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Diverging paths

14/09/2012

  • Netherlands

Denmark and the Netherlands take different approaches to eco-innovation, but pursue similar goals.

Denmark and the Netherlands have much in common. By reputation they are socially liberal and quick to adopt new ideas. Both have histories of pushing for greater equality and promoting ecological thinking. At European Union level, they have argued, not always successfully, for the adoption of ambitious policies. During its recent EU presidency (first half 2012), for example, Denmark argued strongly for stricter climate and energy efficiency goals.

But when it comes to eco-innovation, Denmark and the Netherlands pursue very different approaches.

Denmark is ranked an eco-innovation leader. Its government published a first eco-innovation strategy in 2006. At the time Denmark's environment minister was Connie Hedegaard. She wrote that the challenge for environmental policy “is to create a basis for economic growth, which does not burden environment and nature,” and argued that if Danish companies could operate in line with this principle, they would gain a competitive edge. The strategy was followed by an action plan that set out nine eco-technology initiatives, from innovation partnerships to promotion of a healthy environment.

Successive Danish governments have continued in the same vein. In June, Ida Auken, Denmark's environment minister since October 2011, published the details of a new scheme, the Environmental Technology Development and Demonstration Programme (Miljøteknologiske Udviklings - og Demonstrationsprogram, MUDP). She reinforced the message that eco-innovation underpins growth. Danish companies can “do good business by investing in the green transition,” she said.

Through the MUDP, the Danish government will channel 40 million kroner (€5.4 million) in innovation grants to stimulate environmental technology research and product development by companies. The priorities will be water and climate adaptation, resource efficiency and waste, air pollution and noise in urban areas and from shipping, chemicals, industrial pollution, and international environmental cooperation with a particular focus on Brazil, China, India and Russia.

The MUDP's water and climate adaptation priority, for example, is designed to address a twin threat: global water scarcity and a regional increase in flood risk, resulting from extreme weather as a consequence of global warming. The plan notes that the world's need for water will exceed its sustainable resources by 40 percent in 2030. Danish companies working on water-efficient technologies – such as better industrial technologies or sewage facilities that can better recycle water by extracting phosphates – can in principle open up new export markets and thus create skilled jobs at their research and production sites. On flood management, the plan notes that there is “a need for new technological solutions to deal with flooding caused by more frequent severe cases of extreme rainfall”.

The MUDP is also a trigger for a range of supplementary government initiatives, including a new resource efficiency strategy, a programme to promote the substitution of hazardous chemicals in products, and cooperation programmes on industrial pollution with companies in “priority areas”. The Danish plan chimes with the EU eco-innovation action plan (COM/2011/0899), which also provides a framework and focus for laws and initiatives promoting economic greening, such as the REACH legislation (Regulation No. 1907/2006 on the registration, evaluation and authorisation of chemicals) and industrial policy.

Dutch approach

While Denmark promotes eco-innovation as an umbrella for a range of other activities, the Netherlands takes a sectoral approach, with no central eco-innovation policy, but a range of policies designed to achieve similar outcomes.

Two recent initiatives stand out: the “Top Sectors” innovation agreements and the Green Deals.

The Top Sectors programme is managed by the Ministry of Economic Affairs, Agriculture and Innovation. Ministry spokeswoman Lisa Neves Gonçalves says that the objective is to focus on what the Netherlands does well and boost innovation in those sectors so that the Netherlands is “in the top five in the world in 2020”. The Top Sectors are agrofood, chemicals, the creative industries, energy, high-tech industries, horticulture, life sciences and healthcare, logistics and water.

Innovation in these sectors, broadly, means eco-innovation, Neves says. “We have great problems around the world and we want to solve them through these innovation contracts,” she explains. Particular issues that the Top Sectors will tackle include energy efficiency, climate adaptation and less environmentally damaging food production. Through the inclusion of the creative industries in the programme, the government will bring disciplines such as architecture under the eco-innovation umbrella: promotion of greener buildings is a Dutch priority.

In common with Denmark, the Dutch government wants its eco-innovation activity to be outward looking. The Netherlands owes its prosperity to “entrepreneurial spirit, business acumen and our ability to innovate,” according to the government. Development of greener products will prepare Dutch business for the export markets of the future.

In 2012, the Top Sector programme is funded by about €2.8 billion from public and private sources. The Netherlands aims to leverage the programme so that the national research and development budget rises to 2.5% of GDP in 2020.

Green Deals

While Top Sectors focuses on international competitiveness, the Green Deals programme seeks to promote and support domestic sustainability. Citizens, companies, local councils and other can propose projects to the government. The projects must address energy, raw materials, transport or water. The government does not provide grants for these projects but can offer seed capital and loans through an innovation fund, and supports projects in various other ways, including through tax breaks, sustainable public procurement and even changing the law to eliminate obstacles. One example of this is reviewing planning regulations relating to wind turbines.

The aim of Green Deals is to support projects that will produce rapid results – the benefits should become clear within three years. The programme has been very successful. The Dutch government aimed to sign 100 Green Deals in 2012. By halfway through the year it had already signed 130.

The Green Deals seek to promote sustainability, rather than eco-innovation specifically. However, one of their effects is to support eco-innovation. One beneficiary of a Green Deal is the Green Chemistry Campus in Bergen-op-Zoom near the Belgian border. The campus develops bio-based, rather than petroleum-based, substances and materials. The Green Deal will support the development of the Green Chemistry Campus by helping researchers access capital markets, and reducing administrative barriers they might face as they attempt to develop new products. The Green Chemistry Campus opened in September 2011, as an initiative of municipal and provincial governments and the company SABIC.

Despite its reputation for taking on new ideas, the Netherlands is not considered an eco-innovation frontrunner. The EU eco-innovation scoreboard 2011 rates it just ahead of the EU average, but significantly behind leaders such as Finland, Sweden and Denmark, which takes a more centralised approach to eco-innovation. However, Denmark and the Netherlands share similar green economy and sustainability goals. The Dutch government hopes that Top Sectors and Green Deals will help it catch up with the EU eco-innovation leaders.

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