Technology transfer: enabling innovation and technology development in the Global Tropics

By Patrick Clapp

Patrick attended the 2015 United Nations Climate Change Conference (COP21) in Paris.

Abstract

The United Nations Framework Convention on Climate Change (UNFCCC) has facilitated the exchange of mitigation and adaptation technologies to varying degrees of success. The negotiating Parties of a new universal agreement under the UNFCCC intend to strengthen technology transfer under the international agreement to achieve mitigation and adaptation goals. This paper assesses the current mechanisms, some fundamental political stalemates and barriers to effective technology transfer, before discussing potential for improvement of current systems, such as the technology needs assessments (TNAs) and the Technology Executive Committee (TEC), as well recommends some novel approaches to enhance technology transfer under the Paris climate agreement.

Recommendations

1.     In order to establish effective “enabling environments” that encourage and facilitate technology transfer, the Climate Technology Centre and Network (CTCN) should establish a process for the creation of National Systems of Innovation (NSIs) funded by developed countries. NSIs in developing countries must include levels of connection and collaboration between research institutions, product firms and internationally connected individuals. 

2.     The intended Technology Framework should include actively identifying and facilitating high-impact solutions. This should be achieved through a database that is actively maintained and accessed by the aforementioned NSIs so that parties’ needs can be matched with the institutions and firms that have the potential to collaborate for research projects. The CTCN should improve the current online database, technology transfer clearing house (TT:CLEAR), by developing pairing or matching algorithms and increasing the awareness of the database, which will assist in overcoming current barriers to technology transfer.

3.     The TEC, CTCN and Green Climate Fund (GCF) should reinforce a broad definition of technology that includes knowledge about the operation, maintenance and development of both physical technologies and technologies in the form of processes and methods. The TEC should support the training of individuals who can disseminate this information and interpretation at local scales within SIDS and LDCs. The next round of TNAs must also be improved to engage with a wider range of stakeholders who are engaging with the broad definition of technology above. This definition should be incorporated in all technology projects through criteria in assessments of needs and post implementation assessments.

Introduction

The UNFCCC exists to limit anthropogenic climate change.[1] At the fifteenth session of the Conference of the Parties (COP 15) to the UNFCCC in Copenhagen, parties took note of the Copenhagen Accord and agreed to limit temperature increases to 2 degrees Celsius above pre-industrial levels.[2] Building on the Copenhagen Accord, COP21 intends to establish the steps that will achieve the necessary reductions.[3] COP 20 in Lima produced a draft text to have all of 2015 to process the text into a workable and achievable set of negotiations at COP 21. Currently, a gap exists between the intended nationally determined contributions (INDCs) and the scientific data and evidence that indicates what will be required to limit warming to 2 degrees.[4] Effective technology transfer will increase technology diffusion and technological capacities, which will be essential for scaling-up efforts beyond COP21.

Climate change is expected to be particularly noticeable across Earth’s tropical region, which is found between 23° North and South[5]. The tropics contain most Small Island Developing States (SIDS) and numerous least developed country (LDC) states, whom will be subjected to some of the most severe and rapid changes in climate conditions and weather events in the coming years.[6]  The negotiating text pre-amble conveys the importance of considering “particular vulnerabilities and specific needs” of countries including LDC parties and SIDS when setting expectations. This understanding, articulated as Common But Differentiated Responsibility (CBDR), is the context in which this paper considers technology transfer. The tropics have had limited research and development opportunities for technology but these will increase as the tropical population continues to boom and learning and research centres develop. These centres provide an opportunity to develop technologies that are suited to the tropical climate.

This paper will assess the existing mechanisms and the political challenges that will be addressed at COP21. It will also address some of the limitations around the steps between the completed technology needs assessments (TNAs) and the implementation of the priority projects from these technical assessments.  This paper will consider the literature and theory around enabling environments and the role of innovation for successfully adopting and absorbing technologies. 

Technology transfer addresses how technology, both physical and the associated knowledge, can go from the research and development stage (R&D) to an internationally transferrable product. Successful technology transfer involves the transfer of knowledge and hardware to achieve installation, maintenance and continued development of the technology. One driving idea behind technology transfer is the concept of “leapfrogging” or skipping along the development pathway and bridging the gaps between developed and developing countries.[7] The idea of leapfrogging is that developing countries get access to technology and knowledge that would not otherwise eventuate in their economies until decades into their projected future and endeavour to bridge the gaps.

 Existing mechanism

Article 4 in the UNFCCC text emphasises the significance of technology transfer and articulates that all countries should promote and cooperate in both developing and transferring technologies.[8] At COP 16 in Cancun, the Technology Mechanism (TM) was established to enhance this objective, which consists of the Technology Executive Committee (TEC) and the Climate Technology Network and Centre (CTCN).[9] Technology development and transfer finance have so far been facilitated through the Global Environment Facility (GEF), specifically through the Poznan strategic programme, and the Clean Development Mechanism (CDM) under the Kyoto Protocol.[10] The TEC is the policy body of the TM, which promotes technology development and transfer to increase climate change action, create a broad outlook on technological needs and instigates use of road maps and action plans. It seeks to engage internationally, regionally and nationally with private companies, public entities as well as research and academic communities.[11] After the establishment of the Green Climate Fund (GCF) at COP16 in Cancun, the GCF will be responsible for financially supporting technology transfer projects.[12]

Beyond COP21, the Parties to the Paris agreement will adapt a Technology Framework, as stated in both options for article 7, paragraph 3 of the negotiating text.[13] This framework is designed to bring overarching direction, which will guide the existing Technology Mechanism. It should take an active role in identifying high-impact projects. The Technology Framework’s operations should involve connecting needs from Technology Needs Assessments with the research and business institutions whom have the capacity to fulfil the needs.

 Conceptual problems with technology transfer 

This paper identifies two conceptual problems with the current discourse stage of technology transfer. The first occurs with the understanding and perception of the word ‘technology,’ the second concerns barriers to effective implementation.

Understanding technology

Despite improvements in shifting the mentality of technology in the discourse around technology transfer, there is still significant capacity to broaden the mindset of stakeholders and national bodies. A simplistic understanding of the word ‘technology’ is as a physical tool. However, in the context of technology transfer, a more comprehensive interpretation of technology should encompass soft-technology that is associated with any physical counterpart. 

The Special Report of the Intergovernmental Panel on Climate Change (IPCC) Working Group III on Methodological and Technological Issues in Technology Transfer defines technology transfer as:[14]

 “A broad set of processes covering the flows of know-how, experience and equipment for mitigating and adapting to climate change amongst different stakeholders such as governments, private-sector entities, financial institutions, non-governmental organisations (NGOs) and research/education institutions.”[15]

 Although UNFCCC authors and technology transfer experts acknowledge this broader definition, this holistic understanding has not disseminated to all stakeholders or even government officials who prepare technology transfer documents.[16] The transfer of both physical objects and understanding of how to operate, repair and innovate technologies is essential for successful technology transfer.[17] The diffusion of this wider understanding, which includes “know-how and experience” in addition to physical technologies, is fundamental to successful engagement in SIDS and LDCs throughout the tropics. The technology framework should incorporate soft technology (knowledge of operation, maintenance, repair and improvement) objectives as part of the “overarching direction” it provides for technology transfer.[18] Without expanding the understanding of physical technologies and processes, these states will be unable to meet reduction targets.

Barriers

Another conceptual adjustment that is required for effective technology transfer for SIDS and tropical LDCs is to alter the emphasis on intellectual property right (IPR) modification as the primary way to facilitate technology transfer and examine alternative ways to overcome the current barriers. The geo-political divide for overcoming these barriers often reverts to a North-South debate.[19] This divide is more formally recognised through distinctions of developed countries for the North and the Least Developed Countries (LDCs) as representatives of the global South.[20] Developing countries are demanding assistance to extend their development and the UNFCCC, amongst others, is acknowledging the importance of equity and justice.[21] Developing countries regularly characterise barriers almost completely as intellectual property rights (IPRs).[22] IPRs have been a fundamental sticking point in previous negotiations.[23]  Despite constantly being raised in the lead up to negotiations and in negotiations specifically, IPRs are only referred to in one UNFCCC document in the last twenty years.[24] Although LDCs and SIDS will require funding to overcome some barriers, there are longer term benefits in considering novel and innovative responses to addressing technology transfer barriers.

Humans in developing countries have the collective rights to fulfil their rights and pursue development within their country, which all agreements made under the UNFCCC endeavour to acknowledge.[25] LDCs and SIDS, particularly those in the increasingly populous tropics, are attempting to balance public demands for national social and economic development with effects of climate change.[26] The tropics covers 40% of the world’s surface and house 40% of Earth’s population, expected to reach 50% by 2050.[27] The UNFCCC relies upon CBDR to acknowledge and respect the different capacities of negotiating states and the respective historical greenhouse gas (GHG) emissions.[28] Developing countries expect to receive support,[29] both financial and technical, in their efforts to adapt to the effects of climate change and also to limit their emissions. CBDR, in explicit or implicit form, remains a major negotiating point at COPs. At the October session of the Ad Hoc Working Group on the Durban Platform for Enhanced Action (ADP) in Bonn, developing countries collectively spoke out at the text produced by the co-chairs and insisted that certain CBDR elements be reinstated.[30] The negotiating text that will be taken to Paris reflects the increase to 54 pages and now has 7 technology transfer paragraphs that representatives will discuss. 

IPRs are only one barrier to technology transfer. Miller et al. (2015) assessed energy-producing technologies in developing countries and assert that there are multiple barriers in developing countries: lack of appropriate finance for energy access enterprises; pervasive fossil-fuel subsidies that sustain major distortions to the entrepreneurial environment for clean energy; adversarial regulation of alternative energy service business models such as mini-grids; and aggressive intellectual property rights enforcement. [31] IPRs will remain one of the barriers to efficient transfer technology. However, as LDCs and SIDS find more innovative ways to circumvent these barriers and alter their belief that IPRs are the sole limiting factor, developed countries should assist in meeting a proportion of the costs until LDCs and SIDS develop other ways to attract funding and development for climate change technologies, which will be addressed further in section 4 and 5.

Assessment-stage issues for technology transfer

 Non-Annex I Parties have used TNAs to assess and prioritise the most important technologies in various industries, limit GHG emissions and prepare for damaging effects of climate change. Some TNAs have only been intra-governmental,[32] and whilst this is an important element of the process, it is not the comprehensive approach that is set out in the UNDP TNA handbook.[33] Future TNAs require more expansive stakeholder engagement. A database of technology projects and examples of effective facilitating frameworks could be a useful way to ensure countries establish a receptive environment for technology transfer.

The TNA process does not do enough to engage with all stakeholders. TNAs have endeavoured to facilitate national guidance and ministerial (department) co-operation, but there have still been limitations on involvement and consultation. Full participation and engagement is critical to positive reception and national ‘buy-in’ to TNAs and technology projects, particularly at a local scale.[34] In SIDS and LDCs, this local acceptance is essential, because many of the changes required involve the adjustments from smaller communities. Although TNAs have been completed by 31 developing countries,[35] they would be particularly suitable for remaining LDCs and SIDS. Identifying the specific technological needs with a sense of urgency enables the UNFCCC to further develop the facilitation of technology transfer. TNAs have endeavoured to address the specific limitations and restrictions around the transfer of both mitigation and adaptation technology.[36]  TNAs are an effective idea that have so far been inadequately completed.                                                                                     

Smaller local communities are essential to the uptake of technologies and process changes and representational involvement would encourage broader support from the community as a whole. The TEC should recognise the potential to train individuals who can spread this awareness and influence the local acceptance of technologies and any required mentality shifts.[37] Despite addressing the necessity of transfer of soft-technology and the knowledge that is intrinsically connected with hardware, many projects have still inadequately transferred the soft-technology.[38] If associated soft technology (know-how and experience) is not transferred, developing economies’ and firms’ capacities to effectively use physical technologies are undermined. 

All stakeholders in developing countries are unlikely to be aware of all technologies available or perhaps the ways in which existing technologies could be utilized in a different context. Limited information dissemination is a current failure of TNAs. Nationally appropriate and locally suitable technologies are essential to effectively address climate change in both mitigation and adaptation contexts, particularly in the unique climatic situations of tropical countries and island states.  This concept can also be integrated with the necessity to have connections between domestic bodies: universities, research and production firms and government departments. More should be done to facilitate access and awareness of the technologies, particularly adaptation technologies, that have so far been neglected.

The TM have used significant time and funds for the assessment stage of TNAs. The TEC and CTCN have compiled the results of the work that they have already completed and have established.[39] The TEC is endeavoring to provide access to all relevant material through an online clearing house called TT:CLEAR.[40] This is designed to provide access to workshop materials and more than 700 technology briefs as well as 290 TNA project ideas. The recent website redesign that went into TT:CLEAR is a positive step,[41] but there should be more efforts to facilitate connections between developing countries, developed countries, donors, NGOs and research institutions. The TEC must continue to develop the awareness of the online database and improve the formulas that match the briefs and projects. Furthermore, the Technology Framework,[42] should be implemented with clear intentions about actively seeking to connect relevant projects and actors. Matching or pairing donors or research institutions to developing tropical states technological needs will assist in overcoming barriers to technology transfer.

Technology transfer’s implementation issues

In order to facilitate more successful and sustained benefits from technology transfer, the TEC should demonstrate, and the CTCN should facilitate, national systems of innovation (NSIs) that would function as an integral part of ‘enabling environments’. NSIs are enhanced connections between different technology-relevant actors. NSIs will ideally unite development, research, production and commercial entities to ensure that receiving technology is not the only element of transfer that occurs, and that products continue to be developed and produced domestically.[43] NSIs are crucial for increasing national efforts. Ockwell and Byrne (2015) directly address the need for national systems of innovation (NSIs) in developing and emerging countries. [44] This development is enhanced by the transfer of intricate knowledge about running, maintaining and repairing technology. NSIs give research bodies the freedom to continue improving upon transferred technologies and adjusting them to suit their state’s specific environmental and social requirements.[45] They are essential for encouraging development within developing countries and government departments should encourage and facilitate but not direct them.[46] The TEC should ensure NSIs can be demonstrated and explained clearly for emerging and developing economies. Technologies cannot stagnate after transfer but should continue to develop and improve so that GHG emissions can be limited. 

A concern about the CTCN is that it will continue to grow too large, stretch too thinly and lose some of its intended effectiveness.[47] The CTCN, as stated on its website, aims to provide “technical assistance at the request of developing countries to accelerate the transfer of climate technologies; create access to information and knowledge on climate technologies; and foster collaboration among climate technology stakeholders via the Centre’s network of regional and sectorial experts from academia, the private sector, and public and research institutions. These intentions will be undermined if contact-points are not technologically literate. The CTCN endeavours to incorporate various experts and centres of excellence, which can subsequently be matched against requests.

Currently national designated entities (NDEs) make the requests to either the CTCN for policy or implementation assistance. National designated entities (NDEs), the current form of national co-ordinators of technology transfer, are very different to NSIs or climate relevant innovation-system builders (CRIBs), which are one specific suggestion about how to create national systems of innovation. NDEs are small groups at most and are essentially contact points. CRIBs were proposed by Ockwell and Byrne (2015) on the basis of papers by Ockwell in 2009 and Sagar in 2009.[48] CRIBs are intended to be institutions that foster the growth of and connect relevant national actors, target and coordinate, communicate with international counterparts.[49] The concept of CRIBs is designed to counter unwieldy growth and[50] strengthen the connection between already-existing national bodies rather than extend the workload of external experts. CRIBs could also serve an important role in coordinating other national UNFCCC efforts. Establishing these national, and subsequently international, networks of innovation will theoretically increase the flow, creation and production of locally-appropriate technologies.

Innovation is not about rapid and significant changes to existing technology.[51] Although that is one possible interpretation, a more realistic understanding of innovation is viewing it as how best to make the adjustments needed to spread the technology and know-how very specifically through a country.[52] The term ‘enabling environments’ has been used on multiple occasions in UNFCCC draft texts and previous agreements.[53] It is generally used to refer to system wide changes that should be made in order to facilitate and support entrepreneurs. This incorporates having the legal, financial, social, political and technological framework that is conducive to transferring technology. However, examples of technology transfer and innovation give mixed results. Transferring or guaranteeing access to technologies that will fulfil TNA projects might sound positive, but when considering a broader objective of increasing innovation and domestic capacity, this may stifle innovation in this particular technological area. A photovoltaic project in India did not increase innovation or productivity around solar energy production and development because existing technologies were able to meet the demands of the project.[54] This is a limited-success occurrence of technology transfer because ideally, transferred technologies will continue to develop and adjust to fit the local market into which they have been transferred.  

Technology transfer has only produced one instance of a country ‘leapfrogging’, and then overtaking other industrialised nations in the production of technologies. China has become global leader in wind energy but shouldn't be considered as a typical example.[55] It is unlikely that developing economies or SIDS will take frontier technologies and then become a world leader in that particular field. However, states in the tropics can be capable of developing uniquely-suited technologies in their own state and other states throughout the tropics. This would be an ideal outcome for a tropical developing state with an effective NSI and environment that enables the adoption and improvement of climate technology. It is crucial for tropical states, particularly LDCs and SIDS, to have an example of how effectively bodies within their own country can cooperate and continue to innovate. NSIs must be designed so that they address any social, cultural, political and other internal barriers that may be preventing the diffusion of technology across a country.

Conclusion

A core message of this paper is that technology transfer is a multifaceted process and that the act or action that actually involves transferring technology, either hard or soft technology, is a step that is early in the process. Continued development is an absolute necessity for successfully achieving collective adaptation and mitigation goals. It is conceivable that firms or bodies in developing and emerging economies find more locally suitable and appropriate ways to develop, produce or even frame the technology that assists mitigation or adaptation, particularly for tropical and island LDCs.

TNAs have been moderately positive so far, but require more comprehensive engagement to interact with local communities. TNAs have provided useful information and the online database of this information is a useful progression point. However, this paper has identified flaws in the passive approach of the TT:CLEAR online database. This article suggests that the TEC should take a more active role in encouraging and facilitating the connections between technology proposals from TNAs and research or technological firms who have the capacity to create, adapt and develop the necessary technologies.

The lack of networks of innovation in developing countries reduces the enabling environment for adopting and producing technologies. Currently, projects are dumped onto stakeholders. A method must be developed to better connect and match research and needs of developing countries, particularly those in the tropics whom will be subjected to extreme weather events. An element of this facilitation should involve the establishment of national systems of innovation in developing countries that are coordinated by technological experts who can identify potential partnerships. Furthermore, technology projects should have a goal of innovation, which will develop technologies that are better suited to developing country environments. This is essential to maximise the returns on technological investment. All of these improvements are vital in fulfilling CBDR and bridging the gap, both financial and technological, between developed and developing states.

Full Footnotes and Bibliography can be found here or by copying the following URL into your browser: http://bit.ly/Patrick-Clapp-2015