Emerging Economies, R&D

To whom do we need to transfer climate technologies? Part 1 cont’d – Emerging economies as R&D and production centres – China and India

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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To whom do we need to transfer climate technologies? Part 1 – Emerging economies as R&D and production centres – China and India

One of the major issues that is key to thinking about IP, technology and climate change is that there is a geographic structure to the technology need. The majority of developing countries are where the need for existing technologies for energy access and thus low emissions technologies is most evident, and in terms of adaptation where the most severe impacts of technology are held. This means that the flows and access to technology reflects the broader imbalance of technology access in the development framework. However, the emerging economies, especially India and China have an important and special role to play in the generation and dissemination of climate technologies.

The past two decades have seen increasing growth in the role that middle income countries, especially upper middle income countries such as Brazil, India, and China play in international technology flows. Data from 2001 shows that upper middle income countries presented the highest growth arena for high technology exports from the OECD.

Emerging economies are increasingly major players in renewable energy technology investments with Brazil, India and China comprising over 90% of the 72 billion invested in developing countries (just a shade more than that invested in the OECD. See UNEP, Towards a Green Economy: Pathways to Sustainable Development and Poverty Eradication, 2011).

The picture of the role of the emerging economies in the new climate technology structure is fundamental to assessing how intellectual property may be a barrier to technology transfer.  If these countries are to engage in large scale replication and distribution of the relevant technologies to other developing countries, then we have to be concerned about anything that places a restriction on their ability to:

  • Function as research and development and production centers for climate technologies
  • Function as export and distribution centers for climate technologies

In the next couple of posts I look at the role of China and India as research and development centers

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Thoughts on GCPC 2015 – Club Goods and Technology Transfer

The UNFCCC has one of the most effective mechanisms for assessing and integrating academic research into its processes – the International Panel on Climate Change (IPCC).  The controversy over the existence, scale and impact of the climate problem meant that an ostensibly non-partisan, non-political mechanism was needed to assess the best available data and research.  The IPCC presents an unprecedented consensus about what counts as appropriate and useful scientific research that should be fed into the policy process and what should stand outside it.  To a significant extent, it is this filtering process that has generally kept the crazies and the methodologically unsound out of the UNFCCC negotiating process.

The IPCC however, has a problem. In its 5 year cycle of assessments it does not really allow for dynamic consideration of new research, especially research aimed at assessing the effectiveness of policies implemented by, through, and in service of the existing UNFCCC agreements and institutions.  The IPCC is not in a position to, nor does it have a mandate to, assess the research on the extent to which the UNFCCC agreements and institutions are meeting their stated goals of mitigation, adaptation, technology transfer and financial support. The prime example of this is the concern about the design of a new market mechanism given the issues raised about how effective the Clean Development Mechanism (CDM) has been.  Some of these concerns have been driven by academic research but most of it has been by countries raising problems at a political level and by the mechanisms within the UNFCCC itself such as the Subsidiary Body on implementation (SBI) and the Subsidiary Body on Scientific and Technical Advice (SBSTA).  Neither of those last two bodies have ever lived up to the hope that they would be pathways for research to be integrated into UNFCCC negotiations and implementation processes. The members of the SBI and SBSTA have largely remained political actors and what few products that they have published have been methodologically weak, limited in scope and overly reliant on work by the secretariat and consultants. This fundamental weakness is combined with a failure to focus on academic research generated and distributed by researchers in developing countries where implementation of the UNFCCC goals is taking place. There is a serious problem of how to ensure that the right, relevant research feeds into the UNFCCC processes and institutions and is reflected in the negotiating outcomes.  Given the weakness of the formal mechanisms, what remains are those such as side-events, contributions and statements from the Research NGOs group (RINGOs) and the participation of policymakers themselves in academic conferences.  Given that most academic conferences can be mind-numbing exercises in niche-building which is rarely policy-relevant. I was really excited to attend and rapporteur at the Global Climate Policy Conference 2015 (GCPC2015), held in Delhi 30 April – May 1.  If you want to read the presentations see here (http://climatestrategies.org/call-for-abstracts-global-climate-policy-conference-2015/) and to see the framework project in which the conference took place, led by Climate Strategies and the Stanley Foundation, see (http://climatestrategies.org/projects/global-research-policy-interface-climate-2015-strengthening-the-research-policy-interface-in-the-international-climate-negotiations/)

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