Strategic Drivers of International Low-Carbon Technology Transfer

Book excerpt: Transfer of low-carbon technologies (LCTs) to developing countries has been recognized as important in global efforts to limit climate change. Yet the mechanics of international technology transfer, especially around intellectual property (IP) rights, have remained a controversial issue in international negotiations. Using a new dataset on international partnerships in China and India in three key LCTs -- solar photovoltaics, electric vehicles, and coal gasification/IGCC -- and complementary expert interviews we study the dynamics of the transfer of IP and the underlying drivers that guide the development of business strategies and partnerships in the context of transitioning IP regimes in emerging markets. We find that weak IP regimes are indeed a hindrance to the diffusion of certain classes of LCTs: (i) for cutting-edge technologies, (ii) for fully-embodied (explicitly codified) technologies, and (iii) for LCTs from small firms. However, we also find that IP issues do not represent a barrier to the diffusion of the relatively mature and low to medium cost LCTs that are materially (at scale) most important for CO2 emissions reduction in the short to medium term. Competitive technology supply, shifting market dynamics, and increasingly vigorous domestic innovation (in emerging markets) coupled with mechanisms and opportunities to structure credible IP deals allow for the diffusion of key LCTs to occur within the context of existing business, political, and institutional structures.