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date: 22 June 2017

Policy for Energy Innovation

This is an advance summary of a forthcoming article in the Oxford Research Encyclopedia of Climate Science. Please check back later for the full article.

Mitigation of climate change depends on technological innovation, ongoing and continuous. The prospective routes fall along two main axes: energy systems and geoengineering. Energy system innovations reduce greenhouse gas (GHG) emissions directly. Alternatively or in parallel, the climate forcing effects of anthropogenic GHG buildup might be countered by geoengineering, a label applied to schemes that would counter global warming by extracting carbon dioxide (CO2) from Earth’s atmosphere or by managing solar insolation. “Scrubbing” CO2 from the atmosphere is technically possible, but likely to be quite costly. Other geoengineering proposals are speculative, with unknown but seemingly great risks.

Large reductions in GHG release rates through energy systems innovation will be necessary simply to stabilize atmospheric GHG concentrations. Such reductions can only come about through large-scale, system-wide changes in technologies of many different types. Whether assessed in purely technical terms (e.g., rates of advance in performance indicators such as cost and efficiency), in socioeconomic terms (e.g., in demand for energy, reflected in production and consumption of goods and services such as food, transportation, and steel), or in terms of government policies themselves (dependent in part on political institutions), the difficulties will be very great. These are practical difficulties, chiefly concerned with devising and implementing policies to bring nascent innovations to relative maturity quickly and to speed their diffusion through economies that differ structurally and in level of affluence, while avoiding lock-in of the sort that today slows decarbonization of electrical power generation. Policymakers lacking sophisticated understanding of how innovation works sometimes undervalue these seemingly mundane parts of the process, hoping that scientific “breakthroughs” will somehow, someday, emerge to sweep them aside. Such expectations are false on multiple grounds: science does not automatically lead to innovation; radical innovation is, in any case, unpredictable by definition; and the more or less routine activities of profit-seeking business firms are at least as important as research and discovery.

Because technologies differ in ways significant for policy, policymakers must understand these differences to devise and implement effective measures. By classifying technology and innovation policies into categories keyed to differences among technologies and economic sectors, it becomes possible to prepare rough sets of roadmaps matching technological needs and opportunities with policy choices and institutional settings.