IPPC: A Driver for Innovation in the Pulp and Paper Industry. Working Paper 03-03

In this paper, the potential for Integrated Pollution Prevention and Control to drive innovation in the pulp and paper industries of the UK, Germany and Austria is critically assessed. Key mechanisms of IPPC rely upon skilled authorities to set emission standards drawn from a European technical level known as Best Available Technique (BAT), established in co-operation between regulatory authorities, NGOs and industry. It is argued that industrialists were able to erode the technical level down to just above average by fierce lobbying and by virtue of an information bias in their favour. BAT is therefore reactive rather than technically forcing, failing to challenge the upper range of environmental performers in the pulp and paper industry to innovate. Industrial laggards should be forced to innovate, since information on BAT facilitates comparison. Evidence suggests that the style and structure of the administrative tradition in Germany generates resistance to IPPC mechanisms, causing inertia. The inherent flexibility of IPPC permits this inertia, generating uncertainty amongst key industrial and regulatory actors regarding implementation across the EU. An un-level playing field means that first mover firms will not be rewarded and suppliers of environmental technologies will not benefit from market expansion.