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The ‘efficiency paradox’ has generated controversy and suggests that mainstream economics is not neutral in the way it deals with climate change. An alternative economic framework, evolutionary economics, is used to investigate this crucial issue and offer insights into the development of a complementary framework for designing climate policy and for managing the transition to a low-carbon society. The evolutionary framework allows us to identify the presence of two sources of inertia (i.e. at the individual level through ‘habits’ and at the level of socio-technical systems) that mutually reinforce each other in a path-dependent manner. To overcome ‘carbon lock-in’, decision-makers should design measures (e.g. commitment strategies, niche management) that specifically target those change-resisting factors, as they tend to reduce the efficiency of traditional instruments. A series of recommendations for policy-makers is provided.
Maréchal et al. (Fri,) studied this question.