This paper deals with the importance of inter-firm and state-firm cooperation for environmental adaptation in the Swedish pulp and paper industry during the period 1900-1990. By sharing similar pollution problems, the industry pooled resources to collective R&D activities and could thereby share cost and the economic risks related to environmental adaptation. We conclude that the environmental issue has been a strong driver for industrial renewing in the Swedish pulp and paper industry since the 1960s. The long tradition of collective environmental R&D activities, which stared already at the beginning of the 20th century, facilitated the development and adaptation of cleaner technologies in the sector from the 1960s and onwards. Our findings suggest that environmental policies that support collaborative R&D activities might facilitate innovation processes of cleaner technologies and the speed of their diffusion.