This paper examines investment decisions regarding innovation and emissions abatement in a dynamic framework, where knowledge stock is modelled as an impure public good. Econometric outcomes, based on an original dataset which exploits the NAMEA source for 15 European Union countries and 23 manufacturing sectors in the time frame 1995-2006, show that innovation efforts are positively correlated to various spillover effects. Those effects include the emissions abatement efforts of the other sectors, thus pointing out the relevance of forces which opposite typical free riding behaviour in public or mixed public good frameworks. Different reactivity strength for different global and local emissions also allows us to disclose the specific role of technological and economic complementarity. Policy implications on the design of an optimal policy mix can be viewed in the growing debate on win-win solutions which are a valid strategy for directing scarce public financial resources