Passage

The history of renewable energy suggests there is a steep learning curve, meaning that, as more is produced, costs fall rapidly because of economies of scale and learning by doing. The firms’ green innovation is path-dependent: the more a firm does, the more it is likely to do in the future. The strongest evidence for this is the collapse in the price of solar energy, which became about 90% cheaper during the 2010s, repeatedly beating forecasts. Moving early and gradually gives economies more time to adjust, allowing them to reap the benefits of path-dependent green investment without much disruption. A late, more chaotic transition is costlier.

QUESTION

CSAT

Hard

Comprehension

Prelims 2025

With reference to the above passage, the following assumptions have been made:

I. Path-dependent green investments will eventually most likely benefit growth as well as public finances in a country like India. II. If other green technologies follow the same pattern as that of solar energy, there will most likely be an easy green transition.

Which of the above assumptions is/are valid?

Select an option to attempt

Explanation

Assumption I is correct: The passage states that “moving early and gradually gives economies more time to adjust, allowing them to reap the benefits of path-dependent green investment without much disruption.” It also refers to “economies of scale” and provides the example of solar energy becoming 90% cheaper during the 2010s.
Though India is not mentioned explicitly, the reference to “economies” clearly includes developing countries that can gain from early and sustained green investments. The idea that “the more a firm does, the more it is likely to do in the future” implies long-term efficiency and growth potential, which can translate into improved public finances. Thus, this assumption is valid.

Assumption II is incorrect (but debatable): The passage uses solar energy as “the strongest evidence” of how costs fall with increased production, but it does not generalize this pattern to all green technologies. Each technology may have its own learning curve. Therefore, the assumption that all green technologies will follow the same path and lead to an easy transition extends beyond the scope of the passage.

However, one could argue that this assumption is also reasonable:
If other green technologies exhibit similar patterns of cost reduction through “learning by doing” and economies of scale—like solar energy—then the green transition could indeed become easier. This aligns with the logic of the passage, which emphasizes the cumulative benefits of early and gradual adoption. Hence, while the official answer is (a), (c) could also be justified with a broader interpretation.