International Review of Environmental and Resource Economics > Vol 7 > Issue 1

Diffusion of Green Technology: A Survey

By Corey Allan, Motu Economic and Public Policy Research, New Zealand | Adam B. Jaffe, Motu Economic and Public Policy Research, New Zealand | Isabelle Sin, National Bureau of Economic Research, USA

Suggested Citation
Corey Allan, Adam B. Jaffe and Isabelle Sin (2014), "Diffusion of Green Technology: A Survey", International Review of Environmental and Resource Economics: Vol. 7: No. 1, pp 1-33.

Publication Date: 17 Apr 2014
© 2014 C. Allan, A. B. Jaffe and I. Sin
Environmental economics,  Industrial organization,  Technology management and strategy
Technology diffusionTechnology transferPolicy instrumentsGreen technology


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In this article:
1. Introduction 
2. The Theory of Technology Diffusion 
3. Investment Cost and Annual Benefit 
4. Information Mechanisms 
5. Other Attributes of Early Adopters 
6. Issues Particular to the Adoption of Green Technologies 
7. Evidence on Policy Instruments 
8. Conclusion 


This paper surveys the existing literature on diffusion of environmentally beneficial technology. Overall, it confirms many of the lessons of the larger literature on technology diffusion: diffusion often appears slow when viewed from the outside; the flow of information is an important factor in the diffusion process; networks and organizations can matter; behavioural factors such as values and cognitive biases also play a role. With respect to policy instruments, there is some evidence that the flexibility of market-based instruments can have a beneficial impact on technology diffusion, but there are also numerous cases in which regulations have forced the adoption of new technologies. There would be significant benefit to increased investment in studies that look at questions such as the role of information provision, networks and framing issues in households' and firms' adoption decisions.