Policy Brief: Sustainable Manufacturing and Eco-innovation: Towards a Green Economy

In recent decades, expanding economic activity has been accompanied by growing concerns about climate change, energy security and scarcity of natural resources. While industries are showing greater interest in sustainable production and are undertaking a number of corporate social responsibility (CSR) initiatives, progress falls far short of meeting these pressing challenges. Moreover, improvements in efficiency in some regions have often been offset by increasing consumption in other regions, while efficiency gains in some areas are outpaced by scale effects. Without new policy action, recent OECD analysis suggests that global greenhouse gas emissions are likely to increase by 70% by 2050.

Provided that governments send a clear policy signal now about their medium and long-term climate change objectives, the cost of climate policy measures could be kept quite low in the next few years. Raising efficiency in resource and energy use and engaging in a broad range of innovations to improve environmental performance will also help to create new industries and jobs in coming years. The current economic crisis and negotiations to tackle climate change should thus be seen as an opportunity to shift to a greener economy.

Incremental improvement is not enough, however. Industry must be restructured, and existing and breakthrough technologies must be more innovatively applied to realise green growth. Short-term relief packages deployed today can stimulate investments in technologies and infrastructures that help innovation and enable changes in the way we produce and consume goods and services in the future.

This Policy Brief examines how innovation can result in new technological and systemic solutions to environmental challenges and contributes to a wider range of OECD work aimed at analysing the policies that can efficiently support the development and diffusion of eco‑innovation.