Technology Innovation and Climate Change Policy : An Overview of Issues and Options

Abstract

Achieving deep reductions in greenhouse gas (GHG) emissions at accept- Michael GRUBB able social cost will involve far-reaching technological change in the energy and in other sectors. Indeed, at present this seems one of the few things on which there is in- ternational agreement in relation to climate change. There are, however, disagreements among academics and policy analysts regarding the best way to promote appropriate technological change for tackling climate change, and the implications this has for pol- icy. There are also practical institutional challenges in devising and successfully imple- menting policies, both at the domestic and international levels, which will successfully promote the needed innovations. This paper attempts to explain the different views and offers a synthesis, arguing that properly understanding the economics of technology in- novation offers a way forward between what seem very divergent international positions on climate change policy.