TY - JOUR AU - Popp,David AU - Hafner,Tamara AU - Johnstone,Nick TI - Policy vs. Consumer Pressure: Innovation and Diffusion of Alternative Bleaching Technologies in the Pulp Industry JF - National Bureau of Economic Research Working Paper Series VL - No. 13439 PY - 2007 Y2 - September 2007 UR - http://www.nber.org/papers/w13439 L1 - http://www.nber.org/papers/w13439.pdf N1 - Author contact info: David Popp Associate Professor of Public Administration Syracuse University The Maxwell School 426 Eggers Hall Syracuse, NY 13244-1020 Tel: 315/443-2482 Fax: 315/443-1081 E-Mail: dcpopp@maxwell.syr.edu Tamara Hafner Assistant Professor Department of Public Administration and Policy School of Public Affairs, American University 4400 Massachusetts Ave. NW Ward Circle Building, Room 345 Washington, DC 20016 E-Mail: hafner@american.edu Nick Johnstone Empirical Policy Analysis Unit OECD Environment Directorate 2 rue Andre Pascal 75775 Paris Cedex 16 France www.oecd.org E-Mail: nick.johnstone@oecd.org AB - In the late 1980s and early 1990s, concern over dioxin in both paper products and wastewater led to the development of techniques that reduced the use of chlorine in the pulp industry. Both regulatory and consumer pressure motivated this change. We use patent data to examine the evolution of two completing bleaching technologies in five major paper-producing countries, both of which reduce the use of chlorine in the pulping process. By the end of the 1990s, nearly all pulp production in these countries used one of these technologies. Unlike other papers using patents to study environmentally-friendly innovation, we focus on a process innovation, rather than on end-of-the-pipe solutions to pollution. Moreover, while previous studies emphasize the importance of regulation for inducing innovation, here we find substantial innovation occurring before regulations were in place. Instead, pressure from consumers to reduce the chlorine content of paper drives the first round of innovation. However, while some companies choose to adopt these technologies in response to consumer pressure, not all firms will differentiate their product in this way. Thus, governments need to regulate if their goal is broad diffusion of the environmental technology. ER -