Technology Transfer in the Clean Development Mechanism: The Role of Host Country Characteristics

Abstract

Technology transfer is not an explicit objective of the Clean Development Mechanism (CDM). In some projects it however constitutes a valuable co-benefit as it exposes developing and emerging countries to clean technologies and helps improve local living conditions. Understanding the drivers and barriers to technology transfer in CDM projects is therefore essential to direct investment lows in host countries and promote enhancements of the current CDM framework. In this respect, the contribution of this paper is twofold. First, it identifies stepping stones and stumbling blocks to technology transfer in the CDM. A one percent increase in research and development expenditure is found to be associated with a 48 percentage point increase in the likelihood of a technology transfer. Second, the paper analyzes the correspondence of these supporting factors and barriers with the likelihood of a transfer of the different types of technology (equipment, knowledge or both). The paper concludes with suggestions for improvements of the CDM to better assess technology transfer in future offsetting projects.