Technology Diffusion and Climate Policy: A Network Approach and its Application to Wind Energy

The role of technology transfer in the mitigation of climate change has been strongly emphasized in the recent policy debate. This paper, ​Technology Diffusion and Climate Policy: A Network Approach and its Application to Wind Energy, offers a network-based perspective on the issue. First, the authors propose a methodology to infer from technology adoption data the network of diffusion and apply it to a detailed dataset on wind energy technologies installed globally since the 1980s. The authors then perform a statistical analysis of the network. It highlights a relatively inefficient organization, characterized in particular by the weakness of South-South links, which leads to relatively long lags in the diffusion process. Against this background, the authors characterize optimal transfer/seeding strategies for an agent that aims to introduce a new technology in a developing country in view of further diffusion. Our results suggest in particular that CDM projects have been too concentrated in large emerging economies and that developed countries should put a stronger weight on the positive externalities in terms of technology transfer of cooperating with less prominent developing countries.