Editing IPCC:AR6/WGIII/Chapter-16 (section)

=== 16.6.2 Sustainable Development and Technological Innovation: Synergies, Trade-offs and Governance ===

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==== 16.6.2.1 Synergies and Trade-offs ====

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Policies that shift innovation in climate compatible directions can promote other development benefits, for instance, better health, increased energy access, poverty alleviation and economic competitiveness ( [[#Deng--2018|Deng et al. 2018]] ) (Cross-Chapter Box 12). Economic competitiveness co-benefits can emerge as climate mitigation policies trigger innovation that can be leveraged for promoting industrial development, job creation and economic growth, both in terms of localising low-emission energy technologies value chains as well as increased energy efficiency and avoided carbon lock-ins ( [[#16.4|Section 16.4]] ). However, without adequate capabilities, co-benefits at the local level would be minimal, and they would probably materialise far from where activities take place ( [[#Ockwell--2016|Ockwell and Byrne 2016]] ; [[#Vasconcellos--2021|Vasconcellos and Caiado Couto 2021]] ). Innovation and technological change can also empower citizens. Grass-roots innovation promotes the participation of grass-roots actors, such as social movements and networks of academics, activists and practitioners, and facilitate experimenting with alternative forms of knowledge creation ( [[#Seyfang--2007|Seyfang and Smith 2007]] ; [[#UNCTAD--2019|UNCTAD 2019]] ). Examples of ordinary people and entrepreneurs adopting and adapting technologies to local needs to address locally defined needs have been documented in the development literature ( [[#van%20Welie--2018|van Welie and Romijn 2018]] ) (Box 16.10). Digital technologies can empower citizens and communities in decentralised energy systems, contributing not only to a more sustainable but also to a more democratic and fairer energy system ( [[#Van%20Summeren--2021|Van Summeren et al. 2021]] ) ( [[IPCC:Wg3:Chapter:Chapter-5#5.4|Section 5.4]] in Chapter 5, and Cross-Chapter Box 11 in this chapter).

Therefore, even though science, technology and innovation is an explicit focus of SDG 9, it is an enabler of most SDGs ( [[#UNCTAD--2019|UNCTAD 2019]] ). Striving for synergies between innovation and technological change for climate change mitigation with other SDGs can help to secure effective long-term climate mitigation, as development benefits can create feedback effects that sustain public and political support for subsequent climate mitigation policies ( [[#Geels--2014|Geels 2014]] ; [[#Meckling--2015|Meckling et al. 2015]] ; Cross-Chapter Box 12 in this chapter). However, innovation is not always geared to sustainable development – for instance, firms tend to know how to innovate when value chains are left intact ( [[#Hall--2005|Hall and Martin 2005]] ), which is usually not the case in systemic transitions.

A comprehensive study of these effects distinguishes among ‘… anticipated-intended, anticipated-unintended, and unanticipated-unintended consequences’ ( [[#Tonn--2019|Tonn and Stiefel 2019]] ). Theoretical and empirical studies have demonstrated that unintended consequences are typical of complex adaptive systems, and while a few are predictable, a much larger number are not ( [[#Sadras--2020|Sadras 2020]] ). Even when unintended consequences are unanticipated, they can be prevented through actor responses, for instance, rebound effects following the introduction of energy-efficient technologies. Other examples of unintended consequences include worse-than-expected physical damage to infrastructure and resistance from communities in the rapidly growing ocean renewable energy sector ( [[#Quirapas--2020|Quirapas and Taeihagh 2020]] ), and gaps between expected and actual performance of building-integrated photovoltaic (BIPV) technology ( [[#Boyd--2018|Boyd and Schweber 2018]] ; [[#Gram-Hanssen--2018|Gram-Hanssen and Georg 2018]] ). In the agricultural sector, new technologies and associated practices that target the fitness of crop pests have been found to favour resistant variants. Unintended consequences of digitalisation are reported as well ( [[#Lynch--2019|Lynch et al. 2019]] ) (Cross-Chapter Box 11 in this chapter).

Innovation and climate mitigation policies can also have negative socio-economic impacts, and not all countries, actors and regions around the world benefit equally from rapid technological change ( [[#Deng--2018|Deng et al. 2018]] ; [[#McCauley--2018|McCauley and Heffron 2018]] ; [[#Eisenberg--2019|Eisenberg 2019]] ; [[#UNCTAD--2019|UNCTAD 2019]] ; [[#Henry--2020|Henry et al. 2020]] ). In fact, socio-technical transitions often create winners and losers ( [[#Roberts--2018|Roberts et al. 2018]] ). Technological change can reinforce existing divides between women and men, rural and urban populations, and rich and poor communities: older workers displaced by technological change will not qualify for jobs if they were unable to acquire new skills; weak educational systems may not prepare young people for emerging employment opportunities; and disadvantaged social groups, including women in many countries, often have fewer opportunities for formal education ( [[#McCauley--2018|McCauley and Heffron 2018]] ; [[#UNCTAD--2019|UNCTAD 2019]] ). That is a risk regarding technological change for climate change mitigation, as emerging evidence suggests that the energy transition can create jobs and productivity opportunities in the renewable energy sector, but will also lead to job losses in fossil fuel and exposed sectors ( [[#Le%20Treut--2021|Le Treut et al. 2021]] ). At the same time, these new jobs may use more intensively high-level cognitive and interpersonal skills compared to regular, traditional jobs, requiring higher levels of human capital dimensions such as formal education, work experience and on-the-job training ( [[#Consoli--2016|Consoli et al. 2016]] ). Despite the empowerment potentials of decentralised energy systems, not all societal groups are equally positioned to benefit from energy community policies, with issues of energy justice taking place within initiatives, between initiatives and related actors, as well as beyond initiatives ( [[#Calzadilla--2018|Calzadilla and Mauger 2018]] ; [[#van%20Bommel--2021|van Bommel and Höffken 2021]] ).

The opportunities and challenges of technological change can also differ within country regions and between countries ( [[#Garcia-Casals--2019|Garcia-Casals et al. 2019]] ). Within countries, [[#Vasconcellos--2021|Vasconcellos and Caiado Couto (2021)]] show that, in the absence of policies and capacity-building activities which promote local recruiting, a significant part of total benefits of wind projects, especially high-income jobs and high value-added activities, is captured by already higher-income regions. Between countries, developing countries usually have lower innovation capabilities, which means they need to import low-emission technology from abroad and are also less able to adapt these technologies to local conditions and create new markets and business models. This can lead to external dependencies and limit opportunities to leverage economic benefits from technology transfer ( [[#16.5.1|Section 16.5.1]] ).

This means that, in countries below the technological frontier, the contribution of technological change to climate change mitigation can happen primarily through the adoption and less through the development of new technologies, which can reduce potential economic and welfare benefits from rapid technological change ( [[#UNCTAD--2019|UNCTAD 2019]] ). The adoption of consumer information and communication technology (ICT) ( [[#Baller--2016|Baller et al. 2016]] ) or renewable energy technology ( [[#Lema--2021|Lema et al. 2021]] ) cannot bring least-developed economies close to the technological frontier without appropriate technological capabilities in other sectors, and an enabling innovation system ( [[#Ockwell--2012|Ockwell and Mallett 2012]] ; [[#Sagar--2014|Sagar and Majumdar 2014]] ; [[#Ockwell--2018|Ockwell et al. 2018]] ; [[#UNCTAD--2019|UNCTAD 2019]] ; [[#Malhotra--2021|Malhotra et al. 2021]] ; [[#Vasconcellos--2021|Vasconcellos and Caiado Couto 2021]] ). It has been argued widely that both hard and soft infrastructure, as well as appropriate policy frameworks and capability building, would facilitate developing countries’ engagement in long-term technological innovation and sustainable industrial development, and eventually in achieving the SDGs ( [[#Ockwell--2016|Ockwell and Byrne 2016]] ; [[#Altenburg--2017|Altenburg and Rodrik 2017]] ; [[#UNCTAD--2019|UNCTAD 2019]] ).

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==== 16.6.2.2 Challenges to Governing Innovation for Sustainable Development ====

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Dominant economic systems and centralised governance structures continue to reproduce unsustainable patterns of production and consumption, reinforcing many economic and governance structures from local through national and global scales ( [[#Johnstone--2018|Johnstone and Newell 2018]] ). Technological change, as an inherently complex process ( [[#Funtowicz--2020|Funtowicz 2020]] ), poses governance challenges ( [[#Bukkens--2020|Bukkens et al. 2020]] ) requiring social innovation ( [[#Repo--2019|Repo and Matschoss 2019]] ) ( [[IPCC:Wg3:Chapter:Chapter-5#5.6|Section 5.6]] and Chapter 13).

Prospects for effectively governing SDG-oriented technological transformations require, at a minimum, balanced views and new tools for securing the scientific legitimacy and credibility to connect public policy and technological change in society ( [[#Jasanoff--2018|Jasanoff 2018]] ; [[#Sadras--2020|Sadras 2020]] ). Many frameworks of governance have been proposed, such as reflexive governance ( [[#Voss--2006|Voss et al. 2006]] ), polycentric governance ( [[#Ostrom--2010|Ostrom 2010]] ), collaborative governance ( [[#Bodin--2017|Bodin 2017]] ), adaptive governance ( [[#Munene--2018|Munene et al. 2018]] ) and transformative governance ( [[#Rijke--2013|Rijke et al. 2013]] ; [[#Westley--2013|Westley et al. 2013]] ) (Chapters 13 and 14).

A particular class of barriers to the development and adoption of new technologies comprises entrenched power relations dominated by vested interests that control and benefit from existing technologies ( [[#Chaffin--2016|Chaffin et al. 2016]] ; [[#Dorband--2020|Dorband et al. 2020]] ). Such interests can generate balancing feedbacks within multilevel social-technological regimes that are related to technological lock-in, including allocations of investment between fossil and renewable energy technologies ( [[#Unruh--2002|Unruh 2002]] ; [[#Sagar--2009|Sagar et al. 2009]] ; [[#Seto--2016|Seto et al. 2016]] ).

Weaker coordination and implementation capacity in some developing countries can undermine the ability to avoid trade-offs with other development objectives – such as reinforced inequalities or excessive indebtedness and increased external dependency – and can limit the potential of leveraging economic benefits from technologies transferred from abroad ( [[#16.5|Section 16.5]] and Cross-Chapter Box 12 in this chapter). Van Welie and Romijn (2018) show that, in a low-income setting, the exclusion of some local stakeholders from the decision-making process may undermine sustainability transitions efforts. Countries with high levels of inequality can be more prone to elite capture, non-transparent political decision-making processes, relations based on clientelism and patronage, and no independent judiciary ( [[#Jasanoff--2018|Jasanoff 2018]] ), although in particular contexts, non-elites manage to exert influence ( [[#Moldalieva--2020|Moldalieva and Heathershaw 2020]] ). The dominance of incumbents, however, implies that sustainable technological transitions could be achieved without yielding any social and democratic benefits ( [[#Hansen--2018|Hansen et al. 2018]] ). In the cultural domain, a recurrent policy challenge that has been observed in most countries is the limited public support for development and deployment of low-carbon technologies ( [[#Bernauer--2016|Bernauer and McGrath 2016]] ). The conventional approach to mobilising such support has been to portray technological change as a means of minimising climate change. Empirical studies show that simply reframing climate policy is highly unlikely to build and sustain public support ( [[#Bernauer--2016|Bernauer and McGrath 2016]] ).

Finally, there is a link between social and technological innovation; any innovation is grounded in complex socio-economic arrangements, to which governance arrangements would need to respond (Sections 5.5 and 5.6, Chapter 13, and Cross-Chapter Box 12 in this chapter). Social innovation can contribute to maximising synergies and minimising trade-offs in relation to technological and other innovative practices, but for this to materialise, national, regional and local circumstances need to be taken into account and, if needed, changed. Even in circumstances of high capabilities, the extent that social innovation might help to promote synergies and avoid trade-offs is not easy to evaluate ( [[#Grimm--2013|Grimm et al. 2013]] ).

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