Sparking Technological Innovation for a Low Carbon Society

The document argues that technological innovation, particularly in the electricity sector, is essential for reducing greenhouse gas emissions, but is currently hindered by high risks and long investment cycles. It highlights that while solar PV has seen rapid growth driven by European feed-in tariffs and US tax incentives, carbon capture and storage (CCS) remains stalled in the 'valley of death' due to insufficient funding and political commitment for large-scale demonstration. The authors emphasize the need for a combination of 'push' (R&D) and 'pull' (market creation) mechanisms to ensure sustainable technological scaling and suggest that market formation must expand beyond Europe to ensure global stability for these industries.

• The electricity sector is a critical area for innovation because it accounts for approximately 40 per cent of global CO2 emissions, yet progress is slowed by the dominance of old fossil-fuel technologies, low private sector R&D, and high investor risk due to capital intensity and long investment cycles.
• Solar PV growth has been heavily dependent on policy-driven market creation, with European feed-in tariffs being historically most effective, while the US has successfully used a mix of tax incentives and tailored renewable portfolio standards (RPS).
• Carbon capture and storage (CCS) is struggling to move from R&D to commercialization, a phase described as the 'valley of death', because large-scale demonstration projects lack sufficient funding and political commitment.
• Innovation systems for solar PV and CCS have become international, but market formation remains concentrated in Europe. This creates a vulnerability where the global industry is overly dependent on the policy decisions of a few countries.
• Effective technology development requires both 'push' (R&D) and 'pull' (market creation) mechanisms; focusing exclusively on one can lead to either a lack of learning from market application or short-termism in research.

APA

Varnäs, A., Fahnestock, J., & Erickson, P. (2011). Sparking Technological Innovation for a Low Carbon Society. Stockholm Environment Institute. https://www.sei.org/mediamanager/documents/Publications/SEI-PolicyBrief-Varnas-SparkingTechnologicalInnovationForALowCarbonSociety-2011.pdf

Chicago

Varnäs, Annika, Jesse Fahnestock, and Peter Erickson. Sparking Technological Innovation for a Low Carbon Society. Stockholm Environment Institute, 2011. https://www.sei.org/mediamanager/documents/Publications/SEI-PolicyBrief-Varnas-SparkingTechnologicalInnovationForALowCarbonSociety-2011.pdf.

Wikipedia

{{cite report |last1=Varnäs |first1=Annika |last2=Fahnestock |first2=Jesse |last3=Erickson |first3=Peter |title=Sparking Technological Innovation for a Low Carbon Society |publisher=Stockholm Environment Institute |date=2011 |url=https://www.sei.org/mediamanager/documents/Publications/SEI-PolicyBrief-Varnas-SparkingTechnologicalInnovationForALowCarbonSociety-2011.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{varns2011sparking, author = {Varnäs, Annika and Fahnestock, Jesse and Erickson, Peter}, title = {{Sparking Technological Innovation for a Low Carbon Society}}, institution = {Stockholm Environment Institute}, year = {2011}, url = {https://www.sei.org/mediamanager/documents/Publications/SEI-PolicyBrief-Varnas-SparkingTechnologicalInnovationForALowCarbonSociety-2011.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }