What made solar panels so cheap? Thank government policy.
From an economic perspective, the core challenge of climate change is that the standard way of doing things — the dirty, carbon-intensive way — is typically cheaper than newer, lower-carbon alternatives. Solving the problem means driving down the cost of those alternatives. Simple, right? But in practice, it’s not so simple. In fact, we still don’t have a very good grasp on exactly what drives technological innovation and improvement. Is it basic scientific research? Early-stage R&D? Learning by doing? Economies of scale?