The Valley of Death, the Technology Pork Barrel, and Public Support for Large Demonstration Projects

Gregory Nemet, Martina Kraus and Vera Zipperer

No 1601, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: Moving non-incremental innovations from the pilot scale to full commercial scale raises questions about the need and implementation of public support. Heuristics from the literature put policy makers in a dilemma between addressing a market failure and acknowledging a government failure: incentives for private investments in large scale demonstrations are weak (the valley of death) but the track record of governance in large demonstration projects is poor (the technology pork barrel). We reassess these arguments in the literature, particularly as to how they apply to sup- porting demonstration projects for decarbonizing industry. Conditions for the valley of death exist with: low appropriability, large chunky investments, unproven reliability, and uncertain future markets. We build a data set of 511 demonstration projects in nine technology areas and code characteristics for each project, including timing, motivations, and scale. We argue that the literature and the results from the case studies have five main implications for policy makers in making decisions about demonstration support. Policy makers should consider: 1) prioritizing learning, 2) iterative upscaling, 3) private sector engagement, 4) broad knowledge dissemination, and 5) making demand pull robust.

Keywords: Demonstrations; technology push; demand pull (search for similar items in EconPapers)
JEL-codes: O31 O38 Q55 (search for similar items in EconPapers)
Pages: 60 p.
Date: 2016
New Economics Papers: this item is included in nep-cdm, nep-ene, nep-ino, nep-ppm and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Journal Article: The valley of death, the technology pork barrel, and public support for large demonstration projects (2018)
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