Technological Change and Diffusion as a Learning Process

Energy and carbon intensities of aggregate economic activities, as measured by the gross domestic product, have generally been declining since the onset of industrialization two centuries ago (Grübler and Nakicenovic 1996). This historical tendency can be observed for most countries, and for some throughout the industrialization process during the past two centuries, as will be shown for the United States (Nakicenovic 1996). This contrasts significantly with the perspective provided by disaggregated energy and carbon intensities of individual economic sectors and activities, and even with short-term intensity increases in some countries (Schmalensee et al. 1998). An important part of the secular decline of energy and carbon intensities is the result of technological change. Technologies that are more energy efficient have replaced less efficient ones, and technologies that are less carbon intensive have replaced those that are more carbon intensive. In this way, technological change has made a major contribution to these long-term improvements in the productivity of energy. In particular, the decarbonization of energy—namely, the reduction of the specific carbon content of energy—can be represented by a learning curve and thus interpreted as a long-term learning process. In this chapter it is argued that an important component of the dynamics of technological change and diffusion is a cumulative process of learning by doing. Surely technology diffusion also takes place as a result of changes (decreases) in the price of a technology or changes (increases) in the price of a saved input (energy), neither of which need be directly driven by a learning-by-doing process. To the extent that it is a result of cumulative learning processes, technological change is not an “autonomous” process, although it is often represented as such in energy and economic models. A number of implications will be considered with reference to the mitigation of carbon dioxide (CO2) emissions. Various mitigation strategies for countering the possibility of climate change have been proposed. Recently, research has