Which strategies work best to avert the looming effects of climate change? Is it government intervention? Or free markets? Is there a best way for us to accelerate the changes we must make to our energy supplies?
In a new editorial at The Conversation, SFI External Professor Jessika Trancik argues that climate disaster can be averted most efficiently if governments intentionally seed technological innovation. As Trancik explains, when, in the past, governments have invested in newer technologies (like solar energy, wind energy, and new lithium-ion batteries), the technologies tended to improve at exponential rates.
Yet technological improvements are also the result of markets. When governments created financial incentives for energy project developers to build solar power facilities, private companies innovated to compete for market share. It’s the synergy between initial government support and market competition that made for such fast improvement, and, relatedly, supported rapid growth.
If we see this synergy at work in many past technologies, Trancik argues, we would do well to push for policies that accelerate the development of technologies, not only in carbon-free electricity but across all energy services. Such policies will both fund research and stimulate new markets. Since, when it gets going, technological improvement has tended to occur exponentially in some recent examples, governments have the power to bring about significant technological change.
Read the article in The Conversation (April 7, 2021)