Dynamic efficiency refers to the ability of an instrument to generate a continuous incentive for technical improvements and costs reductions in renewable energy technologies: i.e. an incentive to positively influence technological change processes in the medium and long term. In contrast to the static efficiencyStatic efficiency (i.e. cost-effectiveness) is attained when..., which is much more concerned with the short term, dynamic efficiency is key in tackling problems with long-term horizons such as climate change.
