Virtuous Cycles of Technology Adoption

What creates the “S” curve of technology adoption? It is a virtuous cycle. Positive change creates more change. The opposite is also true — a vicious cycle speeds the rapid decline of outdated technology. In a new report, Carbon Tracker identifies 7 of these paired cycles which are creating “S” curves and speeding us toward the future. Spiraling Disruption.

Sam Butler–Sloss and the Carbon Tracker team have been able to communicate really big (global) ideas simply. The full report can be found here.

Their key findings are here:

1. Witness the rise of solar and the demise of coal. The volume-cost feedback loop. As renewable volumes rise, so costs fall which then spurs more volumes. Meanwhile falling fossil volumes mean lower utilization rates which increase costs and drive down volumes.
2. The rise of electric vehicles and the demise of fossil fueled vehicles. The technology feedback loop. As technologies build on top of each other, so they spur each other on: more electric vehicles mean lower battery costs which then increases renewable penetration. Meanwhile peaking fossil fuel demand means a collapse in innovation of fossil technologies.
3. The change in expectations from revised modeling. The expectations feedback loop. As renewables continue to grow, so incumbent forecasts look ever less credible, and forecasters are obliged to change their models. As models change, so too do the perceptions of investors and policy makers, and this speeds up what is possible.
4. The decrease in capital costs for renewables, increase for fossil fuels. The finance feedback loop. As growth draws in more capital, the cost of capital falls and this enables more expansion. Meanwhile, declining growth scares investors, and falling share prices force fossil fuel companies to cut investment and change strategy.
5. The change in how people view renewables — love versus distrust and fear. The society feedback loop. As society becomes more concerned with the climate crisis and sees the attractions of renewable technology, so people embrace these new technologies. As more people embrace them, so embracing them becomes more attractive due to learning and network effects.
6. The change in politicians’ views as voters become educated about renewables and climate change. The politics feedback loop. As technologies improve, voters and politicians realize that renewables mean gain not pain, and this drives political support for change. Meanwhile, declining industries lose money, power and credibility, and their political backing shrinks.
7. The competition between China and the US. The geopolitics feedback loop. As China races ahead of the US in the energy technologies of the future, the US fears losing power and is obliged to retool for a renewable economy. This race for influence drives renewable technologies out into the rest of the world.

Carbon Tracker’s modeling fits in well with the work of Tony Seba.