv
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score 15.812429

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