systems that help reduce energy demand and GHG emissions (for instance, through innovations in urban planning and development). Figure 5.1 shows one estimate of how technological innovations can reduce the future cost of GHG emissions reduction. In this modeling study, a “business as usual” case—which assumes a continuation of historical rates of technological improvements—is compared to a case with more rapid technological change. The cost of meeting a stringent emissions-reduction requirement is reduced dramatically when “advanced technologies” are available.


Technological innovation is a component of the broader process of technological change, which involves a number of stages (Figure 5.2). Different terms are used in the literature to describe these stages, but four commonly used descriptors are


Discovery; creation of knowledge; new prototypes.


Creation of a commercial product or process.


Deployment and initial use of the new technology.


Increasing adoption and use of the technology.

The first stage is driven by R&D, including both basic and applied research. The second stage—innovation—is the term often used colloquially to describe the overall process of technological change. But, as used here, innovation refers only to the creation of a commercially offered product or process; it does not mean the product will be adopted or become widely used. That requires the product to pass successfully through the last two stages—adoption and diffusion. Those two stages are inevitably the most critical to reducing GHG emissions. Large-scale change also must be considered from a “systems” perspective, because the success of any new technology is often dependent upon many other technological and nontechnological factors.

Rather than being a simple linear process, the different stages of technological change are highly interactive, as depicted in Figure 5.2. Technological innovation is stimulated not only by support for R&D but also by the needs and opportunities that emerge from the experience of early adopters, and from the knowledge and experience gained as a technology diffuses into the marketplace. Thus, “learning by doing” is often critical to the adoption and diffusion of new technologies by helping to improve their performance and/or reduce their cost (a process commonly characterized as a learning curve).

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