This paper reviews the recent experience of Germany in encouraging innovation to reduce negative
environmental impacts of economic activity. The essence of the German approach to policy-induced
environmental innovation is discussed in the context of changing policy objectives, and illustrated with
selected examples from waste management, renewable energy and transportation. The paper covers
environmental and general innovation policies and the cross-cutting issue of policy co-ordination.
Particular attention is paid to analysis of policies to promote renewable energy, including feed-in tariffs,
and policies to promote advanced transportation.
