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Engaging the private sector in innovation and transfer of green technologies

  • Published at 06:56 pm December 4th, 2020
climate change
Photo: Pixabay

A large global demand for innovation and transfer of green technologies cannot be met merely through ensuring public sector engagement

To combat global climate change and to contribute to the “stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system,” in 1992 the members of the United Nations agreed on an international treaty The United Nations Framework Convention on Climate Change (UNFCCC) (Art 2). 

The Convention was later supplemented by a legally binding protocol − Kyoto Protocol signed in 1997 and entered into force in 2005. After the completion of the first commitment period of 2005− 2012, the Kyoto Protocol is now on its second commitment period of 2012− 2020.  

Apart from the Kyoto Protocol, the parties to the UNFCCC have also agreed to further commitments such as the Bali Action Plan 2007, the Copenhagen Accord 2009, the Cancun agreements 2010 and the Durban Platform for Enhanced Action 2012. 

After the termination of the second commitment period of the Kyoto Protocol in 2020, the international legal regime on climate change will be governed by a separate instrument under the UNFCCC, the Paris Agreement concluded in December 2015.

To deal with global climate change, the Bali Action Plan introduced four basic pillars: mitigation; adaptation; technology development and transfer to support action on mitigation and adaptation, and financial resources and investment to support action on mitigation and adaptation and technology cooperation (FCCC/CP/2007/6/Add.1). 

This article intends to deal with the third pillar of the Bali Action plan- ‘technology development and transfer to support action on mitigation and adaptation’. 

Under the international climate change regime, provisions concerning technology transfer can be found under Art 4(1)(h) of the UNFCCC that requires the Parties to  “...promote and co-operate in the full, open and prompt exchange of relevant scientific, technological, technical, socio-economic and legal information related to the climate system and climate change, and to the economic and social consequences of various response strategies…”

Besides, Art 4(3) of the UNFCCC requires the Annex II Parties to the Convention (Developed Country Parties) to contribute financially for the purpose of transfer of technologies. Consequently, Art 11 of the Convention has institutionalised the requirement by establishing a financial mechanism. 

The purposes of the financial mechanisms established under Art 11 also includes the transfer of clean technologies to the non-Annex I Party developing and least developed countries.

Likewise, at the UNFCCC, in the recently concluded Paris Agreement, Parties have explicitly formulated their commitment to “a long-term vision on the importance of fully realizing technology development and transfer in order to improve resilience to climate change and to reduce greenhouse gas emissions” (Art 10 (1)). 

Parties have also agreed to “strengthen cooperative action on technology development and transfer” (Art 10 (2)).   Most importantly, Art 10 of the Paris Agreement has expressly acknowledged the necessity of “accelerating, encouraging and enabling innovation is critical for an effective, long-term global response to climate change and promoting economic growth and sustainable development.”

For the purpose of promotion of required technological innovation and dissemination under the Paris Agreement, all Parties also agreed to provide financial support to the developing country Parties “for strengthening cooperative action on  technology development and transfer at different stages of the technology cycle, with a view to achieving a balance between support for mitigation and adaptation” (Art 10 (6)).

However, a large global demand for innovation and transfer of green technologies cannot be met merely through ensuring public sector engagement. Instead, it is expected that private sectors will play an important role in large scale innovation and transfer of green technologies. 

The potential of private sectors in climate financing can be assumed on the basis that presently 86% of total global investment and financial flows are coming from the private sector (Fact sheet: Financing climate change action). 

Some scholars have predicted that the role of private sectors in future power supply and renewable energy supply will be vital even if the flows of public finances increase in the expected manner (Jessica Brown and Michael Jacobs, 2011). 

Hence, the Paris Agreement has required the Parties to “incentivize and facilitate participation” of both public and private entities in the mitigation of greenhouse gas emissions and “in the implementation of nationally determined contributions.” (Art 6 (4) (b), Art 8 (4) (b)). 

According to a recent report published by the European Patent Office (EPO) and International Renewable Energy Agency (IERA), although private sectors’ invention efforts for climate change mitigation technologies has been increased globally during the past decade, the challenge remains as to how those inventions should be integrated into reliable power systems. 

Besides, investments in innovation contain high levels of uncertainty in terms of return of investment. In both cases, it is the climate policy that can play an important role to integrate the clean innovation into local systems and create a stable and enforceable market for the invented clean technologies. 

While technological innovation, especially innovation of green technologies, is essential for a long-term global response to climate change and to ensure global sustainable development, it is essential to look for other legal regimes that might also require promotion of technological innovation. 

Accordingly, one can find related objectives of Art 7 of the Agreement on Trade-Related Aspects on Intellectual Property Rights (TRIPS), which also advocates that “the protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology…” 

In relation to technology innovation and dissemination, it is claimed that IPRs such as patent protection not only work as an incentive for innovation, but also facilitate dissemination of new innovations. This is because patents provide legal protection for an inventor to export to or manufacture in foreign markets. 

Besides, the international dissemination of technologies can also be determined by the number of patents filed in the country of destinations of the technology. However, due to lack of capacity to absorb new technologies and lack of clear incentives in large numbers of least developed and developing countries, determination of technology dissemination through the number of patent filing is still limited within developed or emerging regions. 

Rate of patent filing is also very low in Bangladesh. In this connection, the Bangladesh government should adopt a holistic approach to develop the national capacity of absorbing new technologies. 

Bangladesh should also take measures to upgrade the national IPRs system especially patent law and its enforcement mechanism in a manner so that it can attract private sector investors to invest in innovation of green technologies. 

Md Mahatab Uddin, PhD is working in International Centre for Climate Change and Development (ICCCAD) as a Visiting Researcher, his research interest lies in green technology, adaptation technology, technology transfer, intellectual property rights, artificial intelligence, precision agriculture and sustainable development. Dr Uddin   can be reached at  [email protected]

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