Authors:
Jim Watson, Rob Byrne, David Ockwell and Michele Stua, The Sussex Energy Group and Tyndall Centre for Climate Change Research SPRU, University of Sussex, UK.
Alex Mallett, Carleton University, Ottawa, Canada.
The research underpinning the following Policy Briefing was funded by the UK government Departments of Energy and Climate Change, and Environment Food and Rural Affairs. The research teams in TERI (in India, led by Prosanto Pal) and Tsinghua University (in China, led by Zhang Xiliang) have made major contributions to this research.
The Sussex Energy Group‘s series of professionally produced briefing notes highlight policy relevant findings from their broader research. Policy Briefs target key decision-makers and advisers to whom SEG research findings are of relevance.
Introduction
Low carbon technology transfer to developing countries has a central role to play in mitigating carbon emissions. It is a key issue for the international negotiations under the United Nations Framework Convention on Climate Change (UNFCCC). The promise of access to low carbon technologies was an important incentive for developing nations to support the UNFCCC in 1992. Although the Convention was intended to facilitate low carbon technology transfer, its success in achieving this has been limited. Many developing nations have expressed frustration that their expectations have not been met.
Despite the high profile of technology transfer within the UNFCCC negotiations, there is relatively little empirical evidence upon which to base policy. Low carbon technologies are diverse – in their stages of development, their target markets and their scale. They include early stage capital intensive energy supply technologies (such as carbon capture and storage), mass produced consumer goods (such as energy efficient light bulbs) and can be facilitated by new network infrastructures (such as smart grids). This diversity introduces new and unique barriers, opportunities and policy challenges which are not yet properly understood. Global policy solutions from other domains such as health and agriculture have only limited applicability. Furthermore, there is a need for urgent action if dangerous climate change is to be avoided.
This briefing note discusses these challenges, based on empirical research on India and China led by the Sussex Energy Group over the past five years[1]. The research is based on low carbon technology case studies including LED lighting, solar PV and more efficient coal-fired power plants. The research on India, undertaken with The Energy and Resources Institute (TERI), was carried out between 2006 and 2009. The insights from a follow-on study on China with Tsinghua University are tentative since full results will not be available until early 2011.
Definitions and Rationales for Technology Transfer
The term ‘technology transfer’ is often misunderstood in climate change debates, and has a range of meanings and interpretations. For some, it is simply the transfer of low carbon technological hardware from one location (e.g., a developed country) to another (e.g., a developing country). We take a wider view. Technology transfer also includes the knowledge and skills necessary for the recipient firm or organization to operate, maintain and develop the transferred technology. We also analyze it in the context of wider processes of low carbon innovation within developing countries.
Additional capabilities are required for a number of reasons. First, they strengthen the ability of developing country firms and organizations to operate and maintain technologies effectively – and to undertake processes of ‘learning by doing’ that improve technologies in the field. Second, they are often necessary since low carbon technologies need to be adapted to a particular developing country context (as in the case of coal gasification for India). Third, the transfer of knowledge as well as hardware can contribute to the process of ‘catching up’ by developing country firms, as a key component of industrial development policies.
It is this third rationale that often makes technology transfer discussions contentious. Some developing country policy makers emphasize the need for knowledge as well as hardware to improve the capabilities of their firms and industries. This framing can be seen as problematic by some developed country policy makers and firms, since it implies a pathway that could lead to the erosion of the current sources of their competitive advantage.
A range of policy challenges flow from this. There is a need to acknowledge the central role of firms as owners of low carbon technologies[2], rather than discussing such technologies as if they can be transferred at will by governments. Governments do not only need to identify strategies to manage the tensions over what constitutes technology transfer. They also need to implement frameworks and incentives that take into account the reasons why firms already make technologies available in developing countries – and to steer such processes in a more low carbon direction.
Building Indigenous Technological Capabilities
Our research supports a key finding from the economic development literature – that indigenous efforts within developing countries play an important, complementary role to the acquisition of technologies from international sources.
With respect to wind power in China, the national government’s 863 R&D programme has been an important source of capability building for leading Chinese firms. This has placed these firms in a better position to absorb foreign technologies – for example, via licensing and joint ventures. It has complemented other strategies such as selective take-overs and joint ventures which have improved access to ‘tacit’ knowledge embodied in skilled personnel. In the Chinese cement industry, technologies to improve efficiency (and hence, to lower emissions) are now bought from the domestic market. Our interviewees emphasized indigenous innovation as being much more important than international technology transfer in recent years.
