1.2.3 The Role of Technology
The time horizon for climate change is long. The climate impacts of decisions
made in the next decade or two will be felt over the next century and beyond.
As a result, technology and, more specifically, improvements in the rate and
direction of technological change, will play a very important role. As discussed
in Chapter 2, the development and diffusion of new technologies
is perhaps the most robust and effective way to reduce GHG emissions. Three
aspects of technology can be distinguished: invention (the development, perhaps
in a laboratory, of a new production method, product, or service), innovation
(the bringing of new inventions to the market), and diffusion (the gradual adoption
of new processes or products by firms and individuals). Chapter
3 indicates that hundreds of recently invented technologies can improve
energy efficiency and thus reduce energy and associated GHG emissions. These
technologies can yield more energy-efficient buildings and appliances and equipment
used in them. There are, however, significant barriers to their innovation and
diffusion. Chapter 5 (see also IPCC, 2000a) classifies
these barriers and provides a framework for understanding their connections
with one another. Some new low-carbon emission technologies are not adopted
because their cost and performance characteristics make them unattractive relative
to existing technologies. To be adopted, these technologies require tax advantages,
cost subsidies, or additional cost-reducing or performance-enhancing research
and development (R&D; see Chapter 6 for a discussion
of the possible efficacy of such policies). Other technologies could be adopted
more rapidly if market failures and other socioeconomic constraints are reduced.
Market failures refers to situations in which the price system does not allocate
resources efficiently (see, e.g., Opschoor, 1997). They can emerge when information
is not fully disseminated or when market prices do not reflect the full social
cost. So, a new technology may not be employed if potential purchasers lack
information about it or if its price lies between its private value and its,
potentially higher, social value.
While Chapter 3 summarizes advances in our understanding
of technological options to limit or reduce GHG emissions, Chapter
4 indicates that terrestrial systems offer significant potential to capture
and hold substantially increased volumes of carbon within organic material.
However, the challenges associated with defining and measuring contributions
to sequestration and with monitoring the performance of individual sink projects
are significant. The nature of sequestration opportunities differs by region.
In some regions, the least-cost method of accomplishing sequestration is to
slow or halt deforestation. In others, afforestation and reforestation of abandoned
agricultural lands, degraded forests, and wastelands offer the lowest-cost opportunities.
The results of the IPCC (2000c) Special Report on Land Use, Land-Use Change
and Forestry may shed light on some of these controversies. In all cases, though,
the opportunity costs associated with using terrestrial systems involve welfare
implications on multiple scales.