DYNAMIC POLICY DESIGN FOR
HIGH WELLBEING + LOWRESOURCE USEPROF. GREGORY NEMETMarch 202312

CLIMATE POLICY REQUIRESA COMPREHENSIVE,INCLUSIVE, AND
DYNAMIC APPROACH TO
STIMULATING INNOVATION AND
ACCELERATING ADOPTION OF
LOW CARBON TECHNOLOGIES.

PUT DYNAMIC LOW-CARBON TECHNOLOGIES AT THE 3
CENTER
1. Major progress in low-c technologies +digitalization
2. Makes low-c transition feasible and affordable
3. Need policy: pollution, knowledge, systemic
4. Design policy with technology dynamics
5. Comprehensive policy mix.

DYNAMIC INDUSTRIAL POLICY FOR CLIMATE CHANGE 4

1. urgency and acceleration as goals
2. multiple policies, strategic sequence
3. govt engages deeply in innovation
4. tech+ inclusivity, social acceptance
5. local learning and system integration
6. boost capacity in government
7. adaptive, learn from experiments

<2C REQUIRES TRANSITION TO NET
ZERO EMISSIONS …SOON

stateofcdr.org

Smith et. al (2023)

5

ENERGY TRANSITIONS ARE HARD
1. Want CHEAP,
CLEAN,RELIABLE
2. Past transitions
took decades

Wood1850

3. CO2 in atmosphere for>100 yrsCoal6Oil2010

REASONS FOR OPTIMISM
1. technology isimproving
2. emerging collectiveaction
3. learning from policy
experience
4. success in other areas
5. adaptation incentivesstrong

7

6. co-benefits: local andimmediate
7. examples of low-energy,
high-HDI
8. young adults

COST REDUCTIONS

8RAPID ADOPTION

9RAPID DECARBONIZATION NOW

10IPCC (2022)

STILL, WE NEED POLICY BECAUSE‣ Pollution externality‣ Knowledge spillovers‣ Innovation system failures‣ Inclusive well-being‣ Speed of transition

Nemet (2013, forthcoming, 2023)

1112INNOVATION THEORY…ATSPEED
Nemet et al. (2018)

TRENDS IN POLICY FOR CLIMATE

13

EMPIRICAL RESULTS TO INFORM
POLICY DESIGN FOR NET ZERO

stateofcdr.org

Smith et. al (2023)

14

TECHNOLOGY IS IMPROVING

15

HERE IS HOW…

‣ 10-4‣ Policy‣ Global‣ Small

16

PROJECT INDEPENDENCE

1ST PV LEARNING CURVE

17

A NEW ROLE FOR PUBLIC POLICY‣ Focus on dynamic technology…and acceleration‣ More like industrial policy than environmental policy‣ That demands a lot more capability in governments

Nemet, 2019

SMALL TECHNOLOGIES IMPROVE MORE QUICKLYSweerts et al. 202018

SMALL TECHNOLOGIES ADOPTED MORE QUICKLYWilson et al. 2020

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SMALL TECH MEANS MORE ITERATIONSNemet 2020

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SCALABILITY

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SMALL TECHNOLOGIESMAY TURN OUT TO BE
MORE SCALABLE
THAN LARGE ONES…SPEED

EXPANDING THE EVIDENCE BASE

Odenweller, A., Ueckerdt, F., Nemet, G.F., Jensterle, M., Luderer, G., 2022. Probabilistic feasibility space ofscaling up green hydrogen supply. Nat Energy 1–12. https://doi.org/10.1038/s41560-022-01097-4

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HISTORICAL TECHNOLOGYADOPTION DATASET (HTAD)

23Nemet,Greene et al.
(2023)

FUNCTIONAL FORM

24Nemet, Greene et al. (2023)

HISTORICAL GROWTH RATES

Nemet, Greene et al. (2023)

25

HISTORICAL CASE STUDY NH3—>
DAC

1.

1920s convergence on dominant design2.

Growth supported by major global events: 2world wars, Green Revolution

Roberts and Nemet (2022)“SHARD”
Roberts and Nemet (2023)

26

APPLYING NH3 TO DAC
1 GT DAC in 2050

Roberts and Nemet (2023)

27

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FOCUS EFFORT ON:‣ DYNAMIC TECHNOLOGIES‣ SMALL UNIT SIZE
‣ ITERATIVE IMPROVEMENT‣ INCLUSIVE WELL-BEING‣ LOCAL SYSTEM INTEGRATIONHIGH WELLBEING, LOW RESOURCE
USE

Wilson, Nemet et al. (2023)

29

HIGH WITH LOW:
CHARACTERISRTICS
1. Multiple attributes and new services.
2. Many heterogeneous adopters.
3. Evolving social preferences.
4. Peer and network effects.
5. Small-scale, 'granularity'.
6. Many iterations.
7. Local system integration.
8. Rebound effects.
Wilson, Nemet et al. (2023)

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HIGH WITH LOW: SYSTEM

31

Wilson, Nemet et al. (2023)

INCLUSIVE WELL BEING

32

Wilson, Nemet et al. (2023)

LOCAL LEARNING

33

Neij and Nemet (2022)HIGH WITH LOW POLICY34

Nemet and Greene (2022)

35A DYNAMIC PUBLIC POLICY REGIME