The Role of Technological Change in Green Growth

By reducing the costs of environmental
protection, technological change is important for promoting
green growth. This entails both the creation of new
technologies and more widespread deployment of existing
green technologies. This paper reviews the literature on
environmentally friendly technological change, with a focus
on lessons relevant to developing countries. It begins with
a discussion of the data available for measuring the various
steps of technological change. It continues with a
discussion of sources of environmental innovation. Given
that most innovation is concentrated in a few rich
countries, this leads to a discussion of the remaining role
for lower-income countries, followed by a discussion of
technology transfer. Because of the importance of market
failures, the paper discusses the role of both technology
policy and environmental policy for promoting
environmentally friendly technological change. The review
concludes with a discussion of what environmental economists
can learn from other fields.