Climate Change 2001:
Working Group III: Mitigation
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1.2.3 The Role of Technology

The time horizon for climate change is long. The climate impacts of decisions made in the next decade or two will be felt over the next century and beyond. As a result, technology and, more specifically, improvements in the rate and direction of technological change, will play a very important role. As discussed in Chapter 2, the development and diffusion of new technologies is perhaps the most robust and effective way to reduce GHG emissions. Three aspects of technology can be distinguished: invention (the development, perhaps in a laboratory, of a new production method, product, or service), innovation (the bringing of new inventions to the market), and diffusion (the gradual adoption of new processes or products by firms and individuals). Chapter 3 indicates that hundreds of recently invented technologies can improve energy efficiency and thus reduce energy and associated GHG emissions. These technologies can yield more energy-efficient buildings and appliances and equipment used in them. There are, however, significant barriers to their innovation and diffusion. Chapter 5 (see also IPCC, 2000a) classifies these barriers and provides a framework for understanding their connections with one another. Some new low-carbon emission technologies are not adopted because their cost and performance characteristics make them unattractive relative to existing technologies. To be adopted, these technologies require tax advantages, cost subsidies, or additional cost-reducing or performance-enhancing research and development (R&D; see Chapter 6 for a discussion of the possible efficacy of such policies). Other technologies could be adopted more rapidly if market failures and other socioeconomic constraints are reduced. Market failures refers to situations in which the price system does not allocate resources efficiently (see, e.g., Opschoor, 1997). They can emerge when information is not fully disseminated or when market prices do not reflect the full social cost. So, a new technology may not be employed if potential purchasers lack information about it or if its price lies between its private value and its, potentially higher, social value.

While Chapter 3 summarizes advances in our understanding of technological options to limit or reduce GHG emissions, Chapter 4 indicates that terrestrial systems offer significant potential to capture and hold substantially increased volumes of carbon within organic material. However, the challenges associated with defining and measuring contributions to sequestration and with monitoring the performance of individual sink projects are significant. The nature of sequestration opportunities differs by region. In some regions, the least-cost method of accomplishing sequestration is to slow or halt deforestation. In others, afforestation and reforestation of abandoned agricultural lands, degraded forests, and wastelands offer the lowest-cost opportunities. The results of the IPCC (2000c) Special Report on Land Use, Land-Use Change and Forestry may shed light on some of these controversies. In all cases, though, the opportunity costs associated with using terrestrial systems involve welfare implications on multiple scales.

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