15 April 1998
ENGLISH ONLY
UNITED NATIONS FRAMEWORK CONVENTION ON CLIMATE CHANGE
SUBSIDIARY BODY FOR SCIENTIFIC AND TECHNOLOGICAL ADVICE
Eighth session
Bonn, 2-12 June 1998
Item 4 (a) of the provisional agenda
1. At its seventh session, the Subsidiary Body for Scientific and Technological Advice
(SBSTA) took note of the document prepared by the secretariat on
activities of Parties included in Annex II related to the transfer of
technology (FCCC/SBSTA/1997/13), which was based on second national
communications.
2. The SBSTA took note of the need for better information with respect to finance and
transfer of technology and agreed to consider at its ninth session what, if any, additions and/or amendments to the revised guidelines for the preparation of national communications by Annex II Parties would be required. It invited Parties to submit views to the secretariat by
15 March 1998 on reporting of information related to financing and
transferring technology and it requested the secretariat to compile
them for consideration at its eighth session.
3. The secretariat has received four such submissions.(1) In accordance with the
procedures for miscellaneous documents, these submissions are
attached and reproduced in the language in which they were received
and without formal editing.
FCCC/SBSTA/1998/MISC.3
GE.98-
Paper No. Page
1. Republic of Lebanon 3
(Submission received 19 March 1998)
FOLLOW-UP TO COP 3 AND INPUTS FROM PARTIES
TO THE SESSIONS OF THE SUBSIDIARY
BODIES
2. South Africa 4
(Submission received 19 March 1998)
SOUTH AFRICAN SUBMISSION ON TECHNOLOGY TRANSFER
AND ITS ROLE IN OPTIMISING DEVELOPMENT WHILST
CONTRIBUTING TO ACHIEVING THE OBJECTIVES OF THE
UNFCCC
3. Switzerland 12
(Submission received 6 April 1998)
REPORTING INFORMATION ON FINANCE AND TRANSFER
OF TECHNOLOGY
4. United Kingdom of Great Britain and Northern Ireland 14
(on behalf of the European Community and its member States)
(Submission received 17 March 1998)
TECHNOLOGY TRANFER: REPORTING BY ANNEX II
PARTIES: EU VIEWS
While for the views on reporting information on finance and transfer of technology contained in document FCCC/SBSTA/1997/13 (Activities of Parties included in Annex II related to Transfer of Technology), Lebanon being a Party not included in Annex I, the Development, Finance, and Transfer of Environmentally Sound Technology are of high interest to us since it will help in curbing the GHG emissions and mainly help in the implementation of cost effective options that will have a positive impact on the national economy.
Therefore we do recommend that Annex II parties, mainly all developed countries should provide in their national communications a more detailed and comprehensive overview of how Transfer of Hard and Soft Technologies to developing countries will take place.
We do think that this Compilation of information contained in document (FCCC/SBSTA/1997/13) regarding transfer of technology is incomplete mainly in providing clear steps of how transfer of technology will occur.
Please note, that a country like Lebanon will need full funding on
adoption of environmentally sound technology. Therefore, we would
appreciate your emphasis regarding the financial contribution of
developed countries, related to this matter as stated in Articles 4.3
and 4.5 of the convention.
SOUTH AFRICAN SUBMISSION ON TECHNOLOGY TRANSFER AND ITS
ROLE IN OPTIMISING DEVELOPMENT WHILST CONTRIBUTING TO ACHIEVING THE
OBJECTIVES OF THE UNITED NATION FRAMEWORK CONVENTION ON CLIMATE
CHANGE
1.1 BACKGROUND
The United Nations Framework Convention on Climate Change (UNFCCC)
calls for parties to "Promote and co-operate in the development,
application and diffusion, including transfer of technologies,
practices and processes that control, reduce or prevent anthropogenic
emissions of greenhouse gases" (UNFCCC Art 4(1)c).
The role that technology transfer could play in achieving the
objectives of the UNFCCC is apparent from the following
figures:
FIGURE A FIGURE B
The scenario illustrated in Figure B is only feasible with substantial, well engineered technology transfer coupled with financial and technical assistance flowing from the developed nations to the developing nations. This would ensure that ideally optimal use is made of energy and technology to ensure global emission reductions are maximised and increases are optimised. This is considered to be an ideal scenario. In the light of current difficulties in getting technology transfer to work effectively a more likely scenario is presented in Figure A.
In terms of this scenario, it is considered likely that developing
nation's emissions will increase substantially before they decrease
gradually, as technology utilisation is optimised due to economic
development. This essentially duplicates historical excesses in
developed nations. In this scenario this reduction is likely to be
driven by evolutionary technological advances, efficiency
improvements and economic factors. The challenge for parties to the
UNFCCC is for technology to be optimally transferred and assimilated
to avoid this evolutionary scenario and move towards revolutionary
technological development in developing countries with an ultimate
move towards environmental sustainability
The above has resulted in technology transfer being a component of
the political negotiations surrounding the UNFCCC. The positions
adopted to date are in essence the developing nations requesting
access to the latest environmentally friendly technologies whilst the
developed nations assert that these technologies are in the hands of
the private sector and as such are beyond their control. Proposals
for case studies, technology transfer panels and pilot projects have
been largely ineffectual in getting technologies applied. The latest
calls for technological information centres are likely to be
similarly unsuccessful. The frustration surrounding technology
transfer is considered to be due to the fact that a holistic approach
is not being taken towards this issue. To define technology as
hardware or information is highly unlikely to result in the
sustainable assimilation of such technology.
The UNFCCC technology transfer roundtable wishes to identify:
The role of corporations and government in "[making] a big jump in the transfer of environmentally sound technologies to developing countries".
Barriers and opportunities relating to the transfer of
technology.
It is however, considered appropriate that an understanding of the
critical success factors for, and issues to be considered in,
technology transfer be developed before the above objectives may be
met.
1.2 THE COMPLEXITIES OF TECHNOLOGY TRANSFER
Technology transfer is a major component of business life, ranging from fast food franchises to massive infrastructural projects and as such should be readily achieved. This is indeed the case where the technology being assimilated is required for business purposes and mechanisms are in place to sustain it. This is often not the case where an artificial need is created and a short term hardware or information approach is adopted. Key elements for successful technology transfer are:
Needs Driven
The technology must be a means to an end - not an end in itself.
In this regard technologies identified, under the UNFCCC, for
transfer must facilitate the achievement of national goals and not
merely be transferred because "donors" are looking for a
market.
Adaptation
Technologies are not universally applicable, as such unique local
characteristics need to be identified and the technology adapted to
suit such characteristics. Adaptation is often required to address
issues related to local climate, fuel sources, raw materials,
security, skills profiles, cultures, etc.
Life Cycle Management
Technology transfer needs to apply throughout the life cycle of a technology. It is therefore clearly a long-term process. Inherent in the life cycle management of a technology are considerations relating to:
Skills required to sustain the technology from design though construction, commissioning, operating and maintaining, life extension and upgrading to final decommissioning and rehabilitation.
Infrastructure required to support the technology - including electronics, power, transport, raw materials, spare parts, intellectual infrastructure, etc.
Timing of uptake and phase out of the technology in such a way as to optimise benefits - economic, social and environmental.
Development of a local technology base via feasibility studies, design, pilot plants, etc.
Support Infrastructure
A support infrastructure which includes skills, after
sales-service, institutional support, physical infrastructure and
financing, needs to be in place or established.
Ownership
Clear ownership of a technology by an individual or a sector is
required to ensure its focused application.
Appropriate
The technology selected to meet a need must be appropriate to that
need. This does not imply high tech or low tech, merely using the
right technology to achieve the right objective. For example trying
to force an environmentally friendly technology into an inappropriate
application will inevitably result in failure and wasted
resources.
Alignment with the Skills Base
A nation's skills base must be able to support and sustain its
technological base. The introduction of technologies which require
the development of parallel skills streams in nations where skills
are already scarce, is a recipe for disaster. It is far preferable to
select technologies which can use the current skills base as a
launching point.
Full Cost Accounting
The full life cycle costs of a technology need to be assessed.
These should include costs for capacity building, infrastructures,
stranded assets, etc.
It is clear from the above that technology transfer is not a
simple matter and that a great deal of long term commitment is
required of both owner and receiver for it to be fully effective.
There are also numerous barriers to technology transfer in many
developing nations.
1.3 BARRIERS TO TECHNOLOGY TRANSFER
Barriers to the uptake of technology transfer are numerous and are often specific to individual nations. Generic barriers do however exist especially when it comes to technologies to combat and adapt to climate change. These include areas such as:
Limited local skills to adapt to new technologies
Limited support infrastructures to cater for new technologies
Availability of resources, e.g. primary energy sources
Lack of mechanisms for preferential pricing of new and appropriate technologies coupled with perceptions of unreliability and high operating costs for new technologies
Low foreign investment rates coupled with reduced levels of ODA and other support
Need to assess performance in a local environment
Private sector ownership and participation
The slow rate of economic development in developing nations compromising the availability of funds with which to purchase technology
Excess capacity in some economies for example in the industrial sector
Age of the capital base - young assets still need to be fully depreciated before new ones can be built to avoid problems with "stranded assets"
National security concerns
Competition from other current technologies
"Locking into" a particular country's technology
Non-sustainability due to lack of after-sales-service
"Culture Transfer" is often a component of technology transfer and as such the technology is often resisted.
Lack of public awareness and appreciation of climate change and environmental matters in general
In light of this long list it is not surprising that technology
transfer under the UNFCCC experiences difficulties!
1.4 SOUTH AFRICAN INITIATIVES IN TECHNOLOGY TRANSFER
2..1..
2..2.. The apartheid legacy left South Africa impoverished in many areas. In spite of a well-developed technological infrastructure, the isolationist policies of the previous regime resulted in a lack of strategic foresight in matters technological. In the New South Africa a long-term approach is being adopted to ensure the social, economic and environmental sustainability of science, engineering and technological capacity. Some of the initiatives currently in hand are as follows:
A Science and Technology Foresight exercise has identified Environmental Management as a key technological sector for the competitive positioning of South Africa internationally. This exercise will identify technologies that South Africa has developed and which could be marketed to further the cause of global sustainability.
A Trade and Industry cluster study is identifying environmental areas of technological congruency, which also support the competitive position of South Africa.
The establishment of a clean technology centre is being considered to undertake technological and socio-economic Research, Development and Demonstration projects to facilitate the assimilation of environmentally beneficial technologies into the economic mainstream of society.
The development of an outcomes based education curriculum at primary and secondary school levels which includes both technology as well as environmental sustainability as key subjects.
NGO and industrial initiatives to facilitate the development and assimilation of environmentally sustainable technologies, capacity and infrastructure. These technologies vary from renewable energy sources for rural electrification to low water utilisation and novel clean coal technologies.
A programme to assess and develop indigenous technologies in the
pursuit of sustainability via the use of traditional technologies and
practices which may challenge the paradigms of current technological
practice. This is a useful contribution to overall African activities
to develop endogenous capacity and the application of appropriate
technologies.
Clearly the above is a significant strategy to ensure the
development, transfer, adaptation and application of technology to
ensure long term environmental sustainability. At the same time it
should be stressed that major effort is required to ensure that this
plan becomes reality. Whilst the focus of this programme is a
domestic and regional one, the realisation of a global contribution
from this ambitious programme is dependent on the support of both
international partners as well as funding and financing mechanisms
which result in a win-win solution to global environmental issues. In
this regard a contribution towards the UNFCCC technology transfer
debate is submitted below.
1.5 TECHNOLOGY TRANSFER INFORMATION STRATEGY UNDER THE
UNFCCC
If technology transfer is to play a role in meeting the objectives of the UNFCCC, then it is clear that major effort needs to go into its planning, implementation, financing and monitoring. In this context a potentially sustainable strategy which could apply is detailed below:
1.5.1 Generic Identification of Technologies
A process should be established, on a sector basis, to identify core technologies that have the potential to contribute to achieving the objectives of the UNFCCC. This should include (in order of priority) technologies for:
Vulnerability assessment
Adaptation
Monitoring, evaluation and modeling
Mitigation
This assessment should identify all relevant technologies, along
with a quantification of their impacts, costs, ownership and
intellectual property issues.
1.5.2 Nation Specific Technology Matching
Based upon the country studies currently under way in most
developing nations, it will be possible to identify the gaps between
their current technology base and the technologies required for
optimal performance in terms of vulnerability assessment, adaptation
and mitigation of GHG emissions.
A list of technologies which will enable that nation to anticipate and adapt to impacts, whilst optimally developing, will therefore be compiled. Generic technologies need to be established. In this regard a process should be established, on a sector basis, to identify core technologies that have the potential to contribute to achieving the objectives of the UNFCCC. This should include (in order of priority) technologies for:
Vulnerability assessment
Adaptation
Monitoring, evaluation and modeling
Mitigation
This assessment should identify core technologies, along with a quantification of their impacts, costs, ownership and intellectual property issues. The process to use here could be for the Secretariat to invite business to submit technologies for consideration and then, via the proposed specialist task teams, assess these technologies under some efficacy criteria (essentially develop a "climate friendly" mark). It should be stressed here that technologies assessed would include those in developing nations.
2..1..
1.5.3 Test Against National Priorities and Prioritise
The desirability of assimilating the technologies identified needs to be established by testing against national priorities. This will enable those technologies which will deliver the biggest "bang for the buck" to be identified (both in terms of national priorities and UNFCCC objectives). The technologies identified should then be prioritised in order of need, efficacy and full cost.
Develop a Technology Transfer, Adaptation, Application and
Assimilation Strategy
A technology transfer, adaptation, application, assimilation, monitoring and evaluation strategy needs to be defined. In particular country specific strategies for the transfer of the highest priority technologies should be developed primarily by the national governments facilitating actions on the part of the private sector. Funding for the development of these strategies should be sourced from the GEF and technical expertise should be made available should it be required. This expertise must be drawn from developing nations to ensure relevancy of the strategies developed. These strategies should include:
Feasibility studies and pilot plants
Technology life cycle
Skills and capacity building requirements
Timeframes
Full costs for the entire lifecycle of the technology
Support infrastructure required including the human resource development
infrastructure
Financing mechanisms
Financial resources may be obtained from various sources. The most obvious, where incremental UNFCCC related costs are involved, is the GEF. Other options include:
Joint ventures
Risk capital with write off provisions if the technology fails
Cofinancing e.g. utilities, government, private sector, aid agencies, GEF etc.
Foreign investment
Venture capital
Activities Implemented Jointly and potential future Joint Implementation
Incentives to facilitate private sector uptake.
The latter is considered a particularly promising mechanism as it
can encompass the profit motive that is a particularly strong driver.
It does however not cover important technological infrastructure
issues such as education, capacity building and physical support
infrastructure. As such any incentives for the uptake of climate
friendly technologies as identified above must be made
available as a component of a partnership between the appropriate
private sectors, the governments of developing nations and the
funding mechanism under the Convention as well as any related
Protocol.
1.5.4 Allocation of Tasks
The generic identification of technologies should be undertaken by sector specific specialist task teams, (as per the current G77 proposal) consisting of experts from developing and developed nations. (Bearing in mind that technology transfer will not only be from developed nations to developing nations.)
The technology matching, national priority matching and
prioritisation (as detailed in 1.5.3 above) should be undertaken by
the National Climate Change Committees of developing nations. The GEF
should be requested to make funding available for this
activity.
This technology transfer strategy should be developed by the
receiving nation, if necessary with assistance from a specialist
technology transfer team to be established as part of the UNFCCC
secretariat or the proposed national/regional centres.
1.6 TECHNOLOGY TRANSFER OPPORTUNITIES
The following technologies could be typical examples of those which could be accredited as "climate friendly" and transferred under this process:
Renewable energy for rural electrification
Low water consumption technologies two way transfer ie from South Africa as well
Technology training systems
Sustainable agriculture
Efficient low cost housing
Efficient industrial processes
Demand side management technologies
Electricity supply side options including clean coal technologies - two way transfer i.e. from South Africa as well
Efficient mining practices two way transfer i.e. from South Africa as well
End use electrotechnologies
Information technology for knowledge capture and management
Coal gasification
Coal beneficiation including Sasol type processes two way transfer i.e. from South Africa as well
Efficient transport systems
Electric vehicles
1.7 CONCLUDING REMARKS
Technology transfer is not a simple issue, especially if it is
being used to achieve specific objectives not necessarily related to
normal good business practice. In such cases is needs a bit of help -
hence the methodology proposed above. It should however be noted that
the most powerful tool to drive technology transfer is economic
development. Sustained economic development in developing nations
would go a long way to assimilating the latest, most cost effective
and environmentally friendly technologies throughout the
world.
REPORTING INFORMATION ON FINANCE AND TRANSFER OF
TECHNOLOGY
In response to the invitation to Parties at the seventh session of the Subsidiary Body for
Scientific and Technological Advice to express their views on reporting information on
finance and transfer of technology, Switzerland submits the
following comments.
1. In the light of the experience with the first two national
communications from Annex I Parties, finance and transfer of
technology are examples on which the reporting format should be
improved. Parties should provide information on the implementation of
the Convention in a transparent and comparable way. It seems to us
that there is a need to define a framework allowing to increase
precision and simplicity in reporting, to remove ambiguities, and to
prevent vague answers to precise questions.
2. We would therefore advocate for a type of "question and answer"
framework in which unambiguous questions would induce very precise
(yes/no-type) answers. Where possible, reporting should consist of
filling in tables and/or answering very precise and specific
questions. The national communications should be part of a data base
in which standardised answers are recorded. The advantage of such a
procedure would be enhanced transparency and
comparability.
3. Specifically, for finance and technology transfer, the actual
system suffers from the broad possibilities which are let to Parties
to provide their own interpretation of the guidelines when
enumerating activities. This is a consequence of existing ambiguities
in the information requested and leads itself to ambiguities in the
information supplied. We provide here a list of suggestions and
issues to be solved:
With respect to the reporting guidelines on finance and transfer of technologies, the EU
would refer the Secretariat to the statement made by Luxembourg, on behalf of the EU and
its Member States, at the 7th session of
SBSTA.
The EU believes that any amendments to the reporting guidelines in this area should be part
of the second overall revision to the reporting guidelines. The EU would suggest that the
Secretariat to produce a more comprehensive report based on reporting in 2nd National
Communications and on 2nd In Depth Reviews and then consider how the guidelines might be
amended. One suggestion is that the reporting guidelines should ask Annex II Parties to
consider the contents of non-Annex 1 national communications in countries where they have
significant bilateral aid or commercial involvement and to produce strategies for future
involvement that takes these into account. However, it is very difficult to measure
technology transfer, as much of it takes place in the private sector, which is not tracked by
Governments; nor, by its nature, is it susceptible to ready or
robust measurement.
However, the EU believes that the comparability of Annex 2 Parties' reporting could be
improved, both within the FCCC itself and between the FCCC and other Conventions. The
EU would suggest that the OECD could take on the tasks of developing a "marker" system to
indicate the relevance of ODA projects to the objectives of the FCCC, and thus to improve
the comparability of reporting in this area.