Fuzzy limits Although this debate might be rooted in differing political philosophies

 2 Fuzzy limits
Although this debate might be rooted in differing political philosophies and differing views on the role of
governments, the distinction between behavioural and technical changes in not as clear-cut as the
discussion above might suggest.
For example, the choice of riding a bicycle rather than driving a car or taking public transport for short
distances may be thought of as purely behavioural, and individually determined. But this choice may also
stem from a determination of the relative safety of the two choices – which itself depends on the building
of bicycle paths. The case for using a mass-transit system may be affected by parameters such as its
proximity, frequency, comfort, safety, and cost. Eventual determinants might be the numerous factors that
determine the density of cities and suburbs – from consumer choices to policies by local authorities, credit
facilities and the like. 

In some cases technical and behavioural components are even more closely linked. To choose to buy a
“hybrid” car, twice as efficient because it associates a small thermal engine with an electric one, currently
implies accepting that driving faster than certain speeds is only possible for short periods. Even more
generally, technical change requires a succession of steps, from invention or innovation to dissemination,
that require human intervention: there is always a behavioural component in it that policy instruments must
take into account to be effective.
Another example might help illustrate this point. Bus systems might be instrumental in paving the way
toward cleaner fuels and motors. As pointed out in a recent IEA study (IEA, 2002d), “For many alternative
fuels, infrastructure is undeveloped and unfamiliar to consumers. 

This will be less a problem for [public]
transit vehicles since they are centrally fuelled by staff that can be trained to maintain vehicles properly
and handle fuel safely”. However, to be able to accomplish this, bus systems must first become more
efficient. More rapid bus systems, protected from gridlock of other vehicles, become more attractive. They
carry (faster) more passengers that could pay (justifiably) higher fares. This makes bus companies
wealthier, enabling them to eventually buy new, more modern buses, and perhaps move up the
technological ladder towards cleaner fuels and motors.
One interesting point here is that the changes that would allow a number of commuters to switch to bus
systems will save more fuel and reduce air pollutants and CO2 emissions more than a fuel change or
technology upgrade to the bus itself could achieve. These changes may require some small technological
improvements – such as information systems, automatic priorities and modern ticketing – but would
mainly rest on different kind of policy decisions – such as building bus lanes and thus restricting the public
space allotted to private traffic.
Technology dissemination or transfer too must be looked at from different angles. Increasing the role
played by already mature technologies may require different tools and policies than helping technologies in
their infancy reduce costs while raising effectiveness, or developing entirely new technologies. As the
IPCC (2001, volume 3, TS) has put it, “In all regions, many options are available for lifestyle choices that
may improve quality of life, while at the same time decreasing resource consumption and associated GHG
emissions. Such choices are very much dependent on local and regional cultures and priorities. They are
very closely related to technological changes, some of which can be associated with profound lifestyle
changes, while others do not require such changes.”
A related problem is the “rebound effect” – when technical changes reduce the costs of an activity, leading
to increases in that particular activity. For instance, more-efficient cars might be able to travel longer
distances at lower cost – but the lower cost may induce drivers to use their cars more frequently and for
longer trips, offsetting some of the efficiency gains. The increase in real income derived from increases in
efficiency can also be used for other activities – some of which may themselves lead to increases in
In other cases, however, the contrary might be true: if carbon free energy is delivered at a higher cost to
consumers, demand will shrink. As improvements in energy efficiency and decarbonisation of energy
sources and vectors could happen simultaneously, it is hard to see if demand for energy will increase or
decline as a result of climate change mitigation.
3.4 Creating markets for energy technologies
A recent IEA study (IEA, 2003) elaborates further on the question of deploying market policies from 22
case studies in several IEA member countries. 

The case studies are analysed from three different
� the research, development and deployment perspective (“R, D&D”), that builds on the
learning-by-doing process to demonstrate that government can play a valuable role with
policies that support initial deployment of new technologies;
� the market barrier perspective, that focuses on the barriers that slow the adoption of new
technologies by markets and the role government might play to reduce these barriers
(economic analysis is central in this perspective); and
� the market transformation perspective, which offers a broader set of practical considerations
in relation to behaviour and roles of market actors, and ways to influence them.
The relative importance given to the three perspectives differs in each of the cases studied. Obviously,
ready-for-use and commercially mature end-use technologies do not require the same mix of policies that
most renewable energy technologies do today.

 Nevertheless, one key message developed in this study is
that policy initiatives designed to facilitate the adoption of cleaner energy technologies are unlikely to
succeed unless policy designers pay attention to each of these three perspectives. It is necessary to:
� Invest in niche markets and learning in order to improve technology cost and performance;
� Remove or reduce barriers to market development that are based on instances of market
failure – the most important being the lack of “internalisation” of market externalities such as
pollution and GHG emissions;
� Use market transformation techniques that address stakeholders’ concerns in adopting new
technologies and help to overcome market inertia that can unduly prolong the use of less
effective technologies.
The need for a comprehensive set of actions to promote technology innovation, development and
dissemination is also acknowledged in the IPCC Third Assessment Report (IPCC, 2001). Figure 2 below
sets up a conceptual framework for the penetration of environmentally sound technologies. It shows how
different maturation stages in the innovation process help distinguish different “potentials” for mitigation –
and require different types of action to overcome various barriers

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