Tech Transfer Stymied by Lack of Climate Funding from Rich

DOE's Latest Financing Plan Just a Drop in the Bucket

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Reporting from Copenhagen

Deploying low-carbon technology in all nations is considered vital to slowing global warming, but little progress has been made so far at the Copenhagen climate talks on "technology transfer" deals that could bring high-tech to the poor.

A lack of climate funding commitments by the rich countries is holding up discussions.

"It’s hard to know what’s possible in terms of tech transfer — and what can actually be done — until you know how much [money] you have," Victor Menotti, executive director of the International Forum on Globalization, told Solve Climate in an interview.

There are no long-term dollar figures on the table yet for paying for a wider global warming pact. The $350 million, five-year energy efficiency effort U.S. Energy Secretary Steven Chu announced this morning is barely a drop in the bucket when experts estimate that tens of billions of dollars in financing and technology will be needed every year.

The result of this lack of money, said Menotti, is that "almost nothing important" has been agreed on technology transfer.

The world’s clean technology solutions are in the hands of the richest states. These nations also have the financial means to invent and develop the technologies of the energy future.

A transfer framework would level the playing field with poorer nations by requiring industrialized nations to pass on their clean energy know-how, technologies and manufacturing methods to developing states.

The scheme is not just wishful thinking, but a legal obligation under the U.N. Framework Convention on Climate Change (UNFCCC) — the seeds of which were planted back in the 1992 at the Earth Summit in Rio de Janeiro.

"This is not new, and it’s not aid," said Menotti.

As part of the Rio Declaration, world governments, including the U.S., agreed that wealthy countries must deliver the money and technology to fight climate change. This was reaffirmed in the 2007 Bali Action Plan signed by then-President George W. Bush.

For the poor, tech transfer is about more than combating climate change; it’s about economic development. A successful deal would boost clean energy R&D in developing economies and teach them how to manage technologies — on the dime of the wealthy.

In practical terms, this means an African nation could acquire the capacity to set up solar panel assembling and manufacturing plants, for instance.

For the exploding U.S. solar industry, tech transfer is seen as vital in getting relatively high global solar power costs on par with cheap coal.

"We think it’s important that you have solar manufacturing plants throughout the world. You achieve better cost efficiencies for solar by manufacturing close to where the product is consumed." Rhone Resch, president and CEO of the Solar Energy Industries Association, told SolveClimate.

The exact dollar figure needed to set a tech transfer deal in motion is not clear. Since developing technology is wrapped up with every aspect of combating climate, it’s piece of the pie would be large. The total costs of reversing warning in the long run could be up to $200 billion a year by 2020, according to UN figures.

The commitments on the table in Copenhagen are miles away from that. So far, $10 billion a year over three years in fast-start financing has been proposed. The insufficient amount has earned the package the nickname "fast-finish" funding from green groups.

Menotti told SolveClimate that the quickest way to unclog tech transfer talks is for nations to put on the table a range of figures on long-term financing, with the U.S. leading the charge.

"The U.S. is the indispensable 800 pound gorilla in the whole deal," said Menotti. "It’s the biggest financier, the one who can make a difference."

Hurdles Abound

Even if a dollar figure is declared in the near term, a slew of other concerns will likely bubble to the surface and trip up tech transfer discussions further, observers say.

Topping the list is what type of governing body would be established to manage the flow of cash and make decisions over which technological solutions to deploy.

Poor nations want tech transfer handled by the UN climate convention, where they have more of a say. A handful of rich nations, led by the U.S and backed by the EU and Japan, are adamantly opposed to this, preferring groups like the World Bank, which tend to push projects favored by Western agendas.

Agreement on this is unlikely in the near term.

In the past, the battle over intellectual property rights has been the big hiccup in tech transfer discussions. Not so in Copenhagen, said Menotti. A new report by the DC-based Ecologic Institute confirms this:

"Intellectual property does not, currently, seem to be a major factor influencing the transfer of climate technologies either positively or negatively in a North-South context, and should therefore not be given prominent attention in the negotiations," the authors wrote.

This should not be mistaken for a sign of progress on IPR, however, said Resch. The fact that it’s not considered a big barrier to success in Copenhagen is probably an "indication that the [UN] discussions are not all that deep yet."

"They’re still very much at the surface. Intellectual property tends to derail the conversation quite quickly," Resch added.

Country-to-country negotiations and country-to-company talks on IPR are occurring "much faster and more fruitfully" than discussions happening in Copenhagen, he said, particularly between the U.S. and China.

The issue of IPR boils down to this: Poor nations want the rich to share their clean energy technologies openly. Naturally, companies in rich countries that own the intellectual property are opposed.

Models for solving the IPR challenge exist, namely in the licensing of HIV medications to poor nations.

But for clean energy, IPR remains as stuck as ever in the U.S., said Menotti. The U.S. House of Representatives voted 432-0 earlier this year calling for absolutely no weakening of IPR laws in Copenhagen.

The American delegation "won’t even talk about [IPR], and it’s commanding that text delete any reference to intellectual property in the negotiating text," said Menotti.

Resch admits that U.S. solar companies have expressed "very grave concerns" over IPR. Companies are seeking protection of their technologies for eight to 10 years before they hand them over openly.

Still, he said, a tech transfer deal is absolutely vital.

"For solar to be a wedge on carbon, the technology has to be transferred and unilaterally shared around the world. This isn’t about protecting one company’s business plan or technology development. It’s about making solar a universe energy source in all countries."

Clock is Ticking

If there’s no deal on technology transfer out of Copenhagen, "then we lose a huge opportunity to accelerate the clean energy revolution that we keep hearing is ready to roll out," Menotti said.

Big solar, it seems, would agree. When asked if a deal on tech transfer is crucial by the end of 2010, the new deadline for finalizing a legally binding climate pact, Resch said, "Yes — if we want solar to be a big part of our energy portfolio in the near future."

"By 2020, the solar industry can provide 12 percent of the electricity generation in the United States in Europe and in the developing countries. … However, the tech transfer piece has to be resolved in order to drive down the manufacturing costs.

"Without a tech transfer piece, solar and many of the other cutting edge technologies will be limited in their availability in developing countries and will be hampered in reducing pollution from electricity."


See also:

S&P, World Bank Launch Emerging Markets Index Based on Carbon Efficiency

Western Institutions Bankrolling Dirty Power in Developing Countries

China’s Entrepreneurs Are Ready, But Is Their Government?

China’s Smart Grid Ambitions Could Open Door to US-China Cooperation

Adapting and Mitigating Climate Change: A Deeply Nuanced Approach

(Photo: Dominic Sansoni/World Bank)