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A Knowledge Paper on Sustainable Environment by:

Kartikeya Sethi Class XI-A (Sc.) Modern school Vasant Vihar New Delhi

Technology has a fundamental role in addressing the issue of climate change, which is affecting our Environment. There is an urgent need to accelerate the large scale global deployment of environmentally sound and climate friendly technologies and to minimise the time lag between their initial development and final adoption, particularly in developing countries. This will require innovation and we will need to look at new approaches to technology development.

Technology issues have always been at the forefront in the effort to mitigate and adapt to global climate change. It is widely acknowledged that capacity building and technology transfer are critical tools without which countries will not be able to respond effectively to climate change. Some even believe that we need something of a technological revolution to tackle the threat of climate change. The cost of climate change is unevenly distributed among countries and organisations, as is the capacity to respond to the effects of climate change. Where developed countries have strong database, diversified economy, integrated physical infrastructure and financial resources to advance towards tackling this challenge, developing countries suffer from lack of adequate capacity to make measures towards achieving this goal. Thus, there is urgent need for action which enables access to and transfer of related technologies, in particular to developing countries, through supportive measures that promote technology cooperation, transfer of necessary technological know-how as well as building up of economic, technical and managerial capabilities for the efficient use and further development of transferred technology. Although there are differing viewpoints on technology transfer, majority of the global community views technology transfer as long term cooperation in terms of enhanced action on reducing greenhouse gas emissions (mitigation), and increasing the capacity to meet the consequences of climate change that has already taken place and is likely to continue to take place (adaptation). Thus, when we talk about climate change related technological change, we refer to technologies which are climate friendly (mitigation) or climate responsive (adaptation).

Global Acknowledgements
Technology transfer has been at the centre of considerable attention in the efforts to tackle global climate change. Starting with the Rio Declaration and Agenda 21, 1992 to Multilateral Environment Agreements, Montreal Protocol, Convention on Biological Diversity & United Nations Framework Convention on Climate Change (UNFCCC), technology transfer finds it mention in all these important developments.

Technology development and transfer is also included in the Kyoto Protocol of the UNFCCC.

Assessing Technological Needs

Climate change mitigation and adaptation efforts require massive investment of capital as well as efforts. A report prepared for the expert group on Technology Transfer estimates that the additional financing needs for climate change mitigation technologies will span a range of USD262 670 billion per year, which is around 3-4 times greater than the current global investment levels. The task of investing in climate change related technologies and measures is even more challenging for countries like India, which need to sustain economic growth as well as protect the vulnerable sections of society and climate sensitive sectors from the projected change in climate. Thus, along with mitigation related efforts, India will also have to invest in significant adaptation measures in order to increase countries resilience. It is clear that India faces considerable challenges towards the identification and development of technologies, practices and policies, both for mitigating GHG emissions as well as for adapting to the adverse physical impacts associated with climate change due to the multiple developmental goals it is forced to pursue. In this scenario, with its limited resources, it becomes increasingly important to take well informed decisions towards allocating investments in its multiple goads. Further, by making investments, it is important that technologies selected are clearly in line with the countries developmental strategies in order to be able to achieve more than one goal with a specific action. In this respect, it is acknowledged that a Technology Needs an assessment for climate change will help the country in identifying core areas for making investments which will result in effective implementation of measures for achieving its climate change related goals. On the adaptation as well as mitigation front, a number of developed countries have already carried out their own assessment, which we can take reference from. The purpose of a Technology Needs Assessment for climate change is to identify, evaluate, and prioritise technological means for achieving sustainable development in developing countries, increasing resilience to climate change, and reducing the countrys contribution to climate change by way of GHG emissions. It can achieve a number of additional goals, namely contributing to enhanced capacity in developing countries to acquire environmentally sustainable technologies, developing important links among stakeholders in developing countries to support future investment and barrier removal, and defusing high priority technologies throughout key sectors of the national economy.

The rate of technology transfer is heavily influenced by the motivation of the participants as well as the barriers that discourage them. Overall, the decisions taken by the stakeholders are of paramount consequence to the existence and dynamics of technology transfer.

Pathways of Interaction
A number of financing instruments and pathways are currently available to support different forms of activities related to technology transfer involving both the private sector and Governments. Examples include direct purchases, Government support, licensing, franchising, foreign direct investment, sale of turn-key plants, joint ventures, sub contracting, research arrangements, exports of products and capital goods, exchange of scientific and technical personnel among others. These include both Government driven pathways which are initiated to fulfil specific policy objectives and private sector driven pathways initiated for commercial purposes. It is important to understand here that as difficult as it is to quantify technology transfer, it is an equally arduous task to measure how much climate or environment relevant technology is being transferred under each pathway. As it is, measuring technology transfer is difficult due to varied mediums through which it occurs, further complicating this situation is the lack of data collection and analysis quantifying the transfer through the different routes or pathways. It may be considered a reasonably correct to assume that there exists a direct relationship between total international financial flows of each type and technology transfer. The trends of these financial flows are thus analysed to indicate the levels and variations in technology transfer.

Official Development Assistance (ODA)

ODA is defined as those flows to countries and territories on the Development Assistance Committee (DAC). List of ODA recipients and to multilateral developments institutions which are provided by official agencies, including States and local Governments, or by their executive agencies, and each transaction of which is administered with the motion of the economic development and welfare of developing countries as its main objective and is concessional in character and conveys a grant element of at least 25% (calculated at a rate of discount of 10%). The DAC is a key forum of major bilateral donors who work together to increase the effectiveness of their common efforts to support sustainable development. ODA includes both bilateral aid and that provided by Governments indirectly through multilateral organisations primarily from members countries of the Organisation for Economic Cooperation and Development (OECD). It is the primary tool for Government supported technology transfer efforts, particularly so towards developing countries. OECD is a platform which brings together the Governments of countries committed to democracy and the market economy from around the world. OECD statics reveal that the majority of ODA from DAC donors goes towards funding of bilateral development projects, programs and technical cooperation. It can be safely assumed that a large portion of these activities comprises of an element of technology transfer, considering both hard and soft form of transfer.

Foreign Lending
Foreign loans are provided by Governments (including multilateral lending institutions) as well as private sector financial institutions to facilitate technology transfer. Multilateral Development Banks are institutions that provide financial support and professional advice for economic and social development activities in developing countries. The term Multilateral Development Banks (MDBs) typically refers to the World Bank group and four Regional Development Banks. The African Development Bank The Asian Development bank The European Bank of Reconstruction & Development The Inter-American Development Bank Group

Foreign Direct Investment (FDI)

FDI involves direct investment in physical plant and equipment in one country by business interests from a foreign country. It is a primary investment vehicle for long term, private sector technology transfer. However, as the relationship between FDI and technology transfer is complex, it is difficult to quantify how much of the FDI transactions involve transfer of climate friendly technologies, knowledge, skills and other resources that represent a stock of assets for production.

Commercial Sales
Commercial transactions are considered are major source of technology transfer for the private sector. Private sector flows off an international commercial nature result from payments for Intellectual Property Rights (IPR), related specialised services, and payments arising from strategic partnerships between unaffiliated companies. However, it is a challenging task to assemble statistics relating international trade to technology transfer due to the unavailability of data regarding projects, more so for climate friendly technology transfers.

Export Credit Agencies (ECAs)

ECAs are private or quasi-governmental institutions that act as intermediaries between national Governments and exporters to issue export financing. The financing can take the form of credits (financial support) or credit insurance and guarantees (pure cover) or both, depending on the mandate the ECA has been given by its Government.

Clean Development Mechanism (CDM)

In addition to bilateral and multilateral funds for mitigation action, the clean development mechanism (CDM) under the Kyoto Protocol is designed to help encourage private financing for mitigation action in developing countries even though it does not have an explicit mandate for technology transfer. It contributes enabling

technology transfer to developing countries by financing emission reduction projects using technologies currently not available in the developing countries.

Challenges to Technology Transfer in India

Understanding the barriers to successful and effective transfer of climate friendly and climate responsive technologies, is important in order to be able to devise and implement effective programs in a step towards removing them. Highlighted below are a few barriers which have widely been quoted to have hindered technology transfer in the Indian context. Lack of coordination between institutional setups, State and Centre as well as between Government and academia, industry and civil society is found to be a major barrier to the flow of important information between these entities. Information on effectiveness, competitiveness, performance, operation and maintenance costs, ease of operation etc. on which investors make decisions are not easy to acquire for technologies. Lack of human and institutional capacity, including the capacity to absorb new technologies is identified as one of the key barriers for developing countries in technology transfer. Intellectual Property barriers involving strict WTO and TRIPS regime, lack of capacity to pay for licensing the most efficient technologies. Risk aversion in financial institutions including multilateral development banks, prevents them from investing in new and risky technologies. Many new technologies are not currently competitive in cost terms in comparison with conventional technologies. Poor access to capital, especially for smaller firms, prevents smaller firms from participating in the technology transfer process. The fear of complicated project approval procedures sometimes discourage the investors from investing in new kind of projects.

The Way Forward

There is an urgent need to strengthen enabling environments in both developing and developed countries to support effective technology transfer. Enabling environment activities are designed to overcome barriers to broad market acceptance and use of technologies for mitigation and adaptation that relate to policy, human and institutional capacity, information, infrastructure and land use, and trade and intellectual property. Strengthen enabling environments and capacity building can be achieved through the following five strategies. a) b) c) d) e) Policies, regulations, standards and procurement programs; Capacity-building and work force training; Assessment, information and education; Intellectual property good practices and information; Sustainable community and infrastructure planning

This includes the numerous programs implemented through bilateral aid agencies, multilateral developmental banks, United Nations agencies, the GEF and the climate technology initiative, which assist countries in strengthening enabling environments and facilitate investment in technologies for mitigation and adaptation in developing countries. The development and deployment of flow carbon technologies in India also depends upon effective mechanisms that build innovation capacities. Innovation and technology development are the result of intricate developments among participants in the system, which includes enterprises, universities and Government research institutes. The flows of technology and information among these stakeholders are key elements for enhancement of innovative process of a country. Thus, the innovative performance of a country depends to a large extend on how these participants relate to each other as elements of a collective system of knowledge creation. ******