Technology Transfer Key to New Climate Deal: Report

5 October 2009

While there is a general consensus among climate negotiators that technology transfer will be part of a Copenhagen agreement, a new report suggests that technological innovation is lagging far behind the needs for combating climate change.

Recently, world leaders attending the G20 Summit in Pittsburgh called on the world to "take steps to facilitate the diffusion or transfer of clean energy technology including by conducting joint research and building capacity." But a new report by London-based Chatham House suggests that the business-as-usual process of technological innovation and diffusion will take up to 25 years to tackle climate change.

At the core of the issue is the role of Intellectual Property Rights (IPRs) in spurring technological innovation and diffusion. The relationship between IPRs and climate change is complex. IPRs have different implications in different areas of environmentally sound technologies (ESTs). For example, the top four wind-energy patent owners - who collectively own 13 percent of all wind patents - have a 57 percent share of the global market for wind turbines; whereas for solar panels, many of the top 10 manufacturers are not patent holders, the Chatham House report says.

In which field it will be useful to patent will depend on competition conditions, stages of development and market structure of the specific energy system. On one hand, a patent portfolio can speed up diffusion of innovation as it attracts venture capital, provides against litigation and facilitates alliances, mergers and acquisitions. But patenting can also slow down diffusion because of litigation. In general, the authors say greater international cooperation is needed to boost technology diffusion rates. Developing countries thus have an opportunity to leapfrog the resource-intensive industry, used by Western countries but will need assistance, the report says.

The report provides six recommendations to foster this international cooperation. First, global demonstration programmes for large scale, high risks technologies - such as carbon capture and storage - must be supported. Second, proper funding mechanisms as well as international collaboration programmes need to be established. Third, the potential of technology standards bodies setting environmentally friendly standards must be maximised.

Fourth, an open innovation mechanism - for example through the establishment of a technology prize, and other open innovation platforms - has to be developed. Further, model agreements for research and development (R&D) may be drafted. Fifth, publicly backed patent pools and knowledge-sharing platforms should be created through taxation or other incentives. Finally, a global database on licensing data and best practices is needed.

The European Commission has acknowledged that developed countries need to fund developing countries' expenses in mitigating their greenhouse gas emissions and adapting to the impacts of climate change. Thus finance will be an essential part of the deal in Copenhagen in December. As EU Environment Commissioner Stavros Dimas said "No money from developed countries means no deal in Copenhagen,"

More information

The Chatham House report "Who Owns Our Low Carbon Future?" can be accessed here: http://www.chathamhouse.org.uk/files/14699_r0909_lowcarbonfuture.pdf

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