Substantial technological change at the global level is crucial to address global sustainability challenges. Policy interventions can accelerate technological change by increasing the diffusion of clean technologies, promoting innovation, and reducing costs. During this process, spillovers can occur when incentives for a new technology in one region influence — positively or negatively — its deployment in other regions. Models that accurately conceptualize and quantify the scale of global spillover effects — and that are crucial for designing policies that promote technological changes to tackle environmental challenges — are, however, lacking. In a recent study, in an effort to address this gap, Tobias Schmidt and colleagues proposed a methodological approach to assess the impact of local demand-side interventions on global competition between existing and new technologies.
The framework entails a conceptual approach to understand the impact of national policy interventions on global innovation. The authors defined two competing technologies: a niche technology that is clean, and an existing technology that is dirty. The model reflects that global cost reductions and the enhanced competitiveness of the niche technology enables a faster adoption of the clean option. On the other hand, the relative scale of the selection environment and the innovation potential of competing technologies limit the spillover phenomenon. In the model, dynamic selection in a jurisdiction provides baseline deployment projections, and local intervention accelerates the global deployment of the niche technology. As the clean technology is deployed more often, it is improved upon and gets more efficient. By combining these details, the proposed system-dynamics techno-economic model has the potential to examine the impact of global innovation spillovers on the adoption of clean technology and to simulate technology competition over time.
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