Technological innovation can lower the cost of achieving environmental objectives, so it is important to understand how environmental policy design and technological innovation are linked. This is particularly true in the area of climate change where the estimated future costs of reducing greenhouse gas emissions are affected greatly by the technological trajectory of the economy. While we suspect that public policy can play an important role in accelerating the development and diffusion of climate change mitigation and adaptation technologies, empirical evidence in this area remains scant. This book presents a series of papers that explore the extent to which technological innovation can lower the cost of achieving climate change mitigation objectives.
Climate change is one of the defining challenges of our time. Extending the use of environmentally sound technologies (ESTs) is a key component in mitigating and adapting to climate change. WIPO, along with industry partners, recently launched the pilot version of a new platform known as WIPO GREEN, which seeks to accelerate the adaptation, adoption and deployment of green technologies. WIPO GREEN is a sustainable technology exchange that promises to help facilitate the adaptation, adoption and deployment of climate-friendly technologies, particularly in developing countries and emerging economies.
In its flagship report, the German Advisory Council on Global Change (WBGU) elaborates explicitly on the fact that the technological potential for comprehensive decarbonisation is available, outlines business and financing models for the transition, and points out that the political instruments needed for a climatefriendly transformation are widely known. The council also describes how the requisite transformation encompasses profound changes to infrastructures, production processes, regulation systems and lifestyles, and extends to a new kind of interaction between politics, society, science and the economy. Various multilevel path dependencies and obstacles must be overcome. Furthermore, the transformation can only succeed if nation states put global cooperation mechanisms before their own shortterm oriented interests, in order to make a trend reversal, particularly as far as the global economy is concerned, towards climatefriendliness and sustainability possible. And not least, from a global perspective, this is also about issues of fairness – issues that need resolving.
Global warming and other impending environmental mega-problems call for a new technological paradigm. The urgency of the development and deployment of technological solutions is such that governments will need to make widespread use of ‘carrots and sticks’ to ensure that next-generation technologies are developed and deployed, more demanding standards and regulations are applied and stricter enforcement is guaranteed. To capture the main elements of this paradigm shift, we introduce the concept of Sustainability-oriented Innovation Systems (SoIS). SoIS make particularly high demands on governance, because governments need to disrupt unsustainable technological pathways and encourage alternative technologies long before they reach the stage of commercial viability. This implies picking winners in situations of technological uncertainty and highly disparate stakeholder preferences. SoIS also build on new types of policies that help to internalise environmental costs. The policy-driven nature of technological development may possibly result in a wide divergence of national technological trajectories.
New business models can make an important contribution to the transition to green growth. While some new business models involve large firms, others are small start-up firms that seek to exploit technological or commercial opportunities that have been neglected or not yet explored by more established firms. New firms tend to engage in more radical innovation than existing firms, and scaling up new business models can therefore help reduce environmental pollution, optimise the use of natural resources, increase productivity and energy efficiency, and provide a new source of economic growth. Although the market for green goods and services is growing, the development of new business models is affected by a range of barriers, many of which can be addressed by well-designed policies.