Objective and Method
Climate change calls, among other actions, for rapid market penetration by energy-efficient, low-carbon technologies that substitute fossil-fuel powered products. There is a need for identifying and analyzing socio-political and technological processes stimulating market growth in order to design transformative pathways. Real-world market growth of innovative technologies is typically not a continuous process, but characterized by intermittent phases of acceleration, stagnation or even relapse. Thus, targeted policy actions need to identify and explain turning points of accelerated market diffusion of low-carbon technologies. On a wider note, the TIMELAG project strives to advance the discussion on dynamic and pace of technology diffusion.
Methodology
In a mixed-method, multistep approach we identified and explained turning points by integrating Diffusion of Innovations Theory (Rogers 1983) with the Multiple Streams Approach (Kingdon 1984):
First, the mathematical technique of change point analysis compared historical market data to the baseline s-shape to determine the calendar years when turning points in market diffusion occurred. Therein, robust and validated continuous time-series data on market diffusion of photovoltaic, electric cars and heat pumps provided by WP3 built the basis of the mathematical change point analysis. The latter was a core activity in WP5, where a range of change point models, comprising alternative growth functions and parameters, were tested against the observed market data.
Second, document analysis and deliberation with experts reconstructed socio-political developments related to market diffusion as a sequence of critical events in the politics, policy and technology stream. To that end, in WP2, by means of an in-depth review for each considered technology, historical cornerstones and critical events on a timeline from 1970 to the present were established. These timelines built the foundation of the mixed-method approach employed in WP4 narrowing down to a compact selection of critical events.
Third, sequence of critical events in the politics, policy and technology stream were integrated into storylines to explain in hindsight how turning points emerged from continuous buildup or critical junctures between the three streams. In WP6, the turning points determined in change point analysis and the critical events underlying these turning points were scrutinized and validated in a stakeholder workshop.
Fourth, in order to account for the bottom-up consumer-level perspective an empirical survey on sequences of residential renovation activities was conducted. The survey expands on the previous literature by systematically testing the differential impacts of a broad scope of critical events on several renovations, thereby highlighting that critical events do not uniformly apply to all kinds of renovations.
By doing so, on the one hand, we advance the discussion on dynamic and pace of technology diffusion, which is particularly important for advanced scenario analysis and forecast models (van der Kam et al. 2018, Harris et al. 2018); on the other hand, we demonstrate a systematic methodology for understanding past developments in order to inform future diffusion efforts.
Main Findings
Our results reveal that observed diffusion processes change direction and pace at specific moments in time, rather than following a uniform s-shape. Carbon emission reduction targets combined with mandatory regulations are key levers, but need to be accompanied by actions in the politics, policy and technology stream. For instance, technological advancement from R&D programs, product development and quality labels provide necessary impulses, as in the case of heat pumps from the 1980s to 2000s. Neighboring countries and global influences play a complementary role, as underscored by the positive spillover of German renewable energy legislation on Austria’s PV funding schemes, the international DACH label ensuring heat pump quality and Chinese fuel consumption standards enabling mandatory fleet standards in Europe.
Unspecific subsidy programs appear to be less effective for advancing diffusion of low-carbon technologies. The diffusion impact of Austrian subsidy programs seems constrained to pull-forward effects, as in the temporary sales boost from the e-mobility regions scheme, or to fueling adoption in a restricted customer segment, as the photovoltaics segment response to feed-in tariffs and investment grants might have been saturated within a few years.
Conclusion
Continuously monitoring all streams may allow to detect barriers of market diffusion or to anticipate upcoming windows of opportunity when streams converge and targeted action could trigger accelerated growth. Yet, such tailor-made policy interventions require reflexive and adaptive policy integration; both horizontally across economic sectors, policy spheres and technologies and vertically from local to supra-regional levels. Finally, policy mixes should not push for maximum market penetration but seek an optimal interplay of complementary technologies jointly contributing to carbon emission reduction and reaching emission targets.