The power of incrementalism: environmental regulation and technological change in pulp and paper bleaching in the US

This article explores environmental regulation as a driver of technological change through a case study ofthe US pulp and paper industry. It analyses two sets of variables that influence the pace and direction of environmentally oriented technological change: industry structure and regulatory design. As would be expecded from a mature productive unit, when confronted with environmental challenges, the US pull, and paper industry demonstrates a strong preference for incremental technological change. The case suggests that the traditional approaches to standard-setting in the US have not challenged this preference. For the pulp and paper industry, there is considerable uncertainty regarding the strategic advantages of alternative technologies, due to uncertainly in further environmental regulation and the relatively small difference in cost between incremental and radical innovations for may mills. This case suggests that an alternative approach for promoting the diffusion of environmental enhancing radical innovations in mature productive units is to long-term goals for environmental improvement.