[A2k] Developing countries call for new technology transfer mechanism

[Sangeeta]

Title : TWN Bonn News Update No.4
 Date : 06 June 2008

 Contents:

TWN Bonn News Update No.4

6 June 2008
Published by Third World Network
www.twnside.org.sg


Developing countries call for new technology transfer mechanism

Bonn 5 June (Meena Raman) --Major developing countries have called for the
creation an international mechanism under the UN Convention on Climate
Change aimed at operationalising the transfer technology to developing
countries and also assist them in adapting or developing technologies of
their own to address climate change.

Concrete proposals were presented among others by China, Brazil, Ghana,
India, Pakistan and Bangladesh (on behalf of LDCs) on barriers to technolog=
y
transfer and the measures and institutional mechanisms for overcoming these=
,
at a roundtable discussion at a meeting of the UNFCCC held in Bonn on 3
June.

The countries were addressing the issue of how best to accelerate, deploy,
diffuse and transfer affordable environmentally sound technologies from
developed to developing countries to address the challenge of climate
change. Technology transfer is one of the two main commitments that
developed countries have made to developing countries under the UNFCCC, as
well as the Bali Action Plan, the other being transfer of financial
resources.

While most of the developing countries highlighted the need to address the
effects of intellectual property on access to technology, and the need for
government and international actions, major developed countries instead
stressed the importance of IPRs and asked developing countries to create a
favourable environment to attract the private sector to invest and transfer
technology. The US saw IPRs as strengthening access to technology instead o=
f
a barrier.

Parties at the Ad Hoc Working Group on Long-term Cooperative Action (AWGLCA=
)
were exchanging views at the workshop to consider effective mechanisms and
enhanced means for the removal of obstacles to, and provision of financial
and other incentives for scaling up of the development and transfer of
technology to developing country parties.

According to the note by Chair of the AWGLCA, Luiz Machado of Brazil, the
objective of the workshop was to deepen understanding and clarify elements
contained in the Bali Action Plan. The interactive exchange is to contribut=
e
to the emergence of a common understanding of what needs to be negotiated i=
n
order to reach an agreed outcome.

China proposed an innovative international mechanism for the development an=
d
transfer of environmentally sound technologies (ESTs). The mechanism would
comprise an institutional arrangement, an innovative financial mechanism,
and performance assessment and monitoring.

It said that ESTs may only be effective when they work as a whole package
which include hardware (devices, equipment, process and complementary
technological system etc); software (awareness, knowledge, information,
know, intellectual property rights, designs etc); human resources; financia=
l
resources to make development, diffusion and transfer to happen and an
enabling environment (regulatory framework by both developed and developing
countries, appropriate institutional arrangement and infrastructure).

An innovative mechanism is needed to implement the technology transfer
obligations under the Convention as well as the Bali Action Plan, as little
progress has been made on this issue. The barriers to technology transfer
need to be overcome, as ESTs play a crucial role. The development, diffusio=
n
and transfer of ESTs need to be speeded up to meet the challenge of climate
change, said China.

It proposed that an intergovernmental body under the UNFCCC should be set u=
p
which would be implementation oriented and operational in focus. It would
provide guidance, advice and recommendations; coordinate actions by
different international stakeholders as well as governments; guide and
supervise the utilization of a special technology transfer fund which would
be based on public finance; promote communication and information and
knowledge sharing; and which would monitor and assess the performance and
progress of technology transfer.

It proposed that the intergovernmental body under the UNFCCC could be a
Subsidiary Body on the Development, Diffusion and Transfer of ESTs. Under
this body would be a Strategic Planning Committee which would relate to a
number of panels, including a technology needs assessment and information
panel, intellectual property rights coordination panel, enabling policy
panel, financial panel, capacity building panel, and monitoring and
assessment panel.

It said that priority should be on policy dialogue, coordination for better
incentives to the private sector and markets, financing basic research and
development, and direct transfer and diffusion of publicly owned
technologies

China proposed the establishment of a Multilateral Technology Acquisition
Fund (MFTA) for climate technologies. It said that the fund could be based
on a public private partnership framework for financing of the development,
diffusion and transfer of ESTs by linking public and private sector finance=
.
A significant amount of public finance from developed countries should play
a leading role in guiding and attracting private financial resources, it
said.

Public finance from developed countries can be sourced from research and
development budgets, revenue from energy and environmental taxes and revenu=
e
from auction of carbon credits.

Among the incentives for the private sector, China proposed policy
instruments such as tax exemptions for EST exports of companies in develope=
d
countries; subsidies to encourage research and development and transfer of
ESTs; favourable conditions for EST-related export credits, subsidies etc.
It also said that there should be removal of technology export bans and
other regulations, policies and measures. Venture capital might be a typica=
l
form for private investment in ESTs.

China also proposed a system of performance assessment and monitoring on th=
e
speed of technology flows (to avoid lock-in effects of technology choices
now being made in developing countries, and the needed time for innovation,
research and development and diffusion of technologies) and the range of
technology flows (which should cover most of the meaningful sectors with
larger market share and penetration). It should also cover the effectivenes=
s
in terms of emission reductions, access to affordable and least cost
technologies, and expected benefits.

Brazil also called for a =B3coherent and comprehensive instrument=B2 for
technology development and transfer, under the UNFCCC. This could be a
Technology Protocol or other approaches.

Giving the rationale for this proposal, Brazil said there was a need for a
technology revolution, given the urgent challenges faced by developing
countries due to climate change. Given the extraordinary challenges, it sai=
d
that it is important to act clearly beyond the =B3business as usual scenari=
o=B2
and that there is need for a =B3beyond the box=B2 approaches.

Brazil spoke about existing technologies that are not under patents and tha=
t
are patented, and about new technologies which need to be developed. It sai=
d
it was necessary to identify and assess existing technologies to support
action on mitigation and adaptation.

Multilateral funding to disseminate existing technologies, including those
where the patents have expired, is needed. It called for the promotion of
capacity building and dissemination of know how to adapt, use and develop
technologies, experience and equipments for mitigating and adaptating to
climate change.

As regards patented technologies, Brazil proposed a public multilateral fun=
d
for purchasing licences with a view to facilitate transfer. It stressed the
need for the consideration of criteria for compulsory licensing considering
the climate change situation, bearing in mind the example set by decisions
in other relevant international fora related to intellectual property
rights, such as the Doha Declaration on the TRIPS Agreement and Public
Health.

It also called for the consideration of incentives to stimulate technology
transfer within companies, with a view to strengthening capacity in
subsidiary companies located in developing countries.

In relation to new technologies, Brazil said there was a need to foster the
establishment of national and regional technology excellence centres to
promote technology development, deployment and transfer, stimulate capacity
building, improve access to information and establish an appropriate
international cooperation environment. It suggested a venture capital fund
based on a public/private partnership for development of breakthrough
technologies in developing countries. It also stressed the need for
north-south, south-south and triangular cooperation, including joint
research and development.

Brazil concluded by proposing a coherent and comprehensive instrument for
technology development and transfer, through a Technology Protocol or other
approaches. It stressed the need for enhanced institutional support under
the UNFCCC for the identification of country/regional technology needs, and
for mechanisms (including performance indicators) to measure, report and
verify the effectiveness of technology transfer to developing countries.
There is also a need for a funding mechanism under the UNFCCC to be managed
and operated by the COP.

Ghana said that technology transfer is hindered by many barriers which
include technical, political, financial and social aspects. Among some
barriers it mentioned were inadequate technology information (including
cost, performance, suitability etc); limited capacity for operation and
maintenance; limited skills to manage and adapt the technologies; lack of a=
n
enabling environment from supply and demand sides, including the issue of
intellectual property rights; investment risks; lack of financing or access
to credit; high cost of technology and insufficient investment.

Ghana also stressed the need for an international mechanism for the
development, diffusion and transfer of technology. It called for a
multilateral technology cooperation fund to support such efforts. There is
need for an enhanced institutional arrangement that supports a technology
board (with sectoral technology panels to accredit international action on
technology development and transfer), that endorses country programmes and
monitors reporting and verification actions.

India said that realising the full potential of technology will require
mechanisms across all stages of the technology cycle which is not just a
question of transfer alone, but also of generating new technologies as well
as research, development and deployment.

In the area of new technologies, the transfer of technology and know-how
should be aided by a suitable IPR regime. For technologies owned by the
private sector in developed countries, the respective governments could
compensate the owners for their transfer and deployment in developing
countries. As for mature technologies, India called for appropriate
financing models.

On accelerating technology development, India proposed joint development
with IPR-sharing through consortia involving the private sector and
financing structures with cost-sharing. It also suggested a venture capital
fund with global sourcing of resources for early stage technology.

On accelerating transfer and diffusion, India stressed that technology
transfer arises out of a specific responsibility of parties under the
Convention without any requirement of reciprocity. It is distinct from
purely market-based transfer arrangements. Global financing arrangements
require global public procurement of IPRs and in ensuring the affordability
of the products and services.

South Africa commented that it was interesting and clear that there were
many areas of convergence in the proposals coming from the developing
countries. It said that the life of a technology had many stages of
maturity, which involved the retrofitting of old technology, the deploying
of existing climate friendly technology more widely at an affordable cost
and the incentivising of new and emerging technologies.

In the wider deployment of existing technology, issues of finance include
affordability and IPRs, it said. There should be preferential terms provide=
d
to developing countries with the LDCs obtaining the technologies for free.

Bangladesh, speaking for the LDCs, said that it was key to enable technolog=
y
needs assessments, improving access to technology information and removing
the barriers to deployment such as IPRs. It particularly stressed the need
for technologies in adaptation. In relation to the institutional support
necessary, it said that establishing a technology transfer and development
board with a clearing house was important.

Pakistan said that a key concern that has been and should be at the centre
of discussion and future actions is to make technology accessible to all
those affected and for developing countries, these technologies should be
made available to them at an affordable cost.

It said that the proposal to establish a multilateral fund has been positiv=
e
and should be considered very seriously. The most critical area is the
barriers to transfer of technology and whether the international regime,
including that relating to IPRs, poses barriers or facilitates this.

In Pakistan=B9s view, the IPR regime does both, in that it facilitates the
development of technology by providing incentive and reward to the inventor
or entrepreneur but at the same time it provides monopoly pricing power,
which acts as a barrier in its diffusion. Consequently, additional measures
are vital and necessary to remove these barriers to transfer of technology.
Pakistan proposed the following:

-- An international system or an agreement on compulsory licensing for
climate friendly technologies along the lines of what was undertaken in the
health sector;
-- Joint technological or patent pools providing and transferring
technologies to the developing countries at low cost, an idea which is bein=
g
discussed in the context of TRIPS and access to medicines;
-- Limited time for patents. There can be reduction of the period of patent=
s
on climate friendly technologies.
--The provision of incentives (tax exemption, subsidies etc) for the owners
of technology so that they can put in place a system of differential pricin=
g
(in which developing countries are charged lower prices).

The EU, speaking on effective mechanisms for scaling up development and
transfer of technology, said there is a need to define an enhanced framewor=
k
for a Copenhagen agreement. A shared vision requires the deployment of ESTs
for mitigation and adaptation at an unprecedented scale and pace, it said.

The EU added that different policy instruments are needed to stimulate
investment in different technologies. It stressed the need for an effective
enabling environment. For an enhanced framework for technology, the EU said
that there was a need to stimulate the formation and development of nationa=
l
and international innovation systems and markets and create a favourable
investment and enabling environment that engages the private sector.

This includes the need for developing countries to adopt appropriate
policies and measures for attracting domestic and international investment,
including both public and private financing. The EU said that the developed
countries should do more to support existing and new financing mechanisms,
exploring a range of technology- oriented agreements within and outside of
the UNFCCC.

In response to the various developing country proposals, the United States
said that given the magnitude of the level of resources needed, it was
important to look at the private sector=B9s contribution without the public
sector. To sweeten the deal for the private sector, said the US, the
reduction of taxes and tariffs was needed.

The US also wanted to know from India on how the terms of trade would be
established as regards the public procurement of IPRs. The US stressed that
IPR was a source of creativity and innovation. It did it not see IPRs to be
a barrier to technology transfer. Instead it saw IPRs as strengthening
access to technology.

India in response said that there was a need to have a balance between the
public and private benefit. While ensuring rewards to the innovator, the
public sector needs to take the technology on board and bring them to marke=
t
where it is not able to perform the function. India said that it was not
replacing the concept of IPRs but rather it was for the creation of an
enabling mechanism or system that compensates the innovators and brings the
technology to the market more quickly.

Canada said there was a need to reduce the barriers for the private sector
in taking risk reduction towards greenhouse gas reductions. There are
challenges in technology commercialisation and innovative policy approaches=
.
It said that weak IPR regimes would dampen innovation. Canada suggested a
roundtable in Poland (at the next meeting of the Conference of Parties) wit=
h
the private sector to address these challenges.

A =B3contact group=B2 will further discuss the technology issue, after the =
Chair
produces a paper summarising his views of the main points arising from the
roundtable.














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