Leon Bremer

Because directed technical change has the potential to delink economic activity from environmental degradation, understanding the drivers of environment-related innovation is valuable to policy makers. This paper empirically investigates two drivers of clean innovation, energy prices and market competition, grounded in the induced innovation and inverted-U literature, respectively. Using a self-constructed dataset, I find evidence of the induced innovation hypothesis, but only when studying energy price changes, not when studying energy price levels. I do find some evidence for an inverted-U relationship between competition and innovation, although the relationship is statistically uncertain and disappears when the quadratic relationship is relaxed. When combining the two hypotheses, the results are inconclusive. I do not find consistent and significant evidence that market competition affects the induced innovation effect. While the induced innovation findings are robust against different econometric specifications and estimation methods, they vary depending on whether energy prices are first-differenced or not. The literature would benefit from foundations for clarifying which specification is preferred.

Europe’s water resources face growing pressures from climate change and competing demands. Addressing these pressures requires integrated approaches that capture interdependencies among sectors. This paper develops a unified hydro-economic modeling framework that embeds Water–Energy–Food–Ecosystem (WEFE) linkages directly into water policy analysis. Unlike existing approaches, the framework systematically combines hydrological processes, economic behavior, and policy instrument design, enabling analysis of cross-sectoral trade-offs and welfare outcomes. Its modular structure makes it suitable for both detailed numerical models and stylized applications. We illustrate its use with two European river basins, the Júcar in Spain and the Upper Main in Germany, showing how water trading and pricing policies can be evaluated within a nexus perspective. These cases demonstrate how the framework operationalizes nexus thinking and provides a transparent, policy-relevant basis for more coherent and resilient water governance.