Image: CTCN

Lack of tech­nol­o­gy trans­fer jeop­ar­dizes cli­mate targets

Many devel­op­ing coun­tries con­di­tion their nation­al cli­mate change con­tri­bu­tions sub­mit­ted under the Paris Agree­ment on receiv­ing fund­ing, tech­nol­o­gy trans­fer and capac­i­ty build­ing sup­port from devel­oped coun­tries. How­ev­er, the indus­tri­al­ized coun­tries have so far failed to deliv­er to the extent promised. Pub­lic-pri­vate part­ner­ships and oth­er ener­gy ini­tia­tives can only par­tial­ly com­pen­sate for this short­com­ing, accord­ing to a new study: while they suc­cess­ful­ly sup­port the expan­sion of low-car­bon ener­gy sys­tems, they con­tribute insuf­fi­cient­ly to tech­nol­o­gy trans­fer to the Glob­al South.

Devel­oped coun­tries have pledged to pro­vide $100 bil­lion per year from pub­lic and pri­vate sources for cli­mate finance start­ing in 2020. Tech­nol­o­gy trans­fer is par­tic­u­lar­ly impor­tant here: the devel­op­ing and emerg­ing coun­tries not only need mon­ey to expand sus­tain­able tech­nolo­gies, but also knowl­edge about low-car­bon technologies.

This goal has not yet been achieved — and not only because cli­mate financ­ing is lack­ing. “Most patents for low-car­bon tech­nolo­gies are owned by com­pa­nies in indus­tri­al­ized coun­tries. This gives them a big com­pet­i­tive advan­tage. They only share their knowl­edge when it is advan­ta­geous for them,” says co-author Andreas Goldthau (IASS/Uni Erfurt). Chi­na is the only emerg­ing mar­ket that has suc­cess­ful­ly attract­ed tech­nol­o­gy trans­fer through for­eign direct invest­ment. In order to tap into the Chi­nese mar­ket, com­pa­nies were will­ing to “trans­fer” their tech­nolo­gies, i.e. pass on knowledge.
Chi­na’s recipe for suc­cess is only trans­fer­able to a lim­it­ed extent

Chi­na’s suc­cess in build­ing a low-car­bon tech­nol­o­gy sec­tor is attrib­uted to the high inno­va­tion capac­i­ty of Chi­nese indus­try as well as pol­i­cy mea­sures. “These include the pro­mo­tion of joint ven­tures and knowl­edge trans­fer, but also a manda­to­ry domes­tic con­tent, mean­ing that for­eign investors must use prod­ucts or ser­vices man­u­fac­tured in Chi­na. With its large and prof­itable mar­ket, Chi­na was able to push through such mea­sures,” says first author Sil­via Weko (IASS/University of Erfurt). In oth­er devel­op­ing and emerg­ing coun­tries, how­ev­er, sim­i­lar efforts have proven inef­fec­tive or even counterproductive.

There, for­eign invest­ment in low-car­bon ener­gy sys­tems remains at too low a lev­el. Coun­tries are there­fore using the pre­dom­i­nant­ly fos­sil fuel tech­nolo­gies and finan­cial resources at their dis­pos­al. The dan­ger is that these coun­tries will remain depen­dent on fos­sil ener­gy in the long term.

Ini­tia­tives are com­mit­ted to expand­ing the pow­er grid, but too lit­tle to tech­nol­o­gy transfer

What can coun­tries do that want to increase tech­nol­o­gy trans­fer but can­not get it through inter­na­tion­al mar­kets or pol­i­cy? Tech­nol­o­gy trans­fer ini­tia­tives, such as pub­lic-pri­vate part­ner­ships or plat­forms like the Unit­ed Nations Cli­mate Tech­nol­o­gy Cen­ter and Net­work (CTCN), are seen as an oppor­tu­ni­ty for the ener­gy tran­si­tion in the Glob­al South. Such ini­tia­tives were intend­ed to fill the mar­ket gap, but their track record is mixed, accord­ing to the IASS researchers’ analysis.

Weko and Goldthau iden­ti­fied 71 inter­na­tion­al ini­tia­tives that include the trans­fer of low-car­bon tech­nolo­gies among their goals. A par­tic­u­lar­ly large num­ber of these oper­ate in coun­tries where only a small pro­por­tion of the pop­u­la­tion has access to elec­tric­i­ty. They are suc­cess­ful­ly improv­ing the devel­op­ment of sus­tain­able ener­gy sys­tems there. How­ev­er, only 26 of the 71 ini­tia­tives stud­ied actu­al­ly take on the task of tech­nol­o­gy transfer.

In order to increase knowl­edge trans­fer to devel­op­ing and emerg­ing coun­tries, the researchers believe it is essen­tial that indus­tri­al­ized coun­tries keep their fund­ing promis­es and pro­vide greater sup­port to the Unit­ed Nations Cli­mate Tech­nol­o­gy Cen­ter and Net­work. The gap can­not be closed with the cur­rent patch­work of ini­tia­tives. The link with trade also offers oppor­tu­ni­ties: For exam­ple, tech­nol­o­gy-import­ing coun­tries can nego­ti­ate bet­ter con­di­tions if they bun­dle their demand.