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03 Jun 2016

Research: Transferring Clean Technology to Emerging Countries

Does the Clean Development Mechanism (CDM) as defined by the Kyoto Protocol provide real support for the transfer of climate-friendly technologies to developing countries? A study carried out with 137 companies provides new insights.

This article from Joachim Schleich is the subject of the 26th  GEM LAB Executive Summaries.

Technology transfer from industrialized to emerging countries is important to meet ambitious climate policy targets. Two-thirds of the survey respondents reported that the transfer of technology and knowledge involved in previous CDM projects was medium to very high, thus confirming the key role of the CDM in the transfer of technology (TOT).

Energy projects involve more technology transfer than other projects

From the article

Factors driving international technology transfer : empirical insights from a CDM project survey
Climate Policy DOI: 10.1080/14693062.2015.1069176
Carsten Gandenberger, Miriam Bondenheimer, Joachim Schleich, Robert Orzanna, Lioba Macht

The study results demonstrated that TOT is higher for projects related to renewable energies or energy efficiency for industrial processes than it is for projects related to agriculture or biogas.

The study distinguished between the transfer of knowledge (KT) and the transfer of equipment (ET). In the case of KT, the researchers highlighted that TOT is higher for technologies that are between two and five years old. The authors also considered the complexity of technology and concluded that TOT is higher for technology perceived to be more complex.

Key role for international consultants

The researchers looked at collaboration between companies participating in CDMs. Technology transfer was found to be stronger when international consultants were involved in the project rather than joint ventures, subsidiaries or direct international investments.

The study demonstrated that export or market transactions could be a good fit for CDM projects. This is contrary to previous research which suggests that low levels of interaction between technology suppliers and recipients in export transactions are not favorable to TOT. However, the researchers highlight that CDM consultants play a key mediating role between the technology supplier and recipient.

The 137 CDMs in the study were located in 15 countries, including China, India, Indonesia, Malaysia and Mexico. The countries' ability to absorb TOT was variable as was their past experience with CDM projects. However, these two factors did not impact the TOT results.

Currently, CDM project validation hardly considers a country's ability to absorb TOT. The authors suggest that the approval process for CDM projects could be improved by expanding criteria to explicitly include TOT and give priority to complex or novel technology. Projects built around renewable energy and process efficiency should also be given greater priority.

Key points

  • The transfer of technology is more efficient for recent technology (two to five years old), complex technology, and technology tied to renewable energy or process efficiency.
  • CDM projects facilitate the transfer of climate-friendly technologies from industrialized to emerging countries.
  • Technology transfer is particularly high for CDM projects using export interactions supported by international consultants.
  • The CDM approval process could be improved by explicitly requiring TOT
Contacts
Mara Saviotti