Organisations, environmental management and innovation

# 1.14 Measuring eco-innovation

You have already considered some aspects of whether an innovation is positive or negative. The light bulb analysis by Lim et al. in the USA suggests that measurement is an important part of determining if something can be claimed to be a positive eco-innovation.

A 2008 report by the consultancy Technopolis identified some key problems with assessing innovation, namely difficulties associated with:

> - agreeing on selected key eco-innovation indicators on the micro level, taking into account the whole-life-cycle approach and wider impacts in depicting eco-efficiency aspects of eco-innovations;
> - clarifying different analytical levels of eco-innovation analysis and developing insightful data aggregation methods; and
> - establishing operational approaches to link different levels of analysing eco-innovations to understand their systemic effects and their relation to other key indicators, most notably to these measuring economic growth and sustainable development.
> (Reid and Miedzinski, 2008, p. 7)

In summary, these concerns centre on methodological approaches and developing appropriate indicators that reflect the systemic aspects of innovation relating to wider environmental, social and economic concerns. In other words, claiming a CFL light bulb is an eco-innovation on the basis of energy saved may be insufficient. The environmental impacts of its components and the waste generation from disposal of old lighting systems, to the social impacts of extra purchase costs of light bulbs to users and the economic impacts associated with costs to organisations to change their lighting systems all need to be considered.

There are many models and ideas for assessing innovations, including ecological footprints and life cycle analysis. These are determined on the basis of material flows. The Technopolis report also notes the importance of calculating material flows:

> It should be underlined that excessive human made material flows (extraction and displacement of natural resources) cause shifts in the eco-systems, which on one hand contribute to observed welfare levels, but on the other lead to longer term systemic disequilibria such as floods, shortages of water, desertification, erosion, etc. Hence, the primary objective of eco-innovation should be to reduce material flows. In this context, innovation policy should be linked to sustainability objectives.

> (Reid and Miedzinski, 2008, p. 10)

The methods and indicators for calculating and measuring material flows, such as material flow analysis (MFA) or material input per service (MIPS), are complex and beyond the scope of this course. But to give you a flavour of the difficulties in determining whether a product or process is eco-innovative, Table 1 outlines some of the possible sets of material flow indicators that might be used in an MFA or MIPS.

## Table 1 Material flow indicators

Domestic extraction used (DEU) | DEU measures the flows of materials that originate from the environment and that physically enter the economic system for further processing or direct consumption (they are ‘used’ by the economy).
Direct Material Input (DMI) | DMI represents materials supply. It measures the direct input of materials for use into the economy, i.e. all materials that are of economic value and are used in production and consumption activities.
Total Material Requirement (TMR) | TMR includes, in addition to DMI, the (indirect) material flows that are associated to imports but that take place on other countries. It measures the total ‘material base’ of an economy. Adding indirect flows converts imports into their ‘primary resource extraction equivalent’.
Domestic Material Consumption (DMC) | DMC represents materials use. DMC measures the total amount of material directly used in an economy (i.e. the direct apparent consumption of materials, excluding indirect flows). DMC is defined in the same way as other key physical indicators such as gross inland energy consumption.
Total Material Consumption (TMC) | TMC measures the total material use associated with domestic production and consumption activities, including indirect flows imported (see TMR) but less exports and associated indirect flows of exports.
Physical Trade Balance (PTB) | The PTB reflects the physical trade surplus or deficit of an economy. It is defined as imports minus exports (excluding or including their hidden flows).
Total Domestic Output (TDO) | TDO represents the environmental burden of materials use, i.e. the total quantity of material outputs to the environment caused by economic activity.

(Reid and Miedzinski, 2008, p. 11)

You are not expected to remember or use these indicators, but they do illustrate the complexity and difficulty of determining boundaries, and thus what might be considered as suitable indicators, when attempting to assess whether something (i.e. an idea or a process) might be judged as a positive eco-innovation.

Having briefly considered some of the difficulties in measuring eco-innovation, attention now turns to the drivers and barriers related to eco-innovation.

OpenLearn - Organisations, environmental management and innovation
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