Innovation for green growth

The world faces growing environmental pressures. The next decades are critical to ensure a transition to a greener economy, and innovation – the creation and diffusion of new ideas, products, processes and methods – is fundamental to this transition. Innovation covers not only technological innovation but also innovation in business models, economic and social systems, and changes in lifestyles.

The increase in the use of natural resources and materials in the last century has been unprecedented. Global raw material use rose at almost twice the rate of population growth. Digitalisation can contribute to decoupling economic activity from natural resource use and its environmental impacts. Digitalisation for the transition to a resource efficient and circular economy discusses the role of digital technologies in addressing market failures for scaling up circular activities and in the effective delivery of circular economy policies.

As the United Nations Decade on Ocean Science for Sustainable Development begins, the paper A new era of digitalisation for ocean sustainability? explores recent and likely future digital technologies - especially in the field of ocean observation - that could contribute to ocean sustainability. It examines advances that could lead to substantial improvements in data collection and analysis of the impact of climate change and human activity on marine ecosystems, while also contributing to the monitoring and reduction of the ecological footprint of ocean-related economic activity.

Inventive

Activity In

selected environment-related technologies (High-value inventions (PF2), 3-year moving average, world total, indexed on 1990=100)

Source: Haščič, I. and M. Migotto (2015), "Measuring environmental innovation using patent data", OECD Environment Working Papers, No. 89, OECD Publishing, Paris, https://doi.org/10.1787/5js009kf48xw-en

Innovation is also key to reducing the environmental impacts of plastics. Quantifying environmentally relevant and circular plastic innovation: Historical trends, current landscape and the role of policy develops new metrics to measure environmentally relevant plastics innovation, derives trends over time and across countries and analyses empirical links with public policies.

The large emissions reductions needed to meet national net-zero pledges and the objectives of the Paris agreement require rapid and systemic transformation. Coordination across multiple policy areas and change in multiple “systems” (e.g. energy, transport, buildings) is needed to deliver this system-wide transformation. Mission-oriented innovation approaches (or MOIPs) can help to promote such systemic change because of their integrated nature.

The on-going program on Mission oriented Innovation Policies (MOIP) aims to assess the different ways in which mission-oriented innovation policies are used to tackle the specific challenge of reducing GHG emissions to combat climate change.

The use of agricultural feedstocks for fuel and chemicals, the so-called bioeconomy, is an area of great potential and need to integrate innovation with sustainability goals. Meeting Policy Challenges for a Sustainable Bioeconomy investigates: the use of biomass as feedstock; the design and building of biorefineries for the manufacture of fuels, chemicals and materials, and also for electricity generation; and the use of biotechnologies such as synthetic biology, metabolic engineering and gene editing. A major policy challenge remains the promotion of scale-up in better and more efficient bio-refining.

The OECD has been a pioneer in measuring the pace of innovation and diffusion through environment-related patents. Patent data have been used to empirically assess how public policies foster innovation and diffusion, including the effect of policy design characteristics on innovation rates, the interplay between environmental policy and multilateral environmental agreements and international markets for innovation. Ongoing OECD work aims at developing new families of metrics to measure environmental innovation beyond traditional patent metrics to better cover various types and stages of innovation. This new data can improve the basis for doing evidence-based assessment of environmental policies.

Additional on-going projects look at the relationship between green innovation, policies and competitiveness. Innovative small companies, often called “start-ups”, are crucial to the development of highly innovative idea, including for green technologies. Ongoing work aims at providing an in-depth analysis of the green start-up ecosystem across countries to understand the conditions needed for small innovative companies to succeed. Additional ongoing work aims at empirically assessing the economic returns of firms on innovation in cleaner technologies, and at developing practical policy recommendations to support the radical technological innovation that is necessary to reach climate neutrality.

Key Publications and website

• Digitalisation for the transition to a resource efficient and circular economy, OECD Environment Working Papers (2022)

• Quantifying environmentally relevant and circular plastic innovation: Historical trends, current landscape and the role of policy, OECD Environment Working Papers (2022)

• A new era of digitalisation for ocean sustainability?: Prospects, benefits, challenges, OECD Science, Technology and Industry Policy Papers (2021)

• Business Models for the Circular Economy (2019)

• Trends in water-related technological innovation. Lessons from patent data (2019)

• Rethinking Innovation for a Sustainable Ocean Economy (2019)

• Innovation policies for sustainable development: Low-carbon energy and smart-city initiatives (2019)

• www.oecd.org/innovation

• www.oecd.org/environment/indicators-modelling-outlooks/green-patents.htm

Contact for more information

Antoine Dechezlepretre

Directorate for Science, Technology and Innovation

E-mail: Antoine.Dechezlepretre@oecd.org

James Philp

Directorate for Science, Technology and Innovation

E-mail: James.Philp@oecd.org

Mario Cervantes

Directorate for Science, Technology and Innovation

E-mail: Mario.Cervantes@oecd.org

Philippe Larrue

Directorate for Science, Technology and Innovation

Email: Philippe.Larrue@oecd.org

Shardul Agrawala

Environment Directorate

Email: Shardul.Agrawala@oecd.org