Global Coordination Challenges in the Transition to Clean Technology: Lessons from Automotive Innovation
Significant progress reconciling economic activities with a stable climate requires radical and rapid technological change in multiple sectors. Here, we study the case of the automotive industry’s transition to electric vehicles, which involves choosing between two different technologies: Fuel Cell Electric Vehicles (FCEVs) or Battery Electric Vehicles (BEVs).
We know very little about the role that such technological uncertainty plays in shaping the strategies of firms, the efficacy of technological and climate policies, and the speed of technological transitions.
Here, we explain that the choice between these two technologies posed a global and multi-sectoral coordination game, due to technological complementarities and the global organization of the industry’s markets and supply chains.
We use data on patents, supply-chain relationships, and national policies to document historical trends and industry dynamics for these two technologies.
While the industry initially focused on fuel cell technologies, around 2008, the technological paradigm shifted to battery electric vehicles. National-level policies had a limited ability to coordinate global players around a type of clean car technology.
Instead, exogenous innovation spill overs from outside the automotive sector played a critical role in solving this coordination game in favour of battery electric vehicles.
Our results suggest that global and cross-sectoral technology policies may be needed to accelerate low-carbon technological change in other sectors, such as shipping or aviation.
This enriches the existing theoretical paradigm, which ignores the scale of interdependencies between technologies and firms.
Date: 15 January 2024, 16:05
Venue: Manor Road Building, Manor Road OX1 3UQ
Venue Details: Lecture Theatre or https://zoom.us/j/97534799321
Speaker: Marion Dumas (LSE)
Organising department: Department of Economics
Part of: Environment and Resource Economics Seminar
Booking required?: Not required
Audience: Members of the University only
Editors: Shreyasi Banerjee, Edward Clark