Carbon Is Free?: Greenhouse Gas Emissions and the Diffusion of No Regrets Innovation
Seminars and Conferences
Technology, Innovation, and Learning (TIL)
October 6, 2005
Abstract: Carbon Is Free? Greenhouse Gas Emissions and the Diffusion of No Regrets Innovation
Karl T. Ulrich
The Wharton School
University of Pennsylvania
April 6, 2005
Technology, Innovation, and Learning seminar
In the 1990s a debate raged in the economics and engineering literature over the existence of so-called “no regrets” measures in energy efficiency—actions that could be taken to improve energy efficiency with a net economic gain to the actor. This debate has resurfaced in the context of the climate change problem. I analyze the International Panel on Climate Change’s assessment of carbon-dioxide reduction technologies and use them to impute a supply curve for carbon dioxide remediation. I summarize the economists’ arguments that no-regrets technologies do not really exist in a significant way in this arena. Finally, I bring to bear two recent insights that shed light on the prospects for the existence and diffusion of such no-regrets technologies. One insight relates to the interaction between carbon-dioxide emissions reductions and firm-level productivity, and the other relates to the potential consumer benefits of environmentalism. In this discussion, I attempt to bring together the perspectives of economics, engineering, marketing, and operations management.
