Climate-Friendly

Technological Change
A review to the paper Climate-Friendly Technological
Change for Developing Countries by David Popp

Presented by José Miguel Rebolho

December 4, 2018
Introduction

 Economic growth related to acquisition of technology.

1. Industrial Revolution
 Capacity to control electricity
 The begging of a new era: Mass Production

2. Energy Consumption
 Current production technologies uses too much non-
renewable energy.

3. Overpopulation
 Millions and millions more people to spend the same amount
of resources.
Introduction

 Economic growth related to acquisition of technology.

 In view of the above facts, the main objective is to
increase economic growth, based on the principle of
intergenerational sustainability.
About the paper…
Who innovates?
Who innovates?

 Developed Countries
 Biggest producers of R&D
 Reduce energy consumption derivate to being developed.
 Can produce more expensive energy but generating less
pollution.
Who innovates?

 Developing Countries
 Fastest growth
 Worry less about environment
 Non-renewable technologies are cheaper
 Green energy has a long-term return
 Development of Technologies with Limited
Markets in High-Income Countries

 Technologies are created to high-income countries

reality
 Technologies are not adapted to low-income countries
 Thus, it is necessary adaptive R&D
 Innovation in emerging economies to meet demands of
high-income countries
Example: Korean Cars
 Development of Technologies with Limited
Markets in High-Income Countries

 Innovation in emerging economies to meet demands of

high-income countries
 Problems
 Scarce of politics
Example: Chinese
EDP – Cartoon
International Technology:
Transfer and the Environment
 Embodied
 Disembodied
 i.e. China paradigm shift.
Literature on Environmental
Technology Transfer
 Practically devoted exclusively to commerce
 The effects of the environmental invoice will be
reviewed in exports
 Negative externalities that have to begin to be
measured
 Sub-optimal choices
China & India

 Good at pilot projects.

 Not able to generalize to entire population.
 Problem: Overpopulation
Diffusion within Countries

 The diffusion is slow and gradual.

 Information is fundamental for diffusion.
The Role of Policy

 Public Policies
 Transfer environmentally friendly technology
 Help in case of market failures
 Governments
 Business profits are not always compatible with the costs
of friendly technologies
The Role of Policy
 Market Failures
 The market is not considered in equilibrium (e.g.
Stagecoach vs Train)
 Nature of public good of knowledge
 Uncertainty
The Role of Policy

 Technological policy
 Subsidies and Tax incentives in environment-friendly R&D
 Secure the intellectual property of the inventor
 Friendly technologies that, in addition to benefiting the
environment, promote cost reduction.
Implications for Developing
Countries
Implications for Developing
Countries
Reviews
 Technological change is positive for economic growth
but does not explain how climate change is prone to
growth.
 Climate change is a potential catastrophe. This
catastrophe comes at a cost. This is mentioned in the
text, but it is not explained.

William Nordhaus and Paul Romer

Are you sure you want
to live climate change?
Thank You!