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close this bookThe Global Greenhouse Regime. Who Pays? (UNU, 1993, 382 p.)
close this folderPart IV Conclusion
close this folder14 Constructing a global greenhouse regime
View the document(introduction...)
View the documentConditionality and additionality
View the documentTechnology transfer
View the documentMulti-pronged approach
View the documentImplementation procedures
View the documentRegional building blocks
View the documentNorth-'South' conflicts
View the documentConclusion
View the documentNotes and references

Technology transfer

There is little dispute that technology transfer from the technologically powerful to the technologically deficient countries will require major expenditure by the North. Unless this transfer is achieved, there is little chance that the South can abate to ecologically acceptable levels as defined in Chapter 5. Technology transfer refers to human- and paper-embodied knowledge (such as operating procedures and manuals), known as technique, as well as knowledge embodied in physical equipment and plant.

Although the chorus of consensus is deafening on this score, the terms of the transfer have been a major sticking point in negotiations over climate change. Issues such as intellectual property, the role of transnational corporations, and the investment climate in recipient countries have all been hotly disputed. Before treating these issues, however, this section outlines two qualifications as to the desirability of large-scale technology transfer to reduce greenhouse gas emissions.

Do nothing

Some influential environmentalists have argued that current patterns of political and economic power between and within states virtually preclude any significant progress toward greenhouse gas reductions via resource and technology transfer. Patrick McCully, for example, argues that a massive influx of new aid would exacerbate the plight of the impoverished majority rather than achieve greenhouse gas reductions. The history of aid, he contends, is one of corruption, failed projects, waste, neocolonial control, and increased debt and dependency. He expects that a climate fund, whether a new entity - as called for by China - or administered by the World Bank's Global Environment Facility - as called for by the OECD countries and so designated in the Convention as an interim measure - will behave no differently to existing aid agencies. He cites Ian Smillie of Intermediate Technology in London to the effect that energy aid in the 1970s left a legacy of 'windmills that didn't turn, solar water heaters that wouldn't heat, and biogas experiments that were full of hot air before they started.

Greenhouse gas abatement projects, in McCully's view, are just one more of a long list of development fads that employ mostly first world, hit-and-run consultants who increase the South's technological dependency on the North. Sinking billions of dollars into greenhouse aid would create a perpetual technological dependency machine.

I will not take issue here with McCully's critique of aid nor whether social relations which block technology adoption in many developing societies must be realigned before much can be achieved by way of aid-supported development. Rather, I will analyse what could happen if nothing is done, as McCully seems to suggest.

In Figure 14.1, I show two IPCC emission curves, and the permitted (postreduction) emission trajectories developed from the efficiency scenario for the world and the South (see Chapter 5) The South's projected emissions would exceed the IPCC case E global permitted total in about 2100 (at 1.6 gigatonnes of carbon) if the status quo in 2030 is simply extrapolated. It already exceeds the global permitted emissions in IPCC case F (at 1.9 gigatonnes of carbon).

Left to itself, therefore, the South eventually exceeds the global permitted total that is defined in relation to putative acceptable rates of ecological damage associated with climate change induced by emission of greenhouse gases (see Chapter 5). In short, the rest of the world can't afford to leave the South to its own devices. 'Do nothing' is not a viable option, however great the obstacles to change in the South or in North-South relations.

Do more but differently

Martin Bell of the Science Policy Research Unit at Sussex University has levelled a more penetrating criticism against the notion of massive technology transfer to reduce greenhouse gases in the South. He notes that energy efficiency (and related carbon abatement) is obtained from pervasive, non-energy-saving technical change throughout an economy. 'lt is therefore impossible,' he avers, 'to identify any distinct category of "CO2 emission reducing technology" which might be the focus for new initiatives concerned with international technology transfer.'


Figure 14.1 Projected South emissions vs IPCC and study world totals

Obviously a technology transfer fund could focus on major 'energy saving' technologies, but that approach neglects many technologies and techniques with as much or more carbon-abatement potential. That is, the transfer of 'greenhouse' technologies is not likely to be blocked only by political and economic barriers. Transferring 'greenhouse' technology alone would achieve far less abatement than is desirable and achievable on economic and ecological grounds.

Bell argues that a more broad-ranging approach is needed that accounts for a whole spectrum of technology used by developing countries. Transfer should encompass not merely know-how (the construction and operation of transferred plant and equipment) and know-why (the research, development, design, demonstration and deployment of technology). It should also include the techniques of incremental learning involved in fine-tuning existing plant and equipment, and in managing the organizational changes that foster such learning. The very notion of technology transfer therefore needs to be recast and the content of the phrase expanded and deepened.

This emphasis on the organizational aspects of technology transfer places the onus for realizing the potential benefits primarily on the recipient countries. Nit Chantramonklasri, for example, found that Thai firms differed greatly in their internal technological capabilities, and that technologically innovative firms were both market competitive and more energy efficient.

The incremental learning and managerial capabilities that occur after technology transfer are as or more important to increasing organizational capability than transferral of skills during a discrete project. This on-going learning process, however, requires managerial effort and allocation of scarce skilled staff and time. As Sanjaya Lall states, every new application of a given technology requires adaptive engineering work. In contexts where policies motivate such organizational learning, Bell argues that donors should fund transnational corporations to transfer to developing countries the managerial and engineering techniques required to learn incrementally and continuously. The resultant human assets are expensive, invisible, mobile, enduring, scarce and therefore extremely valuable in most developing countries.

Organizational innovation, however, also requires a favourable macroeconomic structure. Thus, Frances Stewart argues that there is nothing inevitable about the undesirable dependency fostered by current modes of technology transfer. On the contrary - faulty macroeconomic policies and resultant malign decision-making incentives that face organizations in many developing countries explain the South's inability to become technologically self-reliant rather than the problems associated with transfer per se. Pervasive factors that are determined at a macroeconomic level often thwart micro-level technological changes. Such obstacles include distorted energy prices; regulated fuel supplies; capital scarcities; uncompetitive markets; government procurement policies; stagnant scientific and technological infrastructure; protectionism; low investment in education; and lack of information programmes to overcome market failures.

These considerations imply that transferring only the latest energy efficiency technologies in core energy transformation systems used in industry or the energy sector will result in much less abatement than is possible. It is also pointless to transfer state-of-the-art plant if it is operated as poorly as are many productive enterprises in the developing world. Rather, human and organizational resources must be developed first to improve capacity factors and product quality of existing plant in all sectors of the economy. These same human capabilities can ensure that transferred technology is adapted to operate at high efficiency rather than reverting to past practices. Importantly, much of the technology for controlling greenhouse gas emissions is already in the public domain and often already accessible to developing countries. Investing in human resources that enhance technological and managerial capacity is particularly attractive because the required training is often relatively cheap, entails little or no capital expenditure, and often yields economic and resource-saving benefits almost immediately.

This emphasis on building endogenous, self-reliant technological capabilities does not condemn the South always to lag behind the technological frontier of the latest hardware. Instead, it responds to two imperatives that will otherwise overwhelm the ability of any plausible transfer of narrowly defined technology to contribute meaningfully to greenhouse gas reductions in the South.

First, the vast demographic transition of the South's population growth combined with immense urbanization implies a primary reliance on informal, self-help development. Only an enormous proliferation of local technological research and development institutions can generate and deliver sufficient adapted, appropriate technology to end users. Without this local capability, environmentally benign technological alternatives will often not fulfil local needs and will not attract local users. Foreign technology can only supplement and never substitute for local technological capabilities that support the modernization process.

Second, developing countries confront the likelihood of a 'green' technological revolution in North in bioengineering, waste control, recycling, and product and process engineering early in the twenty-first century. This reformation will be as epochal as were steam motive power, electrical and then electro-mechanical technology, and electronics in their time. The green 'techno-economic' paradigm is driven by the need to preserve, conserve and restore ecosystems at local, national, regional and global levels. Consequent technological innovation in the North may devalue many of the traditional commodity exports and current manufacturing strengths of the developing countries (most notably, of the fossil fuel exporters).

Leaders in developing countries must be alert therefore to the opportunities that arise in a greenhouse world to obtain the best terms for technology transfer. To this end, they must nurture a highly receptive local environment to gain the most benefit from this transfer. Vendors of carbon abatement services, for example, could link their services to offsetting transfers of techniques and technology by buyers of abatement.