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.

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?

The correct option is Both I and II.

Analysis of Assumption I:

The passage highlights that early and gradual investment in path-dependent green energy allows economies time to adjust and reap significant benefits without major disruption, while falling costs from economies of scale and learning by doing make green energy cheaper over time. For a developing country like India, investing in path-dependent green technologies lowers energy costs, minimizes chaotic transition expenses, and supports long-term economic stability and public finances. Therefore, Assumption I is valid.

Analysis of Assumption II:

The passage states that solar energy costs collapsed by about 90% in the 2010s, repeatedly beating forecasts, due to economies of scale and learning by doing. It notes that moving early allows economies to reap these path-dependent benefits seamlessly. If other green technologies replicate this pattern of rapid cost reduction and forecast-beating efficiency, the overall economic and technological shift toward green energy would be smooth and manageable. Therefore, Assumption II is valid.

Since both assumptions logically align with the given text, the overall correct answer is Both I and II.