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As part of the Productivity Insights Network, we looked at how low carbon effects and productivity effects are assessed for low carbon innovation programmes – and the extent of linkages across the two. We found that:

• there is a focus on evaluating innovation outcomes, and the subsequent commercial effects – which can be linked to productivity through the value added of products and services
• whilst environmental benefits were referenced in assessments/cases (e.g. in the programme logic), there was more limited assessment of these, and they were also not linked to productivity.

Our study suggested that there are missed opportunities to understand more fully the breadth of effects of these low carbon innovation programmes. We recommend wider and deeper development of logic models, and consideration of the effects of innovation on economic and social welfare. More guidance and the use of measurement tools would assist with assessment, and this could draw on some existing approaches such as capitals approaches (including natural capital) and tools used by investors. 

The paper can be found here.