Technological innovation is one of the potential engines to mitigate environmental pollution. However, the implementation of new technologies sometimes fails owing to socioeconomic constraints from different stakeholders. Thus, it is essential to analyze constraints of environmental technologies in order to build a pathway for their implementation. In this study, taking three technologies on rural sewage treatment in Hangzhou, China as a case study, i.e., wastewater treatment plant (WTP), constructed wetland (CW), and biogas system, we analyzed how socioeconomic constraints affect the technological choices. Results showed that socioeconomic constraints play a key role through changing the relative opportunity cost of inputs from government as compared to that of residents to deliver the public good—sewage treatment—under different economic levels. Economic level determines the technological choice, and the preferred sewage treatment technologies change from biogas system to CW and further to WTP along with the increase of economic level. Mismatch of technological choice and economic level results in failures of rural sewage treatment, e.g., the CW only work well in moderately developed regions in Hangzhou. This finding expands the environmental Kuznets law by introducing the coproduction theory into analysis (i.e., inputs from both government and residents are essential for the delivery of public goods and services such as good environmental quality). A match between technology and socioeconomic conditions is essential to the environmental governance.
