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Cultivate the Soil of Innovation for Green Development (No 125, 2015)


By Xiong Hongru, Research Team on "System, Mechanism and Policy for Green Development", Research Department of Techno-Economy of DRC

Research Report No 125, 2015 (Total 4810)


Pushing ahead with green technology innovation is a critical path to fundamentally realizing the "decoupling" of economic development from environmental pollution and resource depletion. Differing from technology innovation in a general sense, green technology innovation faces various types of "market failures", thus highlighting the significance of the government's effective decisions and support measures. China's green technology, while lagging behind some other nations, is confronted with insufficient innovation and a limited scale of industrialization. The major challenge lies in structural and institutional barriers which include weak coordination among government departments and policy measures, inadequate public investment and economic incentives, unsound government's system for green purchasing, imperfect guarantee mechanism for technology promotion, limited market-based means and distorted resources and environment price system triggering adverse incentives, etc. An important function of the government for now is to break down these structural and institutional barriers with a view to cultivating the soil of innovation for green development. It is therefore suggested that the government center on improving mechanism design and reinforce the planning and coordination mechanism at all levels and in all regions in the interest of the comprehensive construction of a policy system that guides, stimulates and guarantees green technology innovation from the aspects of supply, demand and environment.