Understanding differences in the diffusion of environmentally beneficial technology. Final project report

Abstract

The factors affecting the diffusion of technical discoveries among firms and nations remain one of the most interesting and important but least understood elements of economic behavior. Recently, interest in technology diffusion has been heightened by a recognition that the spread of technologies could have important implications for environmental quality as well as for market goods and services. A specific motivation for this study was the question of how rapidly technologies that reduce greenhouse gas emissions might diffuse. Technologies in this category include technologies that improve the efficiency of fossil energy use or promote substitution of renewable energy resources. The speed with which these technologies spread could have a significant effect on the rate of accumulation of carbon in the atmosphere. From a modeling perspective, the rate of innovation and diffusion of carbon-reducing technology is known to be a crucial parameter in integrated assessments of climate change risks and policy responses. Thus, a better understanding of factors that might influence the spread of carbon-reducing technologies could be valuable in studies on long-term global change and policy assessment.