In the formative phase, rapid innovation, uncertainties and frequent failures lead to erratic growth; in the accelerating growth phase, increasing economic and political returns progressively increase deployment speed; in the steady growth phase, emerging barriers dampen acceleration leading to a pattern in which growth pulsates around its peak; and in the slowdown phase, barriers stall growth and technology reaches its limits. Surprisingly, the scale and complexity of supporting policies do not necessarily diminish as technologies mature. Effective acceleration requires phase-specific policies to support technical and commercial viability in the formative phase, amplify increasing returns in the accelerating growth phase, manage barriers in the steady growth phase, and withdraw or reinvigorate support during the slowdown phase. Further advancing this phase-aware understanding of the co-evolution of policy and technology is essential for improving climate policy design and for developing more realistic technology projections and climate mitigation scenarios.
Key points
- The majority of climate policies target technological change creating a large class of policy-driven technologies. Similar to other technologies, their growth is nonlinear, and they are further shaped by feedback within policy systems.
- Policy-driven technologies advance through four phases, which are shaped by specific configurations of mechanisms, leading to distinct growth dynamics, and requiring phase-specific policy interventions.
- The steady growth phase is often overlooked; however, this is the phase in which technologies reach their fastest growth rate and long-term deployment level is largely determined. Growth in this phase typically pulsates around a relatively stable cruising speed close to the peak growth rate, reflecting feedbacks between technology expansion and policy change.
- The meaning of policy-driven technology acceleration is phase-specific: it means earlier takeoff in the formative phase; extending quasi-exponential growth during the accelerating growth phase; sustaining faster growth over longer periods in the steady growth phase; and restarting growth in the slowdown phase.
- Even after technologies become economically competitive, policy effort does not automatically decline. Instead, policy portfolios expand and diversify over time, often retaining substantial financial support, as they address a widening set of barriers.
- Phase-aware thinking is essential for effective policy advice and for producing more realistic climate and energy scenarios that account for the co-evolution of climate policies and technologies.
