Technology transfer to combat climate change: opportunities and obligations under trips and Kyoto.

• Author: Adam, Alexander

Cite as 9 J. HIGH TECH. L. 1 (2009)

"[T]here should not be, nor need be, any policy contradiction between upholding and safeguarding an open, non-discriminatory and equitable multilateral trading system on the one hand, and acting for the protection of the environment, and the promotion of sustainable development on the other[.]" --WTO Ministerial Decision on Trade and Environment (1)

1. Introduction

   On October 12, 2007, the Norwegian Nobel Committee awarded the Nobel Peace Prize jointly to the Intergovernmental Panel on Climate Change ("IPCC") and Albert Arnold (Al) Gore Jr. "for their efforts to build up and disseminate greater knowledge about man-made climate change, and to lay the foundations for the measures that are needed to counteract such change." (2) Although global climate change has been at the forefront of scientific, political, and legal discussion since the end of the twentieth century, 2007 marked a high-point in public attention to the issue. Unequivocally, the discussion shifted from whether global warming is occurring to what can (and should) be done now to mitigate its effects. (3)

   In a 2000 special report, the IPCC acknowledged the essential role of technological innovation and the "rapid and widespread transfer and implementation of technologies" to stabilize and reduce greenhouse gas ("GHG") concentrations in the atmosphere. (4) The report states that the implementation of mitigating measures under the United Nations Framework Convention for Climate Change ("UNFCCC") requires the provision of necessary financial resources and transfer of technology to developing nations. (5) According to the IPCC, in most cases, current technologies may be adequate to reduce GHG emissions. (6) For example, Stephen Pacala and Robert Socolow describe how to stabilize global concentration of atmospheric carbon dioxide (CO2), considered the dominant anthropogenic (7) GHG, during the next fifty years using a combination of fifteen current technologies. (8) Because of the foreseeable rapid growth in energy demands in Asia and other developing countries, some environmental experts are calling for a shift in focus. (9) Rather than concentrating on efforts to reduce GHG emissions in developed countries, the focus should be on the implementation of renewable technologies in precisely those developing nations that are undergoing rapid growth. (10) A recent decision by the UNFCCC, the Bali Action Plan, calls for enhanced action on technology transfer and development, including scaling up transfer of technology to developing countries to promote access to environmentally sound technology ("EST"). (11)

   More than seventy-five percent of the parties to the UNFCCC are also members of the World Trade Organization ("WTO"). (12) Some member countries of the UNFCCC view the current intellectual property rights framework imposed by the WTO as a barrier to transfer of ESTs to developing countries. (13) Among legal scholars, strong intellectual property rights protection and proprietary licensing have been criticized as impeding access to renewable energy technology. (14) This Note will explore the following legal issues arising from the UNFCCC mandate to transfer EST to developing countries: (1) the effect of the WTO Agreement on Trade Related Aspects of Intellectual Property Rights ("TRIPS") on the transfer of EST, and (2) whether developing countries may use TRIPS provisions to achieve transfer of EST on economically favorable terms.

2. History

   1. International Climate Change Agreements

      1. The Intergovernmental Panel on Climate Change ("IPCC")

         In 1988 the World Meteorological Organization ("WMO") and the United Nations Environment Programme ("UNEP") jointly established the IPCC to assess available information on the science, impacts, and economics of climate change and to formulate adaptation and mitigation options. (15) The IPCC has produced a series of reports and technical papers that are standard works of reference for policymakers, scientists and other experts. (16) Notably, on February 2, 2007, the IPCC released its Fourth Assessment Report, stating "with very high confidence" that "the global average net effect of human activities since 1750 has been one of warming." (17) Prepared by over 600 authors, and reviewed by representatives from 113 countries, the report is regarded as the consensus on the anthropogenic influence on climate change. (18) The report cites increased global average air and ocean temperatures, extensive melting of glaciers and snow cover, and rising global average sea level as evidence of an "unequivocal" warming of the climate system. (19) The main culprit of global warming is said to be the rise in GHG concentrations from human activity. (20)

         The IPCC also provides scientific and technical advice to the Conference of the Parties ("COP") to the UNFCCC and its subsidiary bodies. (21) The COP, at its first session in Berlin in 1995, requested that the IPCC elaborate on the terms under which transfer of environmentally sound technologies and know-how could take place. (22) Subsequently, the IPCC prepared a special report addressing technology transfer in the context of all relevant UNFCCC provisions. (23)

      2. The UNFCCC

         The UNFCCC was adopted in 1992 with the objective to stabilize GHG concentrations in the atmosphere at an environmentally safe level. (24) Member states are to promote and cooperate in the development and diffusion of technologies to reduce GHG emissions. (25) Because the member states recognized that countries differ in their capacities to achieve the goals of the convention, they established several means, including financing and technology transfer, by which countries could cooperate to meet these goals. (26) Unlike the subsequently adopted Kyoto Protocol, the convention did not set any binding GHG emission targets. (27)

      3. The Kyoto Protocol

         The Kyoto Protocol is an international law instrument setting stringent, legally binding emission reduction targets for six GHGs across a five-year commitment period. (28) Adopted in Kyoto, Japan in 1997, it was the first protocol to the UNFCCC. (29) So far, 182 member parties have ratified the Kyoto Protocol. (30) The GHGs regulated by the Kyoto Protocol include C[O.sub.2], methane (CH4), nitrous oxide ([N.sub.2]O), sulfur dioxide (SO2), sulfur hexafluoride (SF6), hydrofluorocarbons ("HFCs"), and perfluorocarbons ("PFCs"). (31) The protocol commits developed countries to specific emission reduction targets, but there is no binding obligation for developing countries to reduce emissions or cap the growth of emissions. (32) The group target for the thirty-seven industrial countries and the European Community is a reduction in emissions to an average of five percent against the 1990 level over the period 2008-2012. (33) According to the protocol, target emission reductions can be achieved through national clean energy initiatives and through market-oriented, flexible mechanisms such as emissions trading and the Clean Development Mechanism ("CDM"). (34) The UNFCCC has acknowledged that the collective emission targets for the first commitment period will not be achieved without the use of the flexible mechanisms, and that the currently projected reduction of eleven percent is contingent upon the implementation of additional planned policies and measures. (35)

      4. The Clean Development Mechanism

         As one of the flexible mechanisms of the Kyoto Protocol, the CDM allows for emission reductions in projects carried out in developing nations. (36) It is designed to stimulate sustainable development in host countries while allowing industrialized countries to meet their reduction obligations abroad in a cost-effective way. (37) Credit for emission reductions generated under a CDM project only attaches if the reduction of GHG emissions is in addition to any that would occur in the absence of the project activity. (38) Despite the strict additionality requirement and other start-up problems, the CDM has gained momentum, and there are now more than 860 registered CDM projects in forty-nine developing countries. (39)

         The incentive to invest in CDM projects is the generation of Certified Emission Reduction ("CER") units, which can be traded and provide a return on the investment. (40) The Kyoto Protocol explicitly encourages private entity participation. (41) The benefit to host countries is access to technology for clean energy and sustainable development. (42) Each CDM project first needs to gain third-party validation before registration by the CDM executive board. (43) A Project Design Document ("PDD") details all aspects of the CDM project, from the methodology to be used to the sustainability requirements, including how technology will be transferred, if any. (44) The PDD describes how the project meets the validation requirements and is made available for criticism during a thirty day public comment period. (45)

   2. International Intellectual Property Rights

      1. The TRIPS Agreement

         As part of the WTO Agreement package, TRIPS requires developing countries to enact strong intellectual property right protection in exchange for greater access to developed country markets. (46) The philosophy underpinning the TRIPS Agreement is to strike a balance between the long-term social objective of providing incentives for future invention and creation, and the short-term objective of allowing the use of existing inventions and creations. (47)

         The TRIPS Agreement champions strong minimum standards for the protection of intellectual property rights among the WTO members. (48) Member states are obligated to grant a twenty-year monopoly right to patent holders and not to afford preferential treatment to domestic inventors. (49) The following standards guarantee the protection of foreign intellectual property rights: (50) (1) National treatment--protection of non-nationals is to be no less favorable than for nationals; (51) (2) non-discrimination--patents are to be...