Enabling environments or enabling discord: intellectual property rights, public-private partnerships, and the quest for green technology transfer.

Author:Smith, Van

TABLE OF CONTENTS INTRODUCTION I. BACKGROUND: THE CLIMATE CHANGE PROBLEM AND TECHNOLOGY TRANSFER A. The UNFCCC Institutional Framework on Technology Transfer B. Challenges Unique to the Climate Change Technology Transfer Problem II. APPROACHES TO ENABLING TECHNOLOGY TRANSFER A. The TRIPS Approach: Tailoring Intellectual Property Rights for ESTs 1. TRIPS, Technology Transfer, and TRIPS Flexibilities 2. Beyond TRIPS Flexibilities: IPR Approaches to Enabling EST Transfer 3. The Doha Declaration on Public Health Experience B. The Public-Private Approach: Forcing Action 1. The Venture Capital Model 2. The Joint-Research Model: Universities and Government Labs III. IN SUPPORT OF PUBLIC-PRIVATE PARTNERSHIPS A. Advantage #1--PPPs Are Fast-Acting and Feasible B. Advantage #2--PPPs Are More Effective C. Advantage #3 Encouraging Multilateral Climate Change Negotiations CONCLUSION INTRODUCTION

As climate change negotiations under the United Nations Framework Convention on Climate Change ("UNFCCC") (1) grind on in search of an international consensus on strategies for combating global climate change, technology transfer (2) of environmentally sound technologies ("ESTs") (3) will play an important role in any lasting solution. The current need for ESTs in developing countries is striking. Emissions are growing rapidly in developing countries, most notably in China and India, but the majority of ESTs, and the resources dedicated to their development, remain in the developed world. (4) Yet, despite a broad consensus regarding the need for technology transfer, transfer rates are currently insufficient.

The UNFCCC Expert Group on Technology Transfer ("EGTT") has been charged with identifying and analyzing government actions that may facilitate "enabling environments" that foster technology transfer. One policy approach that has engendered great debate among commentators involves weakening intellectual property rights ("IPR") protections for ESTs in countries in need of such technologies. (5) Such proposals are controversial because of their impact on multinational commerce and because they implicate the World Trade Organization ("WTO") Agreement on Trade Related Aspects of Intellectual Property Rights ("TRIPS"). (6) TRIPS establishes minimum levels of IPR protections that WTO members must provide, but allows for "flexibilities"--measures designed to ensure that TRIPS does not unduly inhibit developing countries and least-developed countries from pursuing certain imperative public policy goals, prominently including effective response to public health emergencies. (7) IPR modification approaches to technology transfer seek to exploit or expand this "flexibilities" exception to general TRIPS standards.

Another approach utilizes government engagement of the private sector to stimulate development and deployment of ESTs. As with the IPR modification approach, some argue that government promotion of ESTs positively affects private sector innovation and others believe the contrary. (8) Public-private partnerships ("PPPs") seek to avoid the weaknesses, and exploit the strengths, of both government and private sector technology transfer mechanisms. They use public resources to prevent failures in the private markets for research, development, and deployment of technology, and private sector incentives to promote efficiency and innovation.

Given the low prospects for a multilateral climate change agreement in the near future, I argue that policymakers should deemphasize proposals to achieve technology transfer through IPR modification and instead focus their efforts on government engagement of the private sector via PPPs. I begin by giving an overview of technology transfer and the distinct approaches that IPR modification and PPPs take to encouraging technology transfer. I then argue in favor of PPPs rather than IPR modification on the basis of the following considerations. First, PPPs are faster-acting. Second, PPPs more robustly address the many market barriers to technology transfer. Third, an ambitious PPP strategy is more complementary than IPR modification to multilateral climate negotiations aimed at a comprehensive global climate regime. I conclude by commenting on the advantages of PPPs in light of popular sentiment favoring concerted climate change action in the short term.


    As the recent Copenhagen Accord demonstrates, the international community is now fully engaged in seeking a multilateral solution to the global climate change problem. (9) The Accord was signed by nearly all of the world's major greenhouse gas CGHG") emitters, representing over 85% of global emissions and including the United States and China, which together represent more than 40% of global GHG emissions. (10) Furthermore, the Accord has generated concrete public commitments to reduce GHG emissions on the part of both developed and developing countries. (11) Thus, the Copenhagen Accord presents an outward sign that the international community is becoming ready to engage on climate change in a unified manner.

    The task presented to the negotiating parties is monumental, however, and growing more difficult. Global leadership remains divided over mitigation approaches, wary of risks to national sovereignty and industrial competitiveness, and uncertain about the relative burdens that should be shouldered by developed and developing countries. Meanwhile, the action required to "prevent dangerous anthropogenic interference with the climate system," as originally set out in the UNFCCC and reaffirmed in the Copenhagen Accord, grows steadily greater. (12) The Intergovernmental Panel on Climate Change ("IPCC") has recommended, and the Copenhagen Accord adopted, a target of "hold[ing] the increase in global temperature below 2 degrees Celsius," but the longer inaction persists, the more difficult reaching such a target becomes. 13 If the Copenhagen Accord is a sign that all necessary parties are now at the table and negotiating in good faith towards a common goal, very little time remains to craft a solution, and a great divide remains to be bridged. Given these challenging constraints, all available policy tools should be utilized to ensure that solutions are as effective as possible while remaining feasible.

    Prominent among efficiency mechanisms for reducing GHG emissions is the wide distribution and deployment of environmentally sound technologies ("ESTs"). By achieving the transfer of ESTs to large groups of people and countries, opportunities for, and the burdens of, GHG reductions can be shared broadly. By allowing for more reductions in more locations, global GHG reduction can be achieved in the most cost-effective manner possible. This point is highlighted by noting that, despite the enormity of the task of confronting climate change, the technology necessary to solve the problem is already largely extant and merely needs to be deployed ubiquitously. (14)

    Technology transfer "is fundamentally a matter of the flow of human knowledge from one human being to another." (15) An early definition of technology transfer emphasized hard knowledge, calling it "the transfer of systematic knowledge for the manufacture of a product, for the application of a process, or for the rendering of a service." (16) However, technology transfer also includes the movement of "soft" knowledge that permits hard knowledge to be effectively utilized. (17) Agenda 21, a 1992 United Nations action plan focusing on sustainable development and human impacts on the environment, provides a broader conception that recognizes this: "technologies are not just individual technologies, but total systems which include know-how, procedures, goods and services, and equipment as well as organizational and managerial procedures.... [W]hen discussing transfer of technologies, the human resource development and local capacity-building aspects of technology choices ... should also be addressed." (18) The IPCC provides a useful working definition of technology transfer: "a broad set of processes covering the flows of know-how, experience and equipment for mitigating and adapting to climate change amongst different stakeholders such as governments, private sector entities, financial institutions, NGOs and research/education institutions." (19)

    Broadly construed, technology transfer can take many conceptual forms, including transfer:

    * through non-profit and governmental entities, e.g., the installation of windmills by a Norwegian nonprofit to sites in Russia and Brazil, and the training of local personnel to maintain them. (20) Another example involves a project funded by the Global Environment Facility to bolster producers' capacities to manufacture and sell efficient products in developing countries by deploying energy efficient lightbulbs, appliances, motors, boilers, and building designs; (21)

    * within a multinational firm, e.g., the decision of General Motors, an American manufacturer, to build cars in China for the Chinese market through subsidiaries and joint ventures; (22) or a project by an American company to grow a salt-resistant, carbon-sequestering, biomass-producing plant in the Mexican desert by utilizing a Mexican subsidiary; (23)

    * from firm to firm, e.g., when a pharmaceutical company licenses exclusive production rights for a drug to another firm, thereby helping the licensee build relevant manufacturing expertise; (24) or

    * from a noncommercial research setting to a commercial setting, e.g., the commercial licensing of a portable fuel cell developed at Lawrence Livermore National Laboratory to an American company. (25) Another example is the China-UK Near Zero Emissions Coal Initiative, a consortium of private companies and government, academic, and nonprofit researchers from both China and the United Kingdom that focuses on demonstrating commercial-scale carbon capture and sequestration technology. (26)


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