Barriers to Implementing Low-Carbon Technologies

This paper reviews the major barriers to the adoption of low-carbon technologies, with a focus on market failures that provide a rationale for policy intervention to improve economic efficiency. Market failures include externalities, asymmetric information, institutional failures, regulatory failures, and failures of consumer or firm decision-making. We discuss central generation renewable energy technologies, CCS technology, distribution generation renewable energy, and technologies to reduce the demand for energy. For each technology category, we assess whether and how policy might improve economic efficiency, and point to key open research questions.