Mikael Hildén, Petrus Kautto, Paula Kivimaa, and Juha Oksa
Nordic Council of Ministers
Policy initiatives have highlighted the importance of environmental innovations as a solution to environmental problems, and looked into ways to promote them. Based on empirical cases in the Nordic pulp and paper industry, this report explores environmentally sounder technological innovations and their relation to societal and economic drivers. The cases studied include the use of production by-products for energy, new products in the core business areas and new product value chains. The report shows that public policy has directly influenced environmental innovation in the P&P industry through providing public R&D support, funding development projects and encouraging cooperation. It has also facilitated the crucial stage of demonstration by creating or enforcing markets for environmental innovations. The success of policy-created markets in supporting innovation is, however, crucially dependent on other market changes that push the development towards improved environmental performance. Environmental policies alone are seldom sufficient drivers for innovations.