sectoral economic costs and benefits of ghg mitigation - IPCC

Renewable Energy
“opening of the technological black-box” allowed the better characterisation of technical
knowledge as a “non-rival” but potentially “excludable” good (Romer, 1986), or of human
capital with positive externalities arising from its concentration in specific places (Lucas, 1988;
see also Weyant, 1997). This movement provided the framework for the new “endogenous
growth theory” which allows for an explanation as to why in the real world there is nothing like a
“steady state economy” - at least up to now - and why important differences may exist or appear
in the economic growth rates of different regions.
In the neo-Schumpeterain or “evolutionary” line of thinking, many issues and questions had
already been raised by Schumpeter; they included (see Freeman, 1994):
- the description of TC as a three-step process, i.e. “invention - innovation - diffusion”;
- an identification of different agents of TC, including the “innovators” and the “imitators”;
- a discussion of the links between innovation and the size of the firm and the economic
structure (the “young Shumpeter” pointing to the role of the individual entrepreneur or small
size firms, while the “old Schumpeter” recognises also as entrepreneurs the large oligopolistic
firms with formalised R&D activities);
- the “clustering” of different innovations during specific periods that lead to “long waves” in
economic growth.
Diagram 1
Exogenous, induced and endogenous technical change
TC
Exogenous TC Inducement factors Path-dependency
inventions
stochastic events
learning by doing
increasing returns
Supply-Push
Demand-Pull
R&D and technol.
opportunities
Factors of
production
Further developments in the neo-Schumpeterian perspective analysed the following
controversial, and, in some cases, overlapping, issues:
- the degree of appropriability of technological knowledge and the role of learning from
external and internal sources;
- the consequences of the cumulative, localised and tacit nature of technological knowledge,
associated with the phenomenon of learning by doing, -using, -interacting;
- the pre-determined features of technology evolution (the “paradigms” and their corresponding
“trajectories”, Dosi 1982, 1988 ; “technological avenues” and “guidepost technology”, Sahal);
108