Technology transfer mechanisms and international cooperation to combat climate change

Abstract

Current climate change protocols only marginally address the issue of technology transfer, and where they do, financing is far from what is necessary. This article proposes a new technology transfer mechanism, labelled Green Technology Banks, as part of a climate change agreement that includes emission limits for developed and developing countries. We evaluate the mechanism according to the following five criteria, standard in the literature that analyses technology-oriented agreements: environmental effectiveness, technological effectiveness, economic efficiency, incentives for participation and administrative feasibility. Under the assumption that several permit markets exist that are imperfectly linked, we show that the mechanism performs well according to the specified criteria, while the largest obstacle remains the acceptance of emission limits by developing countries. However, ancillary benefits, access to advanced technology and increased government revenue from emission trading represent a sizeable compensation package. Developed countries would have to shoulder most of the cost, but considering the recent efforts to establish the Green Climate Fund as part of new international climate change architecture, the willingness to pay for such efforts seems to be on the rise.