Eco-innovation and greener transitions: what can be done by public policy?

The climate change can be a natural process where temperature, rainfall, wind, and other elements vary over time. However, nowadays we are experiencing a rapid warming arising from human activities that increase greenhouse gas emissions which consequently increase temperatures making the living hood tougher and the World more asymmetric. Every aspect of national energy systems will be affected by these changes along with several factors such as the energy policy, financing, advancements in technology and shifts on the supply and demand of energy. Indeed the energy sector faces several challenges for instance the rising populations and demand, providing modern energy access to approximately 700 million people underserved, a high share of total GHG emission (65%) which has to be reduced significantly to meet the goals of the Paris Agreement. The need for an increase in resiliency to future economic and environmental shocks as well as the shift towards a greener economy requires the strong intervention of the public policies. The role of the government and its policy actions is crucial for addressing these challenges. As a matter of fact, the broad scope of consequences arising from climate change on society added to the impact on firm cost structures puts the Government in the center of this transition. Policy actions on green innovations must be heterogeneous and, therefore, the government needs to adapt to the local situation and accelerate the establishment of a market-oriented green technology innovation environment. Likewise, public policy should not be homogeneous since there are economic driven innovations which reduce cost structure while enhancing competitive strategies, conversely, others that need subsidization for their implementation due to their negative effects on costs. In another words, public policy can´t follow the “one rule fits all” approach. This paper contributes is to refine the underlying differences between environmental and eco-innovations in the greener transition as well as the effectiveness of the different policy instruments for each case, thus providing the necessary knowledge to allow for a more effective policy package. Furthermore, though a set of logistic regressions using the CIS 2018 database, we aim to understand the role of environmental regulations as barriers or promoters of innovations reinforcing the green transition as a vehicle to promote sustainable and just ecosystems. [ABSTRACT FROM AUTHOR]