Fig. 3. Global effects in technology transitions.

The global leverage of climate leaders in technology transitions varies by how interdependent technology markets are. Depending on the level of interdependence, the spillovers of policy in a first-mover country to market actors in a follower country are more or less comprehensive. In all low-carbon transitions, climate leaders can create demonstration effects and often reduce the cost of technology for follower countries. In some cases, they can also influence follower markets through corporate leverage and market leverage effects.