“[T]he question before us is no longer the nature of the challenge — the question is our capacity to meet it.”In December 2009, at the 15th global climate change conference in Copenhagen, leaders from 115 nations gathered to negotiate an international agreement for addressing climate change. The agreement was expected to include provisions to enhance the international transfer of technologies capable of adapting to or mitigating climate change. Unfortunately, the talks stalled. Developed and developing nations disagreed on a host of issues, especially the treatment of intellectual property rights “IPR” protecting clean technologies. Even before the Copenhagen conference, developing nations proposed to exclude clean technologies held by developed nations from patent protection. Developed nations, meanwhile, considered that IPR should not be part of the global climate change negotiations and proposed to remove provisions dealing with IPR from the negotiations. The Copenhagen conference resulted in a non-binding agreement that did not reference IPR issues. Nevertheless, the debate regarding IPR persisted through the subsequent global climate change negotiations. The global climate change conference, held in Lima in December 2014, presented both developed nations’ and developing nations’ positions regarding IPR as equal options to be negotiated at the next global climate change conference in Paris in December 2015. The agreement resulting from the 2015 Paris conference, however, did not mention IPR issues; just as in the Copenhagen conference, the preference of developing nations was not reflected. The debate regarding the treatment of IPR in the climate change context breaks down as follows: developed nations insist on strong IPR for clean technologies, viewing IPR as indispensable for incentivizing the development of such technologies and facilitating their deployment. Conversely, developing nations have sought to weaken or even remove IPR for clean technologies, viewing the existence of IPR as a major barrier to the international transfer of clean technologies. Hence, an ongoing divide exists between developing and developed nations regarding the role of IPR in the international transfer of clean technologies for addressing climate change. International agencies such as the World Trade Organization “WTO”, the World Intellectual Property Organization (‘WIPO”, the United Nations Environmental Programme “UNEP”, the World Meteorological Organization, and the World Bank have all initiated discussions to resolve the divide. The stakeholders in this discussion include governments, public entities, and commercial entities from developed and developing nations, and those with interests in combatting climate change. To date, these shareholders are still searching for effective solutions. This article joins the search by exploring whether the existence of IPR is a major barrier to the international transfer of clean technologies, and the possible reasons behind the currently limited transfer of clean technologies to developing nations. After analyzing evidential data available on clean technologies and reviewing current scholarship on international technology transfer, this article concludes that IPR has been a major barrier to the international transfer of clean technologies, and that successful and sustainable international transfer of clean technologies needs certain conditions, which require efforts from both developing and developed nations. To create such conditions, and continue advancing the effort of leveraging clean technologies to address climate change, this article proposes a solution based on domestic innovation, international aid, and international technology collaboration, instead of the international transfer of clean technologies. This article proceeds as follows. Part I reviews climate change, the role of clean technologies in addressing climate change, the reality of international transfer of clean technologies, and the disagreement between developed and developing nations over how to improve international transfer of clean technologies to developing nations. Part II explores whether the existence of IPR is a major barrier to the international transfer of clean technologies to developing nations and what may be the reasons for the currently limited international transfer of clean technologies to developing nations. Based on Part II’s analysis and findings, Part III proposes the solution summarized above. Part IV discusses the advantages and concerns regarding the solution.  of clean technologies are a central part of the response to climate change. Because of developing nations’ need for clean technologies, and because developed nations own the majority of the existing clean technologies, transfer of clean technologies from developed nations to developing nations has been the focus of the global effort in leveraging clean technologies to address climate change. However, despite this focus, such transfers have been limited in the past two decades, with the majority going to the emerging economies, and little being transferred to the other developing nations. Meanwhile, developed and developing nations continue to disagree on how to improve the situation.  The Intergovernmental Panel on Climate Change “IPCC”, the leading international scientific organization for assessing climate change, concluded that the period spanning from 1983-2012 was likely the warmest period of the past 1,400 years. The IPCC also concluded that greenhouse gases “GHG” present in the atmosphere are at levels unprecedented in at least the past 800,000 years. The effect of climate change on human and natural environments is global. The IPCC found that changes in climate have impacted natural and human systems on all continents and across the oceans. These impacts include alteration of ecosystems, disruption of water supply, reduction of crop yields that result in increased food price and food insecurity, excess heat-related human mortalities, and infectious disease patterns. According to a 2009 report by the Global Humanitarian Forum, climate change costs 300,000 human lives each year, and leaves 300 million people vulnerable to its effects, a number set to double by 2030. The United Nations Framework Convention for Climate Change “UNFCCC”, the main global agreement designed for addressing climate change, attributes climate change “directly or indirectly to human activity that alters the composition of the global atmosphere.” In its latest assessment report, the IPCC once again confirmed that, using statistical qualification methods on the scientific data collected, “it is extremely likely that human influence has been the dominant cause of the observed warming since the mid-20th century.” The human influence or activities referred to involve the use of fossil fuel, e.g., by developed nations’ coal-fired industries since the Industrial Revolution and today’s hydro-carbon fueled transportation industries. These human activities account for the 70% increase in GHG emissions from 1970 to 2004. Technologies relying heavily on fossil fuel — such as steam-engine locomotives, ships, airplanes, and power grids — were the backbone of these human activities. These high-carbon technologies attributed to the increased GHG emissions, leading to climate change.  play a critical role in the solution for climate change. These technologies produce low GHG emissions and enable us to mitigate or adapt to climate change. Rapid development and deployment of clean technologies is needed to address climate change and to make clean technologies viable market alternatives to traditional high-carbon technologies. Stakeholders in climate change have agreed that the ability for humans to survive climate change largely depends on the rapid development and global deployment of a wide variety of clean technologies. The UNFCCC recognized clean technologies as an important route for addressing climate change. The United Nations General Assembly also adopted resolutions recognizing the fundamental role played by innovative clean technologies in addressing climate change. Discussions about addressing climate change have generally focused on mitigation and adaption. The UNFCCC defines mitigation as human intervention to reduce the production or enhance the removal of GHGs, and adaptation as adjustment in natural or human systems in response to actual or expected climatic change, which moderates harm or exploits beneficial opportunities brought by climate change. Mitigating climate change is crucial. Assessments have suggested that to avoid the catastrophic effects of climate change, global average temperature should rise no more than 2°C above pre-industrial level “the 2°C goal”. In order to limit temperature increase, GHG concentrations in the atmosphere need to be stabilized so that they will not continue to cause further atmospheric warming. Nations that are parties to the UNFCCC have committed to limit GHG emissions in a way to achieve the 2°C goal. However, achieving this goal would require the development and deployment of a wide range of clean technologies. For example, the IPCC determined that the necessary mitigation technologies include technologies that utilize renewable energy sources — e.g., solar, wind, biomass, geothermal and hydro energy — to produce electricity, clean coal technologies that reduce GHG emissions from fossil fuel burning, and technologies to improve energy efficiency. While mitigation is crucial, adapting to the impact of climate change is also an important, long-term effort. Many GHGs stay in the atmosphere for a hundred years or more. Even if we were to completely stop GHG emissions now, the existing GHG concentration in the atmosphere would still cause a certain amount of future rise in global average temperature. Like mitigation, adaption will also require the development and deployment of certain technologies, such as seeds that can survive flooding caused by rising sea levels, irrigation technologies for resisting droughts, and early-warning or defense systems for extreme weather. Clean technologies have developed significantly in the past decades. For example, technological advancements have reduced the production cost of wind energy by 80% over the last twenty years and solar power by 90% since the 1970s. However, even with these achievements, there remains a considerable gap between current efforts to develop clean technologies and the level of investment required. First, multiple sectors of clean technologies will require breakthroughs in development. The UNFCCC indicates that further breakthroughs are needed in the areas of carbon capture and storage, hydrogen and fuel cells, biofuels, power storage systems and micro-generation, clean energy technologies, early warning systems for extreme weather events and biotechnology. For example, waves of retiring fossil-fuel-based power plants are ready to adopt clean coal technologies, such as carbon capture and sequestration. However, carbon capture and sequestration technologies have advanced slowly. In order to meet the 2°C goal, carbon capture and sequestration technologies must double their capture and storage rates by 2025. Second, further technical advancements are needed to reduce the price of clean technologies and make them viable alternatives to traditional high-carbon technologies. Currently, clean technologies are often more expensive than existing fossil-fuel-based technologies. For example, renewable energy technologies still need significant innovation to compete with traditional hydrocarbon-based technologies at similar price level. The World Bank indicated that energy storage would need further cost reduction and performance improvement for large-scale deployment of solar and wind power and electric vehicles. In 2012, the global energy demand for fossil fuels was 82% while the demand for renewable energies was a mere 13%. The consumption of modern renewable energies has risen at an annual growth rate of 4%, while an annual growth rate of 7.5% is needed. Third, the deployment of clean technologies needs to accelerate. To meet the 2°C goal, the net volume of global anthropogenic GHG emissions will need to be reduced 60% by 2050, using the 2000 global anthropogenic GHG emissions as a base line. However, the traditional model of technology deployment may be too slow to achieve a 60% reduction in global GHG emissions by 2050. Studies show that inventions in the energy sector generally take 20-30 years to reach mass markets, which normally start first in the nations where the inventions are developed. Under the traditional model of deployment, developed nations develop new technologies, which reach developing nations via commercial roll-outs. To accelerate the development and deployment of clean technologies, one possible approach is for both developing and developed nations to develop and deploy clean technologies independently and collaboratively, instead of relying on the traditional model of deployment. The recent rapid R&D efforts for clean technologies in Brazil, China, India, and a few other developing nations illustrate the independent effort by developing nations, and the Mediterranean Solar Plan illustrates the collaboration between developed and developing nations on a large scale. However, these exemplary practices are yet to become common practice.
– Barack Obama
1. Transferring Clean Technologies to Developing Nations Has Been an Important Focus of International Climate Change EffortsInternational instruments such as the IPCC and the UNFCCC have emphasized the transfer of clean technologies from developed to developing nations. This emphasis seems appropriate, given developed nations’ ownership of most existing clean technologies under IPR protection and the growing need of developing nations to employ clean technologies to address climate change and to develop their economies. In developing their economies, developing nations have increased their demand for energy resources, and have thus increased their impact on the environment. For example, in 2014, China became the world’s largest overall energy consumer, followed by the U.S., the EU, and India. Historically, developed nations dominated in GHG emissions. However, starting in 2004, developing nations’ GHG emissions from energy use surpassed those of developed nations; by 2010, the GHG emissions from developing nations exceeded those of developed nations by about 40%. Much of this increase may be traced to the rapid growth of China, India and other emerging economies. This figure is expected to increase to 130% by 2040. Therefore, to prevent further aggregation on the climate, it is important that developing nations fully utilize clean technologies in the pursuit of economic development. On the other hand, developed nations currently own most of the existing clean technologies that are protected by IPR. For example, according to a 2008 international survey, developed nations owned 80% of patents covering relevant clean technologies (though the percentage was a significant reduction from ten years ago, where developed nations owned 95% of the patents on clean technologies.) Consequently, global climate change technology efforts have focused on the transfer of clean technologies from developed nations to developing nations. As early as 1992, the IPCC pointed out that “as the GHG emissions in developing nations are increasing with their population and economic growth, rapid transfer, on a preferential basis to developing nations, of technologies which help to monitor, limit or adapt to climate change, without hindering their economic development, is an urgent requirement.” The UNFCCC, signed in 1992, subsequently listed technology transfer as a main method for addressing climate change. The UNFCCC requires developed nations to take “all practicable steps to promote, facilitate and finance, as appropriate, the transfer of or access to environmentally sound technologies and know-how” to other nations, particularly developing nations. The WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights “TRIPS Agreement”, signed in 1994, also asks developed nations to promote and encourage technology transfer to the least developed countries “LDCs” members. Specifically, the TRIPS Agreement asks developed nations to “provide incentives to enterprises and institutions in their territories” so as to promote and encourage technology transfer to the LDCs to “enable them to create a sound and viable technological base.” To facilitate the transfer of clean technologies, the UNFCCC has set up several mechanisms. The first mechanism is a technology transfer framework established in 1992, when the UNFCCC was signed. The framework has several components, including a Technology Needs Assessment component wherein parties of the UNFCCC identify and prioritize the clean technologies needed, as well as determine the major barriers for the inbound transfer of clean technologies. The second is the Clean Development Mechanism (CDM) and Joint Implementation (JI) mechanism established by the UNFCCC Kyoto Protocol in 1997. The CDM and JI mechanisms allow a nation with an emission-reduction or emission-limitation commitment under the Kyoto Protocol to implement an emission-reduction or emission-removal project in developing nations. Such projects can earn scalable emission reduction credits that are counted toward the Kyoto commitment of the providing nation. The third is the Technology Mechanism established by the 2010 Cancun climate change conference, to help nations develop and transfer clean technologies. The Technology Mechanism aims to support and accelerate clean technology diffusion via a nation-driven approach, based on national circumstance and priorities of developing nations.  The IPCC considers technology transfer to include the adaptation of the transferred technology, “the process of learning to understand, utilize, and replicate the technology, including the capacity to choose and adapt to local conditions and integrate it with indigenous technologies.” The Kyoto Protocol of the UNFCCC also has a broad definition of technology transfer, which includes providing developing nations the know-how and best practices associated with a transferred technology. Channels for technology transfer can be market-based, such as trade, foreign direct investment and technology licensing. Transfer can also be informal. Organizations or individuals may engage in unsanctioned imitation and technical and managerial personnel may bring “know-how” with them as they change employment. Technology transfer can be initiated by the commercial sector or the public sector. In practice, most technology transfer occurs in the commercial sector. Nevertheless, the role of the public sector is important. Technology transfer normally is neither an automatic nor a costless process, and it can become subject to market failures; in such cases, public interventions such as legal and policy incentives are necessary.  In 2011, researchers from the London School of Economics and Political Science and the Organization for Economic Cooperation and Development “OECD” published a global survey on the invention and transfer of climate change mitigation technologies “Study A”. Study A analyzed the geographic distribution of thirteen classes of climate mitigation technologies during 1978-2005, and was based on patent data from over eighty national and international patent offices. As the figure below shows, Study A found that international transfer of clean technologies mostly occurred between developed nations (73% of the overall exported inventions). It also noted that exports of clean technology inventions from developed nations to emerging economies — such as China, Brazil, and India — were growing rapidly (22% of the overall exported inventions). The study further found that the flow of clean technology inventions from developing nations to developed nations made up 4%, while the flow between developing nations was much less, a mere 1% of the overall flow. This implies that the transfer of clean technologies from developed nations to developing nations that are not emerging economies was almost nonexistent. A different global patent survey confirms the findings of Study A. In 2010, the UNEP, the European Patent Office and the International Centre for Trade and Sustainable Development conducted a study of the patenting landscape and licensing practices of key clean energy technologies “Study B”. This study discovered that 58% of its respondents (entities based in developed nations) reported they had not entered into licensing agreements with entities based in a developing nation during the three years before 2010, the time when Study B was conducted. Conversely, Study B found that the owners of clean technologies were willing to transfer the technologies. Of the respondents in Study B, 73% believed it was important to seek opportunities to license out their technologies, and 82% viewed IPR as vital to licensing transactions. This data indicates that clean technology owners do want to transfer the technologies, and the existence of IPR is critical to facilitating such transfers. Study B also found that clean technology owners, especially academic and public organizations, were generally open to providing flexible licensing terms to entities based in developing nations with limited financial resources. Similar to Study A, Study B also found that emerging economies such as China, Brazil, India and Russia were the main beneficiaries of licensing flows from developed nations. Study B indicated that companies from developing nations experienced some difficulties in obtaining clean technologies from entities based in developed nations,  resulting from the high cost of licensing the foreign clean technologies and/or having to resort to obtaining less-advanced substitutes. A third survey, a 2009 United Nations report, assessed the effect of the CDM — one of the technology transfer mechanisms mentioned in Part I.C.1 “Study C”.  The study noted that only 36% of the 3,296 documented CDM projects involved the transfer of clean technologies. Study C also noted that the CDM projects had been concentrated in only a few developing nations, e.g., Brazil, China, India, Mexico. These, again, are emerging economies. The rest of developing nations had taken up only 25% share of the overall CDM projects. In summary, the available empirical evidence shows that the international transfer of clean technologies occurs mainly between developed nations. The more infrequent, but growing transfer of clean technologies from developed nations to developing nations flows mainly to emerging economies, such as China, Brazil, India, Mexico, Russia and South Africa. Little transfer occurs between developed nations and the rest of the developing nations, or among developing nations themselves.  According to this view, IPR of clean technologies keeps prices of clean technologies high and limits access. Developing nations have pointed to specific instances to support this view. For example, firms and R&D institutions in developing nations have indicated that commercial firms and public institutions in developed nations refused to license important technologies related to fuel-cells. Local firms in India indicated that they were refused licenses for patented technologies on ozone reduction. Several developing nations have also criticized a small group of multinational companies “MNC”s) owning clean technologies needed by developing nations. These MNCs were criticized for using their ownership of clean technologies as a means to control production, therefore limiting their transfer to the developing nations who needed these clean technologies. During recent UNFCCC climate change conferences, developing nations suggested limiting or eliminating IPR for clean technologies. Specifically, Brazil, South Africa, China, India, and Russia have suggested rethinking the existing IPR regime, excluding clean technologies from patent protections, introducing a compulsory licensing scheme for clean technologies, and pushing for technology transfer, flexible licensing mechanisms, and institutional mechanisms. The president of Bolivia likewise commanded that “innovation and technology related to climate change must be within the public domain, not under any private monopolistic patent regime that obstructs and makes technology transfer more expensive to developing countries.” In 2013, the WTO TRIPS Council organized a discussion on IP, Climate Change, and Development. Ecuador submitted a proposal “Ecuador 2013 proposal”. In the proposal, Ecuador argued that IPR could “create a monopolistic situation characterised by high prices and a restriction of the dissemination of knowledge” for adapting to climate change and use of clean technologies. Ecuador proposed to exclude clean technologies from patentable subject matter, include in the TRIPS Agreement a new provision on the transfer of expertise or know-how, implement compulsory licensing, and reduce the life term of patents on clean technologies. A number of developing nations such as Cuba, Bangladesh, Bolivia, Brazil, India, Indonesia, Nepal, Rwanda and the Dominican Republic supported Ecuador’s proposal. India especially supported the proposal’s stance regarding compulsory licensing and reduction of patent life term. India stated:
On any principle of equity, industrialized countries have to bear a large share of the burden. They are historically responsible for the bulk of the accumulated greenhouse gas emissions and this alone suggests a greater responsibility. They also have high per capita incomes, which give them the highest capacity to bear the burden. They are technically the most advanced, and to that extent best placed to provide environmentally sound technology to developing countries at fair and favourable terms and conditions.India’s statement captured the essential position of developing nations toward the proposal.  Industry associations, such as Alliance for Clean Technology Innovation, assert that strong IPR protection provides “legal certainty” for technology owners to engage in “voluntary, market-based technology transfer in all its possible forms.” Researchers for the International Centre for Trade and Sustainable Development “ICTSD” stated that IPR provides incentives for clean technology innovations, especially in sectors such as wind, solar, carbon capture and storage, and biofuels that need major R&D investments. Consequently, governments of developed nations — such as the U.S., Australia, Japan, and the EU — have insisted on strong IPR protection for clean technologies. Todd Stern, the U.S. Special Envoy for Climate Change, stated: “we must make the development and dissemination of technology a top priority in order to help bring sustainable, low-carbon energy services to people around the world, AND we must do so in a way that recognizes the importance of protecting and enforcing intellectual property rights.” The EU, Japan, Canada, New Zealand have expressed similar views. Australia denied that IPR could be a significant barrier to technology cooperation or use. Instead, Australia argued, greater incentives should be provided so that the commercial sectors—responsible for 86% of overall global investment and financial flows—can engage in technology transfer. Responding to Ecuador’s 2013 proposal, which gained support from quite a few developing nations, several developed nations countered with the position that IPR encourages the development of clean technologies and allows their transfer at accessible prices. The EU’s response noted that a large quantity of key clean technologies are already in the public domain, the LDCs offer market values insufficient to attract commercial businesses in developed nations, and the LDCs do not provide IPR; therefore the LDCs can use foreign clean technologies for free. Further, the EU argued that without patent protection for products and processes, companies owning the clean technologies in developed nations may be reluctant to engage in technology transfer and associated investments. The EU stated: “IPR, particularly patents, will be a catalyst, not a barrier, to creating and deploying low-carbon technologies….Threat[s] to strong IPR, such as easily-obtained compulsory licensing, are likely to be a strong disincentive to invest.” The EU’s position likely represents the essential view of developed nations on IPR’s role in the international transfer of clean technologies to developing nations.