5.3.1.2 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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