Technology and the transition to environmental sustainability : The problem of technological regime shifts

The present environmental problems call for more environmentally benign technology. This article examines the possibilities of achieving radical change in technology like a shift away from hydrocarbon-based energy technologies. We provide an explanation as to why such a change is likely to be a gradual and slow process. Radical technologies often have long development times and require for their operation special skills, infrastructure and all kinds of institutional changes (organizational changes, regulation, new ideas and values etc). Furthermore, the short-term costs are likely to be high as the new technologies have not yet benefited from dynamic scale and learning effects (that result in cost reductions per unit of output and evolutionary improvements in the technology). The article also provides some answers as to how it is possible for firms with restricted technological capabilities to bring about a shift into a new technological regime—emphasizing the importance of early market niches, available knowledge that may be used, institutional support, and the role of expectations. Finally, niche management is examined as a way of managing the transition towards a more environmentally sustainable energy system.