Though we can learn from the past, low-carbon transitions have some special attributes separating them from historic examples of transitions, and these require attention. For example, while many (though not all) historical transitions were opportunity-driven, low-carbon transitions are problem-oriented. While public policy was (to varying degrees) involved in most historical transitions, it will be policymakers who make up the crucial drivers of low-carbon transitions (by creating policies that nurture innovation, shape firm behaviour and investment strategies, and coordinate actors). And while many historical transitions took several decades, limiting climate change to internationally-agreed goals – such as the halting of warming below 2 ̊C above pre-industrial levels – requires low-carbon transitions to be far-reaching and fast. Another difference is that incumbents in many historical transitions were politi- cally more dispersed and thus weaker and less able to block change, whereas many carbon-intensive sectors and industries are well organised and deeply entrenched, and therefore better able to resist change.
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Nonetheless, lessons from history can guide the future – including how best to address these particular attributes in order to achieve the deep decarbonisation transitions needed. Starting with the ‘big picture’ framework, transition processes play out along multiple levels, as shown in Figure 2.
At the start of transition there are niches – protected spaces that nurture the emergence of radical innovations. Then there are the existing cluster of technologies, infrastructures, government institutions, consumer practices and incumbent actors with vested interests – often referred to as a regime. These are the conditions in which these niches are found, and are how new ideas emerge from niches into more widespread application. The wider landscape, including exogenous shocks such as wars and industrial accidents, along with trends in what society wants, sets the broader context that also contributes to shaping the transition process.
The central challenge in transitions concerns how radical innovations get a footing in niches and then compete with and transform existing regimes. This is often an uphill struggle because niche-innovations are initially more expensive and face social acceptance problems, while existing regimes and incumbents are locked into place: they have set rules and expectations, and they control the infrastructure, which is designed for incumbency rather than novelty. This is why a broad system transition often takes decades to run its course completely. It’s also why many radical innovations that could yield massive transformations actually fail to take hold. |
Overcoming incumbency typically proceeds through three phases, which we use to organise this report: emergence, diffusion and reconfiguration. There are distinct processes involved within and between each of these phases (Figure 2).
In the emergence phase, niche-innovations are developed by pioneers (or diversifying incumbent actors) who engage in experiments and learning. They build coalitions of supporting firms, governments and customers that set the stage for technologies to spread more widely. In the diffusion phase, radical innovations begin to spread when learning processes improve technical performance, lower costs, and generate clarity about how the new technology can align with consumer preferences and functional requirements. The watchwords for diffusion are competition, increased social acceptance (resulting from widespread positive visions and mitigation of negative side-effects), and regime destabilisation, which may relate to exogenous landscape pressures. The reconfiguration phase is characterised by overthrow and wider system adjustments. During reconfiguration the new entrant becomes incumbent; the transition is complete. (Often in this new equilibrium, the seeds of the next transition are being planted and growing in niches. Transitions in industrial technologies run continuously.)
The transition from horse-drawn carriages to automobiles in the United States, which took several decades, starting in the 1880s, offers an instructive illustration of these three phases.
Automobiles emerged in the 1880s and 1890s, when pioneers added steam engines, electric motors and internal combustion engines (ICE) to carriages and tricycles. These early cars were heavy, fragile, slow, and they frequently broke down. They were expensive ‘toys for the rich’ that were used in small application niches: promenading in parks and on boulevards (electric vehicles), speed races (electric, steam and ICE vehicles), long-distance races (ICE vehicles) and touring in the countryside (ICE vehicles). These application niches stimulated learning processes, leading to improved performance in battery storage content, horsepower, speed, sturdiness, and power transmission (cogwheels, belts, and chain drives). The broader landscape development of an expanding middle class, with more money and free time and the accompanying new values of sport, adventure, and ‘fun’, established the popularity of racing and touring niches. Sales of ICE vehicles powered by gasoline consequently raced ahead, while sales of electrics and steamers stagnated. In the early 1900s, elite niches expanded to include other new groups that were beginning to use gasoline cars for more utilitarian purposes, such as travelling salesmen and insurance agents, doctors, wealthy farmers, and taxi drivers. These growing niches stimulated the search for cheap, sturdy cars which, after years of trial-and-error, culminated in Henry Ford’s Model T (1908). This dominant design allowed the emerging car industry to focus on incremental product innovations (like the 1911 electric starter, which made it much easier to use ICE vehicles) and improvements in the production processes, notably in mass production, to further decrease prices.
Early cars faced social acceptance problems, because speeding on unpaved roads killed people and livestock, and created dust waves that hindered pedestrians and wagon drivers. In response, policymakers started regulatory processes, introducing speed limits, traffic rules, car registration, driving schools and licensing.
Policymakers also funded more road pavements to make urban environments more suitable for cars. Automobiles benefited not just from policies that made them address the harm they caused, but also from growing attention and policy action against the incumbents: horses. Urban expansion lengthened travel times and increased road congestion in narrow streets; the sanitary movement heightened medical and cultural concerns about horse excrement in streets; and horse-tram and bus companies faced high operating costs related to stabling and feeding thousands of horses. As the internal combustion engine improved within its niche, these differences in performance between old and new became more apparent.
In the emergence phase, niche-innovations are developed by pioneers (or diversifying incumbent actors) who engage in experiments and learning. They build coalitions of supporting firms, governments and customers that set the stage for technologies to spread more widely. In the diffusion phase, radical innovations begin to spread when learning processes improve technical performance, lower costs, and generate clarity about how the new technology can align with consumer preferences and functional requirements. The watchwords for diffusion are competition, increased social acceptance (resulting from widespread positive visions and mitigation of negative side-effects), and regime destabilisation, which may relate to exogenous landscape pressures. The reconfiguration phase is characterised by overthrow and wider system adjustments. During reconfiguration the new entrant becomes incumbent; the transition is complete. (Often in this new equilibrium, the seeds of the next transition are being planted and growing in niches. Transitions in industrial technologies run continuously.)
The transition from horse-drawn carriages to automobiles in the United States, which took several decades, starting in the 1880s, offers an instructive illustration of these three phases.
Automobiles emerged in the 1880s and 1890s, when pioneers added steam engines, electric motors and internal combustion engines (ICE) to carriages and tricycles. These early cars were heavy, fragile, slow, and they frequently broke down. They were expensive ‘toys for the rich’ that were used in small application niches: promenading in parks and on boulevards (electric vehicles), speed races (electric, steam and ICE vehicles), long-distance races (ICE vehicles) and touring in the countryside (ICE vehicles). These application niches stimulated learning processes, leading to improved performance in battery storage content, horsepower, speed, sturdiness, and power transmission (cogwheels, belts, and chain drives). The broader landscape development of an expanding middle class, with more money and free time and the accompanying new values of sport, adventure, and ‘fun’, established the popularity of racing and touring niches. Sales of ICE vehicles powered by gasoline consequently raced ahead, while sales of electrics and steamers stagnated. In the early 1900s, elite niches expanded to include other new groups that were beginning to use gasoline cars for more utilitarian purposes, such as travelling salesmen and insurance agents, doctors, wealthy farmers, and taxi drivers. These growing niches stimulated the search for cheap, sturdy cars which, after years of trial-and-error, culminated in Henry Ford’s Model T (1908). This dominant design allowed the emerging car industry to focus on incremental product innovations (like the 1911 electric starter, which made it much easier to use ICE vehicles) and improvements in the production processes, notably in mass production, to further decrease prices.
Early cars faced social acceptance problems, because speeding on unpaved roads killed people and livestock, and created dust waves that hindered pedestrians and wagon drivers. In response, policymakers started regulatory processes, introducing speed limits, traffic rules, car registration, driving schools and licensing.
Policymakers also funded more road pavements to make urban environments more suitable for cars. Automobiles benefited not just from policies that made them address the harm they caused, but also from growing attention and policy action against the incumbents: horses. Urban expansion lengthened travel times and increased road congestion in narrow streets; the sanitary movement heightened medical and cultural concerns about horse excrement in streets; and horse-tram and bus companies faced high operating costs related to stabling and feeding thousands of horses. As the internal combustion engine improved within its niche, these differences in performance between old and new became more apparent.
Figure 3 shows the diffusion of passenger cars between 1910 and 1940. As the process unfolded the total number of “vehicles'' rose exponentially: horses exited while cars took over nearly all the market share. Mass production lowered the cost of passenger cars from US$850 in 1908 to US$360 in 1916. More market niches opened: for example, when rural farmers started buying cars to help alleviate rural problems, such as isolation and declining schools, churches and shops. Road infrastructures were further expanded and highways (a new kind of road used only by cars) were built in and around cities. Rural road construction was coordinated by the newly created federal Bureau of Public Roads and supported by an increasingly powerful road lobby of highway engineers, suppliers (e.g., cement and asphalt, and construction firms), urban planners, and automobile clubs. Educational campaigns taught children and pedestrians new routines for crossing roads, and public perception of a road’s function changed from a social meeting place to a transport artery.
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Horses continued to be used in the 1920s and 1930s, but their markets shrank to specialised niches (e.g., freight transportation of nonperishable goods and some elements of rural farming). Horse-transport related social groups (e.g., smiths, wagon makers, fitters, painters, coachmen, carriers, horse-keepers, stable-keepers) were thus not immediately threatened with mass unemployment, which reduced social protests.
Complete reconfiguration followed after the Second World War. Lower costs and higher incomes made cars affordable to the broader masses, which entrenched the new car regime socially, economically and infrastructurally. A car culture emerged as automobiles were embedded in daily life routines: commuters travelled daily between suburban homes and downtown jobs; shopping malls appeared on the edge of cities, reachable only by car; people went on holidays with cars, leading to campgrounds and motels; and people could relax in drive-in cinemas and eat in drive-in restaurants. The car industry, including its supply chains, became a crucial economic sector, with downstream linkages such as the petroleum industry and public works. Economic centrality meant political gravitas. As a reflection of that centrality, a cross-continental infrastructure (the Interstate Highway System) was created between 1956 and 1992, costing US$114 billion (US$521 billion in today’s prices), 90% of which was funded by the federal government. This ensured the complete triumph of cars over mass transit alternatives and firmly established automobiles as the dominant system.
Complete reconfiguration followed after the Second World War. Lower costs and higher incomes made cars affordable to the broader masses, which entrenched the new car regime socially, economically and infrastructurally. A car culture emerged as automobiles were embedded in daily life routines: commuters travelled daily between suburban homes and downtown jobs; shopping malls appeared on the edge of cities, reachable only by car; people went on holidays with cars, leading to campgrounds and motels; and people could relax in drive-in cinemas and eat in drive-in restaurants. The car industry, including its supply chains, became a crucial economic sector, with downstream linkages such as the petroleum industry and public works. Economic centrality meant political gravitas. As a reflection of that centrality, a cross-continental infrastructure (the Interstate Highway System) was created between 1956 and 1992, costing US$114 billion (US$521 billion in today’s prices), 90% of which was funded by the federal government. This ensured the complete triumph of cars over mass transit alternatives and firmly established automobiles as the dominant system.
Excerpt reprinted with permission. Read the full Brookings report.