Traditional Approaches to Environmental Degradation and Innovation Theory

Abstract

Standard approaches to damaging of the environment greatly emphasize the issue of nonrenewable resources. This focus is not surprising, as some vital resources used in industry are important nonrenewable inputs. However, one should not overlook the fact that innovation dynamics and technological progress typically can mitigate some of the problems in the long run—here, the focus is on both process innovations, which economize on the use of resources, as well as product innovations, which might bring about the use of different nonrenewable or of synthetic chemical inputs. At the same time, one may argue that until 2050 there will be considerable global population growth and most of the output growth will come from Asia—including China and India. In these countries, emphasis on fighting global warming is naturally not a top priority, but rather economic catching-up figures prominently in the political system, and economic analysis suggests that China and India still have a large potential for both economic catching-up and long-term growth, respectively (Dimaranan et al. 2009). Nevertheless, one may emphasize that economic globalization also creates new opportunities for international technology transfer and for trade with environmental (green) goods. If there is more trade with green goods and if certain countries successfully specialize in the production and export of such goods, the global abilities in the field of environmental modernization might be sufficient to cope with global warming problems: This means the ability to fight global warming on the one hand and on the other hand the ability to mitigate the effects of global warming. A potential problem of putting more emphasis on innovation dynamics is that a wave of product innovations could trigger additional emissions, which would partly or fully offset the ecological benefits associated with higher energy efficiency which would result in a generally more efficient way to use natural resources.