Climate Change 2001:
Working Group III: Mitigation
Other reports in this collection Barriers and Opportunities for GHG Mitigation through Technological Change

Barriers to GHG mitigation and opportunities for overcoming them arise throughout the innovation system. They relate both to the rate of technological change and its direction. The predominant concern of governments, firms, and researchers considering innovation policies has been to maximize the rate of technological change and its contribution to national competitiveness (e.g., Freeman, 1987; Dosi et al., 1988; Grossman and Helpman, 1991). Environmental concerns are usually recognized but are rarely a major priority for national systems for innovation. Indeed, there may even be a concern that paying more attention to innovation strategies about environmental objectives would be detrimental to competitiveness.

There may be many opportunities to find synergies between the goals of improving competitiveness and reducing GHG emissions. The most obvious of these opportunities are cases where GHG mitigation could reduce costs. A greater challenge for businesses and governments is to seize opportunities to create new markets for low-GHG-emitting technology. One case of a successful strategy is the Danish development of wind turbine technology (Kemp, 2000).

Communication – among firms, between firms and users, and between firms and universities or government labs – is an important contributor to technological change. Most innovations require some social or behavioural change on the part of technology users (Rosenberg, 1994). Product innovations, if they are noticeable by the user, demand a change in consumer behaviour and sometimes in consumer preferences (OECD, 1998a). Some product innovations – such as those that result in faster computers or more powerful cars – provide consumers with more of what they already want. Nevertheless, successful marketing may depend on consumer acceptance of the new technology. Other innovations, such as alternative fuel vehicles or compact fluorescent lights, depend on consumers accepting different performance characteristics or even redefining their preferences. While consumer preferences are often seen as barriers to technological change, some of the most successful firms are those that seize the opportunities they present, by working with their customers in the development of new technology and services (Lane and Maxfield, 1995).

One of the most obvious barriers to using innovation to address GHG emissions is the lack of incentives. Economic, regulatory, and social incentives for reducing GHG emissions will also act as incentives for innovation to find new means of mitigation. Another important type of barrier, which both slows technological change in general and tends to skew it in particular directions, is that posed by “lock-in” (see Box 5.1). The tendency for societies to lock in to particular clusters of technologies and patterns of development can prevent new, low-GHG emission technologies entering the market. Meanwhile, it is important to recognize when previously locked-in technology is beginning to change, so that the opportunity can be grasped to introduce low-emission technology.

Box 5.1. Lock-In

Schumpeter (1928) emphasized the effectiveness of the capitalist system in encouraging experiments and in selecting successes. This effectiveness can be ascribed partly to the capitalist’s ability to invest in risky endeavours, trading off uncertainty against the size of the anticipated return. The competitive market system also introduces the element of “creative destruction” to the innovation process, analogous to natural selection, ensuring that an innovation that does not meet the needs of the market does not survive. Yet, despite their ability to select adequate technologies, markets sometimes “lock-in” to technologies and practices that are suboptimal because of increasing returns to scale, which block out any alternatives (Arthur, 1988, 1994). The QWERTY English keyboard layout is often mentioned as an example of an inefficient technology designed to solve a specific problem (to avoid keys sticking in mechanical typewriters) but which has become “locked in” (David, 1985). It has been claimed that alternative keyboard designs could double typing speeds, but these are not adopted because of the retraining costs that would be necessary for any change. Lock-in phenomena are familiar in the energy sector, with technologies and design standards in applications ranging from power stations to light bulbs and urban design to vehicles.

In many cases, a given technology helps to satisfy several different types of need. This is particularly evident in two of the most significant areas of energy use: cars and houses. Any individual may have a variety of potentially conflicting objectives when choosing a technology. This tendency of successful technologies to serve multiple needs contributes to lock-in by making it harder for competing innovations to replace them fully. Hence, many government attempts to introduce new, energy efficient or alternative fuel technology, especially in the case of the car, have failed because of a failure to meet all the needs satisfied by the incumbent technology. If alternative fuel vehicles have difficulty entering a market dominated by gasoline cars, alternatives to the car face even greater barriers. Owners have learned to associate their cars not only with personal mobility, but also with freedom, flexibility, fun, status, safety, a personal territory, and perhaps most powerful of all, a means of self-expression. Different owners may place emphasis on different needs. To succeed without some form of enforcement, any replacement must satisfy at least several of these needs better than the existing technology.

When a radical innovation does occur in a technology of fundamental importance, it may trigger an avalanche as a complex web of technologies and institutions require redevelopment (Schumpeter, 1935; Freeman and Perez, 1988). Such a shift may now be occurring with the spread of mobile information, communication, and networking technologies. Achieving substantial GHG mitigation may depend on recognizing when such transformations are occurring, and taking advantage of them.

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