IF A COUNTRY IS NOT CAREFUL, DOING CLIMATE TECHNOLOGY TRANSFER MAY ACTUALLY LEAD TO LOSS OF CONTROL OVER ITS ECONOMY

CURRENT SOCIETAL CONCERNS
Elpidio V. Peria
7 September 2013

The workshop yesterday held in Bonn, Germany on doing technology needs assessments (TNAs) organized by the United Nations Framework Convention on Climate Change’s (UNFCCC) Technology Executive Committee (TEC) has shown that as currently practiced, if a country decides to engage in climate technology transfer, it may not really lead to real and actual technology transfer immediately but will instead result in foreign investors dictating what a country should do to adopt policies which may be good for the investors, but may actually turn out to be disadvantageous to the country and not enable it to do climate change adaptation and mitigation in a world that’s on track to warm up to 4 degrees centigrade before the end of the twenty-first century.

The workshop has presented the UNFCCC Secretariat’s synthesis of the country reports on the technology needs assessments that some 32 countries (Philippines not included, only Thailand and Indonesia for SEAsia) had done for the period 2008 up to April 2013 and while the synthesis has pointed to some needs for technology transfer in the areas of climate mitigation in the energy, transportation and the industrial sectors of a country and for climate adaptation in agriculture, water and infrastructure sectors, there are things that a country has to do first before it may be able to secure these technologies.

What are these things that a country has to do first before it will get their needed technologies? First, they will have to do a full technology needs assessment (TNA), which if the handbook of the United Nations Development Program (UNDP)) is to be followed closely, and they are saying it should be followed closely to have good results, it may last up to up to two years. But after that, what a country has to do next is to come up with a technology action plan (TAP).

This TAP contains a Barrier Analysis Report, which consists of what may impede an investor from putting money on all these technology transfer projects and a country has to first remove these impediments, called barriers here in the parlance of the technology experts meeting here. Barriers may range from the economic policies, like in the Philippines’ case, restrictions on foreign ownership in certain industries, or the various regulatory requirements, including environmental regulations and sometimes, even local government ordinances, among other barriers. If one thinks this can be done in a snap of a finger, one doesn’t really know one’s country.

The TAP will also contain a Project Ideas Report which contains the concepts for projects, not even a proposal yet, which may be further taken up and developed into full-blown proposals later for interested investors.

But after the TAP, all these experts are saying is that then these plans have to be linked to other development plans of a country, or to other ministries or agencies that really matter, like, in the Philippines’ case, the Department of Finance or the National Economic Development Authority.

Given that most bureaucrats in one agency don’t usually coordinate on their own without being told by their superiors, and some agencies think that they are the ones that should be followed by other agencies in this or that particular area of their authority, it’s no wonder that getting these agencies to really sit down and work closely, as in closely coordinate their efforts so that there is no duplication of efforts, is actually a major work, or a herculean effort at that if need be, one that actually calls for a separate action plan in itself.

All the while as these things are drummed into my head, I was asking myself, so in all these stages, when will the real and actual development and transfer of technology happen?

I asked that question to the presentor, Mr. Jonathan Duwyn of the Energy Branch of the Division of Technology, Industry and Economics of the UNEP, based in Paris. His answer as I recall it as I did not take notes but just listened intently : TNAs are not an end in itself and some countries are more advanced than others, even if you have identified technologies, there are still many things that you have to do, and there are still many other ministries that you have to convince; you can’t do more action unless you know where to get the funding for these things, and there is work first to integrate these into your development plans otherwise it will not happen.

If I would summarize what he said in so many words, what he said actually was: “we’re not really sure.”

In all these TNAs done by these 32 countries, there was needed funding of around US$24.7 billion. How that will be funded, we don’t really know but there was an update by a seething workshop Observer Meena Raman of Third World Network who commented, how come the much-debated and fought-for financial mechanism for the UNFCCC, the Green Climate Fund, has only some US$6million in its funds for now to fight climate change and this Climate Technology Center has some targeted funding of some US$100 million in its five-year business plan (actually what’s committed so far is some US$22million, but that’s more than three times than what the GCF currently has), where are the priorities of countries to the UNFCCC ?

So, in all the discussions in this workshop, what has been repeatedly said ad nauseam like a mantra was that : a country has make itself attractive to investors first, and as stated in one part of the Q&A by Jean-Yves Caneil, the representative of the Business International NGOs (BINGOs) in the Advisory Board of the Climate Technology Center, and head of Climate Policy of EDF or Energie de France, a French energy company, what’s important for the private sector is for a country to have good institutions, exclusivity of marketing and some economic instruments to get the best technologies. For Franck Jesus, Senior Climate Change Specialist of the Global Environment Facility, what the private sector will need are a set of policies/incentives for climate investment, adequate financing with terms that are acceptable with little transaction costs, and the need to see how risks are managed, like policy risks, and these risks are often due to changes in policy that imperils an investment in a country. This means that a country should not change its policies that will make these investors unhappy.

Suppose what a country’s wants is a set of technologies that have no guaranteed rates of return to the investor, like in the case of a technologies for climate adaptation, what actually happens to these projects?

Phil LaRocco, a US finance entrepreneur, a panelist in the session on implementation of TNAs, said that what a country needs to do is to bundle these projects, in the parlance of finance people, it’s like breaking up the project concept into components that will spread the risk so that investors may fund it, or to just go around and sell it to as many investors as one can, who knows, as he said, even if it may be rejected by the 29th potential investor, perhaps the 30th investor you might pitch it to may be convinced. He reminded everybody that the pension funds of the world which has some nine, yes, nine (9) trillion US dollars of assets in them, wants only a guaranteed minimum return, risk-free, forever, of 3%, so if a country can package these financially unattractive projects well along these criteria, then perhaps they may get funded.

At the close of the workshop, what one gets as a take-away is that, doing climate technology transfer is not for the country that is not determined to do it, as in, faint-hearted countries need not apply. It is also important that people in key government agencies who will have to do this thing have to get involved closely and continuously right at the beginning, so that climate technology transfer will actually happen, perhaps in a manner that preserves a country’s self-respect and dignity so it may be able to say no to some of these conditionalities or prerequisites of investors, and eventually preserves its institutional policy space to do what it thinks is good for its people. After all, these perceived barriers by the investors (environmental regulations or regulatory requirements for businesses) are there to protect the general public, so a country has to make a clear decision what it will give up, or perhaps a clear idea of what it seeks to gain so that it will not regret so much what it will give up to get these technologies from abroad.

Or it may just have to embark on a program to fund its own technology emulation program much similar to how Japan and South Korea reached its level of technological sophistication today.

But it also goes back to basic principles in the UNFCCC, which developed countries, primarily the US, is refusing to recognize until now – how do we apply the principles of common but differentiated responsibilities (CBDR) to this technology transfer conundrum that has become hostage to so many requisites now, why is the duty to fund all these projects being outsourced to the private sector, didn’t these developed countries commit back then in Rio de Janeiro during the Earth Summit in 1992 that they will provide the necessary finance and technology so countries may be able to combat biodiversity loss, desertification and do climate change adaptation and mitigation ?

Resolving how this principle will be applied now may be the key to determining whether all these institutions of the UNFCCC will really succeed in what it set out to do.

oOo

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