Ecoinnovation as a Catalyst for a New Type of Economic Growth in the EU

The chapter examines the transformative potential of eco-innovation in fostering a new type of economic growth within the EU, one that decouples resource consumption from economic prosperity. It underscores the necessity of transitioning to a low-carbon, energy-efficient economy, driven by the principles of the European Green Deal and the Circular Economy Action Plan. The study empirically investigates the dynamic cointegration relationships between economic growth and the eco-innovation index across 27 EU member states, revealing a significant long-term relationship that underscores the positive correlation between eco-innovation and economic development. The analysis highlights the varying strengths of the growth-eco-innovation relationship across different countries, indicating the diverse effectiveness of eco-policies and the persistent heterogeneity within the EU. Key drivers of eco-innovation, such as resource productivity and private investment in circular economy sectors, are identified as crucial for accelerating economic growth and environmental sustainability. The chapter also discusses the role of public policy in stimulating private investment and the importance of supportive policies, regulations, and incentives in realizing the full potential of eco-innovation. It concludes with recommendations for governments, businesses, and academic institutions to foster an ecosystem conducive to eco-innovation and sustainability, optimizing the synergy between economic growth and environmental conservation.