An important barrier to quick process changes is the industry’s slow capital-turnover rate. A survey in 1997/8 revealed that the median age of paper ma- chines in Europe was 23 years (Berkhout, 2005). Recent research undertaken in the USA suggests a potential negative correlation between environmental innovation and sunk costs. The research suggests that no matter what the regulator does, because there will be much lobbying and negotiations undertaken as a part of the permitting process, regula- tors tend to favour existing actors over potential new entrants. The indirect impact this can have on the innovation process can be potentially huge since.
