Editing IPCC:AR6/WGIII/Chapter-1 (section)

=== 1.7.3 Transition and Transformation Processes ===

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This report uses the term ''transition'' as the process, and ''transformation'' as the overall change or outcome, of large-scale shifts in technological, economic and social systems, called socio-technical systems in the innovation literature. Typically, new technologies, ideas and associated systems initially grow slowly in absolute terms, but may then ‘take-off’ in a phase of exponential growth as they emerge from a position of niche into mainstream diffusion, as indicated by the ‘S-curve’ growth in Figure 1.7 (lower panel). These dynamics arise from interactions between innovation (in technologies, companies and other organisations), markets, infrastructure and institutions, at multiple levels ( [[#Geels--2017|Geels et al. 2017]] ; [[#Kramer--2018|Kramer 2018]] ). Consequently, interdisciplinary perspectives are needed ( [[#Turnheim--2015|Turnheim et al. 2015]] ; [[#Geels--2016|Geels et al. 2016]] ; [[#Hof--2020|Hof et al. 2020]] ). Beyond aggregated economic perspectives on dynamics ( [[#1.7.1.2|Section 1.7.1.2]] ), these emphasise the multiple actors and processes involved.

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'''Figure 1.7 | Transition dynamics: levels, policies and processes.''' Note: the lower panel illustrates growth of innovative technologies or practices, which if successful emerge from niches into an S-shape dynamic of exponential growth. The diffusion stage often involves new infrastructure and reconfiguration of existing market and regulatory structures (known in the literature as the ‘socio-technical regime’). During the phase of more widespread diffusion, growth levels off to linear, then slows as the industry and market matures. The processes displace incumbent technologies/practices which decline, initially slowly but then at an accelerating pace. Many related literatures identify three main levels with different characteristics, most generally termed micro, meso and macro. Transitions can be accelerated by policies appropriately targeted, which may be similarly grouped and sequenced (upper panel) in terms of three corresponding pillars of policy ( [[#1.7.3|Section 1.7.3]] ): generally all are relevant, but their relative importance differs according to the stage of the transition.

''Technological Innovation Systems (TIS)'' frameworks ( [[#16.4|Section 16.4]] ) focus on processes and policies of early innovation and ‘emergence’, which combine experimentation and commercialisation, involving ''Strategic Niche Management'' ( [[#Rip--1998|Rip and Kemp 1998]] ; [[#Geels--2006|Geels and Raven 2006]] ) ''.'' Literatures on the wider processes of transition highlight different stages (e.g., Cross-Chapter Box 12 in Chapter 16) and scales across three main levels, most generally termed ''micro, meso and macro'' ( [[#Rotmans--2001|Rotmans et al. 2001]] ).

The widely-used ''Multi-Level Perspective'' or MLP ( [[#Geels--2002|Geels 2002]] ) identifies the meso level as the established ‘socio-technical (ST) regime’, a set of interrelated sub-systems which define rules and regulatory structures around existing technologies and practices. The micro level is an ecosystem of varied niche alternatives, and overlaying the ST regime is a macro ‘landscape’ level. Transitions often start with niche alternatives ( [[#Grin--2010|Grin et al. 2010]] ; [[#Köhler--2019|Köhler et al. 2019]] ), which may break through to wider diffusion (second stage in Figure 1.8), especially if external landscape developments ‘create pressures on the regime that lead to cracks, tensions and windows of opportunity’ ( [[#Rotmans--2001|Rotmans et al. 2001]] ; [[#Geels--2010|Geels 2010]] ); an example is climate change putting sustained pressure on current regimes of energy production and consumption ( [[#Kuzemko--2016|Kuzemko et al. 2016]] ). There are continual interactions between landscape, regime and niches, with varied implications for ''Transition Management'' ( [[#Rotmans--2001|Rotmans et al. 2001]] ; [[#Loorbach--2010|Loorbach 2010]] ).

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'''Figure 1.8 | Feasibility and related dimensions''' '''of assessment.'''

In contrast to standard economic metrics of marginal or smooth change (e.g., elasticities), transition theories emphasise interdisciplinary approaches and the non-linear dynamics, social, economic and environmental aspects of transitions to sustainability ( [[#Cherp--2018|Cherp et al. 2018]] ; Köhler et al. 2018). This may explain persistent tendencies to underestimate the exponential pace of change now being observed in renewable electricity (Chapters 2 and 6) and emerging in mobility (Chapter 10).

Recent decades have seen parallel broadening of economic perspectives and theories. Building also on the New Institutional Economics literatures, Building on the New Institutional Economics literature ( [[#Williamson--2000|Williamson 2000]] ), Grubb et al. (2014, 2015) classify these into three ‘domains of economic decision-making’ associated with different branches of economic theory, respectively (i) ''behavioural and organisational'' ; (ii) ''neoclassical and welfare'' ; and (iii) ''evolutionary and institutional'' . Like MLP, these are related to different social and temporal scales, as applied also in studying the ‘adaptive finance’ in UK electricity transition ( [[#Hall--2017|Hall et al. 2017]] ). There are significant differences but these approaches all point to understanding the characteristics of different actors, notably, individuals/local actors; larger corporate organisations (public or private); and (mainly) public authorities, each with different decision-making characteristics.

Sustainability may require purposeful actions at the different levels to foster the growth of sustainable technologies and practices, including support for niche alternatives ( [[#Grin--2010|Grin et al. 2010]] ). The middle level (established ‘socio-technical regime’) tends to resist major change, reforms generally involve pressures from the other two levels. Thus, transitions can be accelerated by policies appropriately targeting relevant actors at the different levels ( [[#Köhler--2019|Köhler et al. 2019]] ), the foundations for ‘three pillars of policy’ ( [[#Grubb--2014|Grubb et al. 2014]] ), which logically evolve in the course of transition (Figure 2.6a). Incumbent industries have to adapt if they are to thrive within the growth of new systems. Policy may need to balance existing socio-technical systems with strategic investment and institutional development of the emerging niches (e.g., the maintenance of energy provision and energy security with the development of renewables), and help manage declining industries ( [[#Koasidis--2020|Koasidis et al. 2020]] ).

There is usually a social dimension to such transitions. Key elements include capacity to transform ( [[#Folke--2010|Folke et al. 2010]] ), planning, and interdisciplinarity ( [[#Woiwode--2013|Woiwode 2013]] ). The Second World War demonstrated the extent to which crises can motivate (sometimes positive) change across complex social and technical systems, including industry, and agriculture which then doubled its productivity over 15 years ( [[#Roberts--2019b|Roberts and Geels 2019b]] ). In practice, climate change may involve a combination of (reactive) transformational adaptation, and (proactive) societal transformation ( [[#Feola--2015|Feola 2015]] ), the latter seen as reorientation (including values and norms) in a sustainable direction ( [[IPCC:Wg3:Chapter:Chapter-5#5.4|Section 5.4]] ), including, for example, ‘democratisation’ in energy systems ( [[#Sorman--2020|Sorman et al. 2020]] ). Business change management principles could be relevant to support positive social change ( [[#Stephan--2016|Stephan et al. 2016]] ). Overall, effective transitions rest on appropriate enabling conditions, which can also link socio-technical transitions to broader development pathways (Cross-Chapter Box 12 in Chapter 16).

Transition theories tend to come from very different disciplines and approaches compared to either economics or other social sciences, with less quantification, notwithstanding evolutionary and complex system models ( [[#1.7.1.3|Section 1.7.1.3]] ). However, a few distinct types of quantitative models of ‘socio-technical energy transition’ ( [[#Li--2015|Li et al. 2015]] ) have emerged. For policy evaluation, transitions can be viewed as processes in which dynamic efficiency ( [[#1.7.2|Section 1.7.2]] ) dominates over static allocative efficiency, with potential ‘positive intervention points’ ( [[#Farmer--2019|Farmer et al. 2019]] ). Given inherent uncertainties, there are obvious risks (e.g., [[#Alic--2016|Alic and Sarewitz 2016]] ). All this may make an evaluation framework of ''risks and opportunities'' more appropriate than traditional cost-benefit ( [[#Mercure--2021|Mercure et al. 2021]] ), and (drawing on lessons from renewables and electric vehicles) create foundations for sector-based international ‘positive sum cooperation’ in climate mitigation ( [[#Sharpe--2021|Sharpe and Lenton 2021]] ).

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