Diffusion of Clean Energy Technology for Green Economy in Developing Countries

What are the most important barriers to low-cost green technology diffusion across developing countries?

Project Summary

Implementing clean energy is considered as one of the main challenges of our time. However, while developed countries are trying to operate the transition from a carbon oriented energy consumption towards a clean one, developing countries are still facing obstacles in the transmission of these practices. Even though the traditional economic theory argues that developing countries may simply adopt technologies produced elsewhere, there are market and institutional barriers which prevent them from doing so. The three questions guiding this research are :

  • What are the most important barriers to low-cost green technology diffusion across developing countries?
  • What is the impact of domestic policies and transnational collaboration on the diffusion patterns of low-cost clean energy technologies across states?
  • How can the transnational clean energy regime facilitate the international diffusion of clean energy technologies and thereby help to address energy poverty, green growth and climate change in developing country contexts?

This project will address important knowledge gaps on clean energy diffusion, not from only an inter-disciplinary theoretical perspective, but also empirically with several distinctive contributions. The aim of this research is not only to identify the obstacles that hinder access to clean technologies in developing countries but also to assess which procedures at the governance level may be applied in order to facilitate their diffusion. At the same time, the research also involves practical aspirations, which are to find best practices able to reinforce the institutional capacity of developing countries to adopt clean technologies.

Academic Output

Working Paper

Identifying the barriers to the diffusion of low-cost clean technologies is imperative, not just in evaluating the effectiveness of different policy measures in dismantling them, but also for ensuring their faster dissemination. This is especially crucial for developing countries, where many related factors may inhibit the adoption of clean technologies by consumers, such as lack of affordability, access, information, or behavioural characteristics that hinder households from switching to cleaner alternatives to existing technologies. Energy-efficient lighting is an example of a cost-effective clean technology, which has still not been adopted on a large scale, despite several measures taken by governments, electricity utilities and manufacturers to increase their adoption. One of the main reasons for slow uptake is the higher relative prices of energy-efficient lamps such as compact fluorescent lamps (CFL) compared to the incumbent technology, namely incandescent bulbs (IB). Additional reasons are a lack of information amongst consumers about the characteristics of these technologies, initial quality-related concerns, and specific consumer preferences for features (such as the colour of light).

Working Paper

Fossil fuel subsidies are widely used around the world to reduce the cost of energy production and end prices paid by consumers. In 2014, world fossil fuel subsidy expenditures totalled USD 493 billion.1 In emerging markets, fossil fuel subsidies are justified as beneficial for poverty alleviation but quite often the populations that benefit most are not the populations most in need of subsidies. The IMF estimates that the poorest 20 per cent of households receive less than 7 per cent of the benefits generated by fossil fuel subsidies.2 Additionally, fossil fuel subsidies also create a series of negative externalities such as: undermining the competitiveness of renewable energy generation; reinforcing lock-in of fossil fuel technologies in the electricity system; reducing market energy market efficiency and discouraging investment in renewable energy technology.3 In 2009, G-20 leaders committed to “rationalize and phase out over the medium term inefficient fossil fuel subsidies that encourage wasteful consumption.”4 While the process of fossil fuel subsidy reduction is ongoing, it is at an “alarmingly slow” rate, according to the OECD.5

Executive Summary

Innovation and diffusion of clean energy technology is essential for moving toward a green economy in a carbon-constrained world. While the developed world is trying to transition to a more carbon-neutral energy mix, developing countries are struggling to secure sufficient energy to meet basic human needs. The objective of this research project was to provide an in-depth investigation of the determinants of the diffusion of clean energy technologies to developing countries. The project relied on conceptual methods from both the economic (e.g international technology diffusion and trade literature) and political science literature (e.g studies on energy governance, regime complexity, effectiveness and social learning) and contributed to new empirical insights. Although the research project investigated different barriers to clean energy diffusion and different kinds of technologies (efficient lightings, clean cookstoves, renewable energy among which geothermal in particular), the collective contribution of the project highlights the critical importance of domestic policies and policy learning enabled by clean energy governance, openness to trade and imports of new technologies, and social diffusion and peer-group effects to diffuse information among consumers.

Research Team

Liliana Andonova
Coordinator
Graduate Institute Geneva

Joelle Noailly
Co-Coordinator
Graduate Institute Geneva

Kathryn Chelminski
Principal Member
Graduate Institute Geneva

 

Joy Kim
Associated Member
UNEP United Nations Environment Programme

Manfred Elsig
Associated Member
Universität Bern

Lena Schaffer
Associated Member  Eidgenössische Technische Hochschule Zürich

Laura Diaz Anadon
Associated Member
Harvard University

Jérémy Laurent-Lucchetti Associated Member
Université de Genève