Voluntary technology policy measures alone will not be sufficient to stabilize GHG (greenhouse gases) levels. Sufficiently stringent regulatory policies are also needed to limit GHG emissions and to foster technology innovation.
Achieving climate change goals will require not only a set of policy drivers, but also an infusion of financial and human resources to support each stage of the technological-change process depicted earlier in figure 6. Such resources are especially critical for the technology-innovation stage. In particular, there are significant needs for increased financial support for R&D and for people with the requisite training, skills and creativity to innovate—not only with regard to technologies for energy supply and demand, but also in other sectors that emit GHGs, including agriculture, forestry, and manufacturing.
The present outlook for a major infusion of such resources is decidedly mixed. In recent years, for example, China—which is now the largest emitter of GHGs in the world—has embarked on a major expansion of investment in “green” energy technologies that has propelled it to become the world’s leading manufacturer of photovoltaic solar cells, as well as a dominant force in wind power systems. China is also investing heavily in nuclear power generation, and is developing a number of clean coal technologies, including carbon capture and storage systems.
There are significant needs for increased financial support for R&D
The policy portfolio to foster innovation should include a combination of “sticks” in the form of regulatory policies that directly or indirectly set limits on GHG emissions (such as through market-based mechanisms, technology performance standards, or a combination of measures), together with “carrots” in the form of technology policies that provide voluntary incentives to encourage technology innovation and deployment (such as through support for R&D, tax credits, loan guarantees, government procurement programs and other measures). To realize the full benefits of technological innovation, the policy portfolio also should support diffusion of knowledge, such as through financial support for education and training, along with other measures.
Read more about this issue in Edward S. Rubin’ article “Innovation and climate change”