Abstract
This paper examines the effects of environmental innovation on material usage, using Direct Material Input (DMI) and Raw Material Input (RMI) as indicators of material usage. The analysis is conducted on European Union countries for the years 1990–2012. We utilize the Generalized Method of Moments in a dynamic panel setting. Based on patent data, we construct green knowledge stocks for specific technological domains. We find that the effect of environmental innovation differs between subdomains. Innovation in the areas of energy efficiency, and recycling and reuse is found to reduce material usage. For alternative energy production, transportation, production or processing of goods, and general green innovation no significant effect is found. We observe a distinct reducing effect of some environmental innovation areas when compared with overall innovation. The technology effects are similar for RMI and DMI. The results are discussed from the perspective of literature on the environmental effects of environmental innovation, and literature on decoupling.
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