2.7 Technology
The cost and pace of any response to climate change concerns will also depend critically on the cost, performance, and availability of technologies that can lower emissions in the future. These technologies include both end-use (demand) as well as production (supply) technologies. Technological change is particularly important over the long time scales characteristic of climate change. Decade or century-long time scales are typical for the lags involved between technological innovation and widespread diffusion and of the capital turnover rates characteristic for long-lived energy capital stock and infrastructures (IPCC, 2001, 2002).
The development and deployment of technology is a dynamic process involving feedbacks. Each phase of this process may involve a different set of actors and institutions. The state of technology and technology change can differ significantly from country to country and sector to sector, depending on the starting point of infrastructure, technical capacity, the readiness of markets to provide commercial opportunities and policy frameworks. This section considers foundational issues related to the creation and deployment of new technology.
‘Technology’ refers to more than simply devices. Technology includes hardware (machines, devices, infrastructure networks etc.), software (i.e. knowledge/routines required for the production and use of technological hardware), as well as organizational/institutional settings that frame incentives and deployment structures (such as standards) for the generation and use of technology (for a review, compare Grubler, 1998). Both the development of hybrid car engines and the development of Internet retailing mechanisms represent technological changes.
Many frameworks have been developed to simplify the process of technological change into a set of discrete phases. A common definitional framework frequently includes the following phases:
(1) Invention (novel concept or idea, as a result of research, development, and demonstration efforts).
(2) Innovation (first market introduction of these ideas).
(3) Niche markets (initial, small-scale applications that are economically feasible under specific conditions).
(4) Diffusion (widespread adoption and the evolution into mature markets, ending eventually in decline) (see Figure 2.3 below).
While the importance of technology to climate change is widely understood, there are differing viewpoints on the feasibility of current technology to address climate change and the role of new technology. On the one hand, Hoffert et al. (2002) and others have called for a major increase in research funding now to develop innovative technological options because, in this view, existing technologies cannot achieve the deep emission cuts that could be needed to mitigate future change. On the other hand, Pacala and Socolow (2004) advance the view that a range of known current technologies could be deployed, starting now and over the next 50 years, to place society on track to stabilize CO2 concentrations at 500 ± 50 parts per million. In their view, research for innovative technology is needed but only to develop technologies that might be used in the second half of the century and beyond. Still a third viewpoint is that the matter is better cast in terms of cost, in addition to technical feasibility (e.g. Edmonds et al., 1997; Edmonds, 2004; Nakicenovic and Riahi, 2002) From this viewpoint, today’s technology is, indeed, sufficient to bring about the requisite emissions reductions, but the underlying question is not technical feasibility but the degree to which resources would need to be reallocated from other societal goals (e.g. health care, education) to accommodate emissions mitigation. The role of new technology, in this view, is to lower the costs to achieve societal goals.
From the perspective of (commercial) availability and costs it is important to differentiate between the short-term and the long-term, and between technical and economic feasibility. A technology, currently at a pilot plant development stage and thus not available commercially, has no short-term potential to reduce emissions, but might have considerable potential once commercialized. Conversely, a technology, currently available commercially, but only at high cost, might have a short-term emission reduction potential in the (unlikely) case of extremely strong short-term policy signals (e.g. high carbon prices), but might have considerable potential in the long-term if the costs of the technology can be reduced. Corresponding mitigation technology assessments are therefore most useful when they differentiate between short/medium-term and long-term technology options, (commercial) availability status, costs, and the resulting (different) mitigation potentials of individual technology options. Frequently, the resulting ranking of individual technological options with respect to emissions reduction potentials and costs/yields emission abatement ‘supply curves’ illustrate how much emission reductions can be achieved, at what costs, over the short- to medium-term as well as in the longer-term.