Evaluating the Better Mousetrap Fallacy: Should Climate Tech Focus on Scaling or Innovation?
As the demand for sustainable solutions to combat climate change intensifies, the climate technology sector is faced with a critical question: Should we invest in scaling up proven technologies or divert resources toward developing new, potentially more effective solutions? This question, at the core of the "better mousetrap fallacy," challenges the notion that newer and better technologies are always the answer to complex environmental problems.
What is the Better Mousetrap Fallacy?
The better mousetrap fallacy suggests that developing a superior technology or a “better mousetrap” doesn’t always yield the desired results in industries where scalable solutions already exist. In climate tech, this fallacy poses the risk of diverting valuable resources and investor attention toward breakthroughs that may not deliver value beyond existing solutions. While innovation drives progress, it may not be the optimal strategy in every field or for every technology, particularly if these innovations aren’t significantly better than current technologies.
Shayle Kann and Andy Lubershane, experts in climate tech, explored this concept in a recent discussion. They emphasized that prioritizing the scaling of current technologies over the endless pursuit of new ones can often be more cost-effective, particularly in areas like solar power. In other domains, however—such as batteries or carbon capture—innovation may be necessary to meet the technical challenges posed by these fields.
The Case for Scaling Proven Solutions
Certain areas of climate tech are well-suited for scaling rather than re-inventing. For instance, in sectors where mature technologies already demonstrate high efficacy and cost-effectiveness, scaling these solutions could prove more beneficial than constantly developing new ones. Solar energy is a prime example of this approach.
Solar Energy: Scaling Drives Cost Reduction
The solar energy industry has reached a point where its established technologies, like crystalline silicon photovoltaic panels, dominate the market. With decades of research and significant advances in efficiency, crystalline silicon has proven to be more effective than earlier forms of solar technology, such as cadmium telluride and CIGS (copper indium gallium selenide). Scaling this technology further can continue to reduce costs due to economies of scale, making solar power more accessible globally. Additionally, increased production capacity, especially as seen in countries like China, has driven down prices and made solar energy one of the most affordable sources of renewable energy.
In the case of solar, pushing for a "better mousetrap" may not only be unnecessary but could delay market progress. Investing in scale over innovation here allows the climate tech industry to focus resources on expanding deployment, improving efficiency, and supporting infrastructure, all of which can contribute more immediately to emissions reduction.
When Innovation Becomes Necessary: Batteries and Carbon Removal
Not all climate tech fields are in a position where scaling alone can meet future demands. In sectors like battery technology and carbon capture, incremental improvements are often insufficient. For these fields, breakthroughs in technology can be pivotal in achieving substantial gains in efficiency, storage capacity, or overall effectiveness.
Battery Technology: Innovation for Grid-Scale Energy Storage
The current generation of batteries, largely dominated by lithium-ion, has limitations, particularly when it comes to storing renewable energy at scale for grid use. While lithium-ion batteries are prevalent, they’re not ideal for applications requiring long-duration storage or massive energy capacities. Emerging battery technologies—such as iron-air, sodium-ion, and other chemistries—could offer more sustainable, safer, and longer-lasting solutions if they prove cost-effective.
Developing a new generation of batteries is essential for managing renewable energy supply and demand fluctuations. While scaling lithium-ion technology has helped make it accessible and affordable, future advances in battery technology will likely come from groundbreaking innovations that offer a step-change in performance.
Carbon Removal: Building Better Tools for Emission Reduction
Carbon capture and removal technology are similarly areas where innovation can’t be bypassed. Direct air capture, enhanced weathering, and biochar are all in development stages, and each approach has unique requirements and technological challenges. The nascent carbon capture industry needs solutions that can effectively remove CO2 at a low cost and with minimal environmental impact. Here, scaling alone cannot meet the need, and targeted innovation in materials, processes, and storage solutions remains critical.
Challenges with Focusing on Novel Solutions
While innovation is indispensable in certain fields, the risk of spreading resources thin across too many options can create confusion and analysis paralysis. In emerging fields, having multiple “mousetraps” can overwhelm stakeholders, creating difficulty in choosing where to focus efforts and capital.
For example, if there are multiple competing technologies for carbon capture, organizations may hesitate to commit, unsure which technology will ultimately deliver the most effective results. This dilemma makes a strong case for balancing innovation with selectivity—investing in a few highly promising solutions rather than attempting to advance every new technology that emerges.
Lessons from the Better Mousetrap Fallacy
Understanding Market Needs: Instead of creating new solutions for every climate-related challenge, climate tech companies can benefit by assessing existing solutions and identifying where scale or innovation will have the most impact.
Balancing Scale and Innovation: For mature technologies like solar, scaling existing solutions can lead to cost savings and immediate impact. For industries like carbon capture, however, advancing a few high-potential innovations is critical to creating effective tools for climate action.
Avoiding Analysis Paralysis: Companies and investors can avoid decision-making gridlock by focusing on scalable technologies in well-established fields while supporting innovation selectively in areas that require more advanced solutions.
Strategic Investment in New Technologies: Climate tech should prioritize innovations that promise a significant leap in performance over existing solutions, as seen with advancements in battery storage or carbon capture technology.
A Call for Strategic Thinking in Climate Tech
As climate tech continues to expand, it’s essential to maintain a balanced approach to innovation. Strategic investment in both scaling proven technologies and selectively developing new ones is necessary to meet global climate goals. By focusing resources on scaling established solutions in mature sectors and fostering innovation where breakthroughs are essential, the climate tech industry can create meaningful progress.
In many ways, the industry can look to the impact of scaling in countries like China, where solar and battery manufacturing have been scaled to such a degree that they’re now cost-competitive and accessible worldwide. Similar successes can be replicated across other sectors if climate tech companies remain agile in their approach, willing to pivot between scaling and innovation depending on the industry’s needs.
Conclusion: Innovate Where Necessary, Scale Where Possible
The climate tech industry has a vast opportunity to lead the charge toward a sustainable future, but doing so effectively requires discernment. Embracing the scaling of proven technologies, particularly where innovation is not crucial, can drive immediate impact. Conversely, industries with high technical barriers and unfulfilled needs—like battery technology and carbon capture—should focus on developing innovative solutions that offer substantial improvements.
Ultimately, the decision to innovate or scale is not a one-size-fits-all approach. Instead, a balanced and strategic focus will enable the climate tech industry to continue making meaningful strides in addressing one of humanity’s greatest challenges: climate change.
