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Sino-US-EU panel outlines need for global framework to spur technology transfer

Date
14 December 2009
Sino-US-EU panel outlines need for global framework to spur technology transfer

As UNFCCC negotiators huddle this week in Copenhagen to hammer out a climate change agreement, a panel of distinguished experts from countries representing the world's largest developers of clean technologies - China, the US and Europe - agreed a global framework was urgent to speed up transfer of these technologies.

"Technology transfer is not the stumbling block people thought it would be, for companies or for the negotiations here in Copenhagen," said Changhua Wu, Greater China Director of The Climate Group.  "Major companies are already developing technology and creating jobs in many fast-developing countries. The issue is now a much broader one for least-developed countries, that lack capacity, regulations, financing and infrastructure to adopt technology."

"The certainty of a global policy is crucial from the company perspective, especially for companies to invest in research and development to bring   (new) technologies to market," said  panelist Junliang Han, President of Chinese wind turbine manufacturer Sinovel.

Even though numerous challenges stand in the way of transferring clean technologies, several companies cited their mutually beneficial experiences working with local partners in transferring technology to China.

Steve Fludder, Vice President of GE Ecomagination described GE's range of agreements within the country, including one struck in 2003 to bring the most advanced combined-cycle gas technology, which helped more than 50 suppliers in developing skills to produce major components.

"We've had very successful experience in transferring very sophisticated technology to China in the last five-six years," Fludder said. He added that the company wasn't worried about loss of IP rights.

"Confidence in IP starts with us: our company invests billions in advancing the state of our technology so that next year well have something better than this year. It starts with a mindset of innovation."

A couple of months ago, GE entered into a joint venture with China's Shenhua Group, to pool the two companies best advanced coal gasification technology developments.

Explicit national policies were also cited by several panelists as another important pillar that must be in place for technology transfer.  For example, China's renewable energy law, adopted in 2006, has led to a 100% annual growth in wind, solar and biomass, Han said.

Global, freely-operating markets were also mentioned as being absolutely essential to deploy these technologies. "Competition drives quality, drives down price, and brings innovation forward," said Peter Brun, Senior Vice President of Vestas Wind Systems, which is active in 65 countries.

However, panelists also said there were certain instances where the market would not be sufficient to bridge the gap especially where massive investments in clean technologies, which represent a public good, exceed the capacity of individual companies to invest.

The most recent example of this, Fludder said, is initial joint US and Chinese governments projects on clean coal technologies, which typically cost billions in investment for one demonstration plant,  beyond the capacity of one private company to build.

At the same time, when referring to technology transfer within the UNFCCC context, the term has come to mean different things at different times, especially when dealing with the most difficult challenge of all: transferring technology to the poorest countries.  Less developed countries need more assistance to apply new technologies, Han also said.

Transferring technology to the very poor needs completely different mechanisms. They need help with investments in infrastructure, said Steen Riisgaard, President and CEO of Novozymes, the worlds largest provider of enzymes to produce biofuels.

Lin Jian, General Manger of Shanghai Environment and Energy Exchange, said he sees a solution for LDCs through developing a platform to match up technology owners and demanders, that brings together government with non-profit funds and other financial support. "You have to create new, effective ways to help fund and get the technology and financial support," he said.

Speaking to us outside the event about what China needs to propel its low carbon policies forward, Professor Zhou Dadi, emeritus Director General of China's National Development Reform Commission, said: "We need more technology innovation, especially on energy consumption. We also need a better model of industrialization for a high level of living standard with low carbon emissions. As quickly as possible."

Nonetheless, several challenges remain to accelerate diffusion of technology, requiring a continued and robust debate: the high cost of technology transfer, the difficulty in getting developed countries to adopt technology standards from China, and the need to create new mechanisms under the UNFCCC.

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