Technology Transfer for Climate Change

To whom do we need to transfer climate technologies? Part 1 cont’d – Emerging economies as R&D and production centres – China and India
October 1, 2015, 03:00
Filed under: Emerging Economies, R&D | Tags: , , ,

Like China, India is heavily dependent on fossil fuels for electricity production, as well as heating and transport. Its fuel mix is dominated by oil and coal with significant shares from natural gas and nuclear power. India has also seen a rapid increase in its energy demand, although not on the scale or speed of China. India’s emissions need to peak by 2030, (under a 2 degree scenario), largely through rapid deployment of renewables, nuclear and biofuels. Also crucial will be deployment of best available technologies to enable greater energy use efficiency in industry. As with China, the IEA Energy technology Perspectives note that peaking in 2030 may not be achievable without widespread adoption of CCS in power generation and industry.

India has also taken advantage of opportunities to become a significant player in clean technologies. Indian companies have acquired technology through licensing, through joint ventures, as well as some direct acquisitions. Between 2005 and 2008, Indian exports of renewable technology increased 464% while imports increased by 172%.

India is also the home base of one of the most successful global wind technology manufacturers, Suzlon Energy Ltd. Lewis notes that Suzlon has focused on acquisition of technology by strategically acquiring whole companies, rather than licensing. In part this circumvents the established firms, but relies on significant in-house absorptive capacity.  Suzlon’s export oriented approach also made acquisition of advanced technology and access to markets crucial. This meant that Suzlon could not follow an imitation model, as its products would have been blocked from access to developed country markets where the technologies were protected.  Neither could it rely solely on a licensing model since the terms of licenses from any of the established firms would contain limitations such as geographic restrictions.  This also necessitated creating significant in-house R&D capacity to further develop the technology acquired from smaller second tier firms (Lewis).

India is a major hub for pharmaceutical and agrochemicals production and has in recent years begun to move from generic industries into major originator R&D.  Building on its high export performance, especially to developing countries, Indian firms have been using that capital to cooperate in R&D, acquire firms, and create joint ventures, in order to participate in the lucrative developed country markets for new chemical entities and biological medicines. This role for India as a crucial supplier of affordable medicines has been a large part of the structural debate about how TRIPS might limit access to medicines by forcing Indian firms to provide domestic protection for pharmaceuticals thus limiting their capacity to produce generics for export to meet the need for products in developing countries.

What does this imply?

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