Technology Transfers and Climate Change: International Flows, Barriers, and Frameworks

Discourse concerning international technology transfers to address climate change issues is typically based on a paradigm that is focused on North South technology flows and financial flows, especially in the context of official development assistance programs or offset projects under the Clean Development Mechanism of the Kyoto Protocol. This paradigm is useful for many analytic and negotiating agendas. However, it reflects an overly narrow conceptualization of the nature, sources, and methods of international technology transfers. It thus neglects important issues that need to be addressed in order to utilize more fully the potential of international technology transfers for climate change mitigation and/or adaptation.

This chapter proposes a complementary paradigm, which emphasizes the importance of trade and foreign direct investment as the principal mechanisms by which technology is transferred internationally. The paradigm reflects diversity in the geography of technology flows, a different focus on the types of international economic flows that facilitate technology transfers, a different set of barriers to international technology flows, and different institutional frameworks that can facilitate or impede technology flows.¹

The second section of this chapter presents these paradigms in a more detailed and comparative discussion.² The third section considers evidence about the geography of international technology flows, with an explicit recognition of developing countries as sources of such flows. The fourth section analyzes evidence about the barriers to international technology flows. The fifth section describes the international institutional frameworks affecting the flows. The sixth section discusses the implications of these paradigms and flows for international negotiations.

Paradigms of International Technology Transfer

The term "technology" continues to be used in common parlance to refer mostly to tangible goods, for instance, computer hardware; but it is typically used in the academic literature to include more intangible elements of organizations' activities as applied knowledge or know-how. Further, the term is used to include managerial know-how, not only in the engineering of production processes but also more generally in management processes.

Over time, the literature on international technology transfers has progressed from a relatively narrow definition of technology as "scientific and engineering knowledge, . . . which . . . are principally the outcome of R&D [research and development]. The transfer of this codified knowledge constituted technology transfer" in the earlier narrow notion of technology.³ Current notions of technology, however, include a second notion as well—technology as tacit knowledge that is embedded in firms' procedures and personnel. Though the first conceptualization leads to an analytic focus on explicit knowledge concerning specific products and their associated production processes, the second conceptualization leads to a focus on the capabilities and processes of firms, especially the tacit knowledge that is embedded in them. This encompassing notion of technology that includes both its "soft" and "hard" manifestations is now widespread in government policymaking and business strategy circles as well as academic circles, and it is reflected in the Stern Report on the economics of climate change.⁴

Relevant Technologies for Climate Change Mitigation or Adaptation

There are numerous lists of industries and products (both goods and services) related to climate change.⁵ A well-known list was developed by Pacala and [End Page 94] [Begin Page 95]

Table 4-1.

Types of Greenhouse Gas Emission–Reducing Technologies

Socolow on the basis of the fifteen "wedges" that they identified as having the potential to contribute a reduction of 1 gigaton of carbon dioxide equivalent per year by 2054.⁶ The United Nations Framework Convention on Climate Change (UNFCCC) has compiled a lengthy list, as presented in table 4-1.⁷

These lists of mitigation technologies differ in their level of detail and hence technological specificity, and they also differ in whether they include or exclude nuclear power in particular. At an aggregate level, however, these lists share many of the same technologies, especially those concerning energy efficiency and renewable energy sources, which are the focus of this chapter. Of course, the technologies vary in their cost-effectiveness in reducing greenhouse gas (GHG) emissions and in the scale of deployments required for them to have notable effects.^8...