Net Zero Technologies

Technological tipping points

We know that the cost of new technologies is a function of deployment, which generates benefits in terms of learning and experience. Initially, these costs are high, finance is niche and market opportunities are limited. But if investors believe that everyone will shift to new technologies – perhaps because costs will fall – they will increasingly invest in deploying these technologies. This results in a self-fulfilling expectation, as profitable new markets generate further cost reductions that draw in more consumers.

As more net zero technologies are developed – driving further expectations and investments – they can propagate technological tipping points. For example, the tipping point has already been reached in terms of the price and performance of wind and solar power. Combined with storage technologies that tackle the intermittent nature of these energy sources, these renewables have become increasingly viable and competitive energy sources (Falk et al., 2019).

Technological advancements and network effects can further lower the costs of production, installation and operation for net zero technologies. This in turn encourages the political establishment to introduce policies to support resource-efficient net zero investments (Collier & Venable, 2014). It also generates new institutions, such as new business lobbies, which can challenge incumbent vested interests.

These positive feedback loops accelerate the development as investment, technological advancement and regulatory support collectively drive the transition (Anadon et al., 2016).