Sunday, November 30, 2008

WHO, UNFCCC and EU Parliament Ignore World Bank Study Findings: Weak IP & Limited Rule OF Law Limit Technology Diffusion in Developing Countries

Warming up to Trade? Harnessing International Trade to Support Climate Change Objectives

The World Bank

June 18, 2007


There is increasing global recognition of the economic, social, and developmental consequences of climate change. The Kyoto Protocol remains the key international mechanism under which the industrial countries have committed to reduce their emissions of carbon dioxide and other greenhouse gases. There are a number of issues that still need to be resolved with regard to efficient implementation of emission reduction goals.

Although a total of 172 countries and a regional economic integration organization (EEC) are parties to the agreement (representing over 61 percent of emissions), only a few industrialized countries are actually required to cut their emissions (see Annex I for a list of Kyoto Protocol members and their emission targets). The United States, which is the world’s largest emitter, and Australia have not ratified the protocol. The United States has conditioned its entry on further engagement of major developing country emitters, such as India and China.

This has fueled issues of competitiveness and other economic impacts in countries that have began to implement the Kyoto regime. Businesses in many Kyoto-implementing countries have already started to put pressure on their governments to ease competitive pressures through measures such as a border tax. Unlike some other global environmental treaties—such as the Montreal Protocol on Substances that Deplete the Ozone Layer—the Kyoto Protocol does not contain explicit trade measures to enforce compliance. While this supports the World Trade Organization’s (WTO) global trading principles, the protocol does not stipulate specific methods by which the members should design and implement policies to address climate change commitments. This leads to much speculation about a potential conflict between the Kyoto and WTO regimes.

While developed countries remain the largest per capita emitters of greenhouse gases today, the growth of carbon emissions in the next decades will come primarily from developing countries, which are following the same energy and carbon-intensive development path as did their rich counterparts. Among the developing countries, the main growth in carbon emissions will emanate from China and India because of their size and growth. Between 2020 and 2030, it is projected that developing country emissions of carbon will exceed that of developed countries. Any kind of post-Kyoto international regime that will emerge to address climate change cannot ignore these startling facts.

While there is potential for conflict in a number of areas between trade and an emerging global environmental regime to combat climate change, this also provides an opportunity for aligning policies that could stimulate production, trade, and investment in cleaner technology options. For example, a number of issues currently on the agenda of the WTO could potentially be harnessed to promote broader global environmental objectives:

  • [F]or example, a multilateral liberalization of renewable energy sources or an agreement to remove fossil fuel subsidies would equally serve climate change objectives.

  • The WTO negotiations on environmental goods and services could potentially be used as a vehicle for broadening trade in cleaner technology options and thereby help developing countries to reduce their greenhouse gas emissions and adapt to climate change.

  • A more transparent and justifiable labeling and standards regime could similarly serve the interests of both trade and global environmental objectives.

  • A more uniform pricing of energy under the UNFCCC framework, given the common but differentiated responsibilities, could negate some trade issues regarding competitiveness and leakage.

In the context of these implications on linkages between trade and climate change, this study assesses the following:

  • What are the main policy prescriptions for reducing greenhouse gases that are employed by OECD countries and how do they impact the competitiveness of their energy-intensive industries?
  • On account of the impact on competitiveness, is there is leakage of energy intensive industries from OECD countries to developing countries?
  • Under what conditions can one justify trade measures under the WTO regime?
  • What are the impacts of levying trade measures on trade flows and emissions?
  • What are the underlying trade and investment barriers to the use of clean energy technologies in developing countries?
  • In addition to tariff and nontariff barriers, are there other issues impacting the diffusion of clean energy technologies in developing countries?
  • Is liberalization of renewable and clean coal technologies a plausible solution to assisting developing countries in achieving a low-carbon growth path?
  • The Doha Round of negotiations on environmental goods and services provides an opportunity for addressing clean technology transfer issues over the businessas-usual scenario. What conditions are necessary for negotiating a “climate-friendly” package under the current WTO framework?

In an attempt at advancing the trade and climate change agendas, the key findings and recommendations of this report are:


...Industrial competitiveness in Kyoto implementing countries suffers more from energy efficiency standards than from carbon taxation policies.

...Industrial competitiveness affected by carbon taxation policies are often offset by “policy packages.”

...Some evidence supports leakage of carbon-intensive countries to developing countries.

...Trade measures can be justified only under certain conditions.

...Articles XX(b) and (g) allow WTO members to justify GATT-inconsistent measures if these are either necessary to protect human, animal or plant life or health, or if the measures relate to the conservation of exhaustible natural resources, respectively. However, Article XX requires that these measures not arbitrarily or unjustifiably discriminate between countries where the same conditions prevail, nor constitute a disguised barrier to trade.

...The proposed EU “Kyoto Tariff” may hurt the United States’ trade balance.

There is increasing industry pressure in the EU to sanction U.S. exports for not adhering to the Kyoto targets. This has resulted in calls for a “Kyoto tariff” on a range of U.S. products to compensate for the loss in competitiveness.

Simulation analysis undertaken for the study finds that the potential impact of such EU punitive measures could result in a loss of about 7 percent in U.S. exports to the EU. The energy-intensive industries such as steel and cement, which are the most likely to be subject to these provisions, would be most affected and could suffer up to a 30 percent loss. Actually, these are conservative estimates, given that they do not account for trade diversion effects that could result from the EU shifting to other trading partners whose tariffs could become much lower than the tariffs on the U.S.

...Varied levels of tariffs and NTBs are impediments to clean energy technology diffusion in developing countries.

[T]the rising share of developing country emissions resulting from fossil fuel combustion will require future commitment and participation of developing countries, particularly large emitters like China and India.

Some developing countries have already taken some measures to unilaterally mitigate climate change; for instance, they have increased expenditures on R&D for energy efficiency and renewable energy programs. It is important that these countries identify cost-effective policies and mitigation technologies that contribute to long-term low carbon growth paths. Especially for coal-driven economies like China and India, investments are critical in clean coal technology and renewable energy like solar and wind power generation. Analysis suggests that varied levels of tariffs and NTBs are a huge impediment to the transfer of these technologies to developing countries...
(pp. 9-10)


...A closer examination of the “policy bundle” associated with energy taxation is warranted.
The results emerging from analysis in chapter 2 suggest that carbon taxation policies do not impact on the competitiveness of energy-intensive industries. This suggests that complementary policies (implicit subsidies, exemptions etc.)—which are used in conjunction with carbon taxation policies levied by these countries, particularly on energy-intensive industries—could be negating any impact of carbon taxation. A more detailed study of this issue is warranted, as it will yield a greater understanding of the implicit subsidies/costs that are associated with each industry. The importance of this finding cannot be understated...

...It would be useful at the outset for trade and climate regimes to focus on a few areas where short-term synergies could be exploited.
The energy efficiency and renewable energy technologies needed to meet future energy demand and reduce GHG emissions below current levels are largely available...
...Removal of tariff and nontariff barriers (NTBs) can increase the diffusion of clean technologies in developing countries.
...a removal of tariffs and NTBs for four basic clean energy technologies (wind, solar, clean coal, and efficient lighting) in 18 of the high GHG emitting developing countries will result in trade gains of up to 13 percent.
...Intellectual property rights, investment rules and other domestic policies should be streamlined for widespread assimilation of clean technologies in developing countries.

Firms sometimes avoid tariffs by undertaking foreign direct investment (FDI) either through a foreign establishment or projects involving joint ventures with local partners. While FDI is the most important means of transferring technology, weak intellectual property rights regimes (IPRs) (or perceived weak IPRs) in developing countries often inhibit diffusion of specific technologies beyond the project level. Developed-country firms, which are subject domestically to much stronger IPRs, often transfer little knowledge along with the product, thus impeding widespread dissemination of the much-needed technologies. Further, FDI is also subject to a host of local country investment regulations and restrictions. Most Non-Annex I countries also have low environmental standards, low pollution charges, and weak environmental regulatory policies. These are other hindrances to acquisition of sophisticated clean coal technologies.

By eliminating tariff and nontariff barriers in 18 high-GHG-emitting developing countries, trade liberalization results in huge gains in trade volumes, as illustrated in Table 3.2. It is worth noting that the change in trade volumes ranges from 3.6 percent to 63.6 percent across the four technologies identified for the study, on account of the varied level of tariffs on the technologies; the nontariff barriers, namely quotas and technical regulations; other investment barriers related to intellectual property rights; and the import elasticity of demand for these products. (p.51)
...While the impact of tariffs and other cost factors on technology transfers does vary across markets, and depends largely upon the tariffs applied, the scenario highlighted here illustrates that liberalizing trade can encourage clean coal technology transfer. However, this result does not capture all the other unquantifiable barriers. Trade-related intellectual property rights regimes and investment barriers significantly affect technology diffusion, but are not reflected in tariff or nontariff values. Encouraging technology transfer needs other policy measures such as protecting intellectual property rights and complying with licensing and royalty agreements...[For example,] in impediment to the expansion of clean technology markets exists on account of lax environmental standards and a weak intellectual property rights regime.
(p. 56)
...Box 3-4 A Case of Other Barriers to Technology Diffusion: The China Study
Weak Intellectual Property Regime (IPR) Regimes for IPR tend to vary widely, especially between developed and developing countries, due to differing interests, cultures, and administrative capacities. Industrialized countries, which are the main exporters of technologies, tend to see IPR as a primary means for promoting technology development by offering inventors protection to reap the benefits from their invention. Developing countries are more concerned with access to existing technologies at affordable costs, and to make them more widely available. Consequently, developing countries tend to have far weaker IPR laws than industrialized countries. Case studies on environmental markets in China (CESTT 2002) mention IPR infringements as a problem, though they are not characterized as a major obstacle. (p.57)
...Market Trends in Wind Power Technology

The wind power market has been historically dominated by dedicated wind-turbine manufacturing companies. More recently, large equipment manufacturers like GE and Siemens have entered the wind market by acquiring other companies. The top six manufacturers are Vestas (Denmark, merged with NEG Micon in 2004), Gamesa (Spain), Enercon (Germany), GE Energy (U.S.), Siemens (Denmark, merged with Bonus in 2004), and Suzlon (India).

A key development in the global wind power market is the emergence of China as a significant player, both in manufacturing and in the addition of wind power capacity. Five of the largest electrical, aerospace, and power generation equipment companies began to develop wind turbine technology in 2004, and four signed technology-transfer contracts with foreign companies. Such big players are bringing new competencies to the market, including finance, marketing, and production scale, and are adding additional credibility to the technology. In China, there are two primary turbine manufacturers, Goldwind and Xi’an Nordex, with market shares of 20 percent and 5 percent respectively (75 percent of the market being imports). Harbin Electric Machinery Co., one of the biggest producers of electrical generators in China, recently completed design and testing of a 1.2 MW turbine and was working toward production. Harbin’s turbine was entirely its own design, to which it claimed full intellectual property rights, the first such instance by a Chinese manufacturer. Dongfang Steam Turbine Works began producing a 1.5 MW turbine and installed four of these in 2005 (REN21 2006).

The industry is also witnessing a rapid globalization of its operations, with many companies considering investments overseas to be competitive. As noted by Brewer (2007), firms sometimes avoid tariffs by undertaking FDI inside the foreign market. Sometimes these projects involve local partners in joint ventures, in which there is the potential for inter-firm as well as international technology transfer in both directions. Vestas of Denmark, the leading manufacturer with 30 percent of the global market, opened a blade factory in Australia and planned a factory in China by 2007 to assemble nacelles and hubs. Nordex of Germany began to produce blades in China in 2006. Gamesa of Spain is investing $30 million to open three new manufacturing facilities in the U.S. Gamesa, Acciona of Spain, Suzlon of India, and GE Energy of the U.S. were all opening new manufacturing facilities in China, with Acciona and Suzlon each investing more than $30 million. The top exporters and importers based on the WIT’s data is presented below (Table 3.5).
[RECENT MEDIA REPORTS CONFIRMS AND FURTHER ELABORATES UPON THE RAPIDLY EVOLVING EUROPEAN & CHINESE WIND POWER INDUSTRIES. THEY INDICATE THAT THE CHINESE COMPANIES ARE POSITIONING THEMSELVES TO DIMINISH THEIR EUROPEAN COMPETITORS' DOMINANCE IN THE GLOBAL WIND POWER MANUFACTURING MARKET. See also: How Can Obama Deliver Millions of U.S. 'GREEN COLLAR' Renewable Energy (Wind) Manufacturing Jobs If They Are Mostly Owned/Outsourced By/To Europe?, ITSSD Journal on Energy Security, at: ; How Can Obama Deliver Millions of 'GREEN COLLAR' Jobs If Most Windmill Manufacturing Jobs Will be Outsourced to China and India?, ITSSD Journal on Energy Security, at: ].
...Intellectual property rights, investment rules, and other domestic policies should be streamlined for widespread assimilation of clean technologies in developing countries. Firms sometimes avoid tariffs by undertaking foreign direct investment (FDI), either through a foreign establishment or projects involving joint ventures with local partners. While FDI is the most important means of transferring technology, weak intellectual property rights regimes (IPRs) (or perceived weak IPRs) in developing countries often inhibit diffusion of specific technologies beyond the project level. Developed country firms subject domestically to much stronger IPRs often transfer little knowledge along with the product, thus impeding widespread dissemination of the much-needed technologies. Further, FDI is also subject to a host of local country investment regulations and restrictions. Most non-Annex-I countries also have low environmental standards, low pollution charges, and weak environmental regulatory policies. These are other hindrances to acquisition of sophisticated clean coal technologies.
(p. 93)

Thursday, November 27, 2008

Brussels and Brasilia, Aid Green & Health Activists, to Promote the Compulsory Licensing of Patented Climate Change Technologies as a Human Right


Fourth session

Poznan, 1–10 December 2008




20 November 2008

Original: ENGLISH

United Nations Framework Convention on Climate Change

Ideas and proposals on paragraph 1 of the Bali Action Plan

Note by the Chair*

The document was prepared by the Chair of the Ad hoc Working Group on Long-term Cooperative Action under the Convention (AWG-LCA) in response to the request from AWG-LCA at its third session. The document assembles the ideas and proposals presented by Parties on the elements contained in paragraph 1 of the Bali Action Plan (BAP), and takes into account the ideas and proposals presented by accredited observer organizations.

I. Introduction

A. Mandate

1. At its third session the Ad hoc Working Group on Long-term Cooperative Action under the Convention (AWG-LCA) invited its Chair to prepare, under his own responsibility, a document assembling the ideas and proposals presented by Parties on the elements contained in paragraph 1 of the Bali Action Plan (BAP), taking into account the ideas and proposals presented by accredited observer organizations. The ideas and proposals shall be those received by 30 September 2008 in response to the invitations contained in the BAP and in the conclusions of the first and second sessions of the AWG-LCA, as well as those that were presented during the first three sessions and in the in-session workshops. The document shall be prepared in accordance with the structure of paragraph 1 of the BAP. The AWG-LCA requested the secretariat to make the document available before its fourth session. It further invited the Chair to update this document before the closure of the fourth session of the AWG-LCA based on submissions received after 30 September 2008 and ideas and proposals put forward during that session (FCCC/AWGLCA/2008/12, para. 27).

B. Scope and general approach

2. This assembly document is prepared in response to the above mandate, taking into account the Group’s determination to shift into full negotiation mode, to further clarify and facilitate consideration of the ideas and proposals presented by Parties and organizations, and to advance negotiation on all elements of the BAP in a comprehensive and balanced way. Given the large number of submissions by Parties that arrived after 30 September, submissions received by 10 October have also been taken into account in preparing this assembly document.

3. In accordance with the mandate, this assembly document is focused on ideas and proposals from Parties and does not include expressions of views, examples of specific activities or other background information conveyed by Parties and observers.

… V. Enhanced action on technology development and transfer to support action on mitigation and adaptation

121. In addition to the assembly of ideas and proposals presented below, the discussion on this element of the BAP is also reflected in the LCA chair’s summaries.

… A. Effective mechanisms and enhanced means for the removal of obstacles to, and provision of financial and other incentives for, scaling up of the development and transfer of technology to developing country Parties in order to promote access to affordable environmentally sound technologies

1. Input by Parties

122. As general principles, Parties proposed that effective mechanisms and enhanced means for the removal of the obstacles to, and provision of financial and other incentives for, scaling up the development and transfer of technologies for mitigation and adaptation should:

(a) Be comprehensive to address all the stages of the technology development cycle; namely, R&D, demonstration, deployment and diffusion (Brazil, G77 and China, MISC.5; EC and its member States, technology workshop);

(b) Be guided by the provisions of the Convention, particularly Article 4, paragraphs 3 and 5, and be built on existing activities within the Convention, including the work of the Expert Group on Technology Transfer, and promote coherence by integrating expanding and ongoing activities relating to technology (Rwanda, MISC.1; Brazil, G77 and China, MISC.5);

(c) Be guided by a vision that ensures a climate change regime which deals with technology diffusion effectively (EC and its member States, MISC.5) and be informed by the shared vision for long-term cooperative action, including a long-term global goal for emission reductions, to achieve the ultimate objective of the Convention and the urgent need for adaptation to the impacts of climate change (Ghana, MISC.2/Add.1);

(d) Aim to achieve the accessibility, affordability, appropriateness and adaptability of technologies required by developing countries for enhanced action on mitigation and adaptation (G77 and China, MISC.5);

(e) Stimulate formation and development of national and international innovation systems and markets for technologies for mitigation and adaptation and create favourable investment and enabling environments, and engage the private sector (EC and its member States, technology workshop);

(f) Consider the private sector as the principal mechanism for technology diffusion (Australia, MISC.2/Add.1).

… 124. Mechanisms to address intellectual property right issue were proposed by Parties, including:

(a) Appropriate mechanisms to promote actions leading to technology development, deployment, diffusion, and transfer taking into account intellectual property issues (Argentina, MISC.1); a suitable intellectual property rights (IPR) regime for accessing technologies owned by the private sector in developed countries (India, technology workshop);

(b) An innovative IPR sharing arrangement for joint development of ESTs (China, MISC.5), considering criteria on compulsory licensing for related patented ESTs (China, MISC.5; India, sectoral approach workshop; Brazil, technology workshop);

(c) Mechanisms to strengthen legal and economic institutions to promote the protection and enforcement of IPR, promote competitive and open markets for ESTs, and provide a well-defined, efficient and transparent system of contract enforcement (United States, technology workshop);

(d) Ways to examine the benefits of innovation protection systems and how joint R&D collaboration among developed and developing Parties could instil IPR and bring co-benefits such as endogenous technology development (Canada, MISC.1/Add.2);

(e) Mechanisms to ensure protection of IPR and guarantee access to and use of technologies by avoiding over-protectionism (Ghana, MISC.2/Add.1).

… 126. On the strategy on disbursement of financial resources, Parties proposed:

(a) Developing a technology action plan that define specific policies, actions and funding requirements for all relevant technologies, on public domain, patented and future technologies (G77 and China, MISC.5);

(b) Developing a package of means for implementing for technology, finance and capacity building sectors. Each developing country can define a package suitable for its individual needs (South Africa, technology workshop);

(c) Funding mechanisms following the model of the Montreal Protocol’s Multilateral Fund to ensure the rapid diffusion and absorption of technologies needed for mitigation and adaptation (Micronesia (Federated States of), MISC.1);

(d) Comprehensive incentive mechanisms that can prompt mitigation actions and enable capacity-building; and a technology transfer fund for financing technology transfer to enable easy access to all developing countries regardless of their status in the annexes of the Convention (Turkey, MISC.5);

(e) Establishing joint ventures to accelerate deployment and diffusion of technologies. These will contribute to effectively dealing with IPR issues by sharing these rights among Parties involved (Argentina, MISC. 5).

… 2. Input from observer organizations

129. Observer organizations have also shared ideas and proposals on effective mechanisms for scaling up the development and transfer of technologies under the Convention. These include:

(a) Assessing optimal choice of technology specific to each location and considering possible mechanisms to stimulate innovations with sustanability benefits and deal with risks associated with the new technologies (UNU, MISC.3);

(b) Scaling up technological and financial resources to a sufficient magnitude (CAN) to create a new technology fund to support the deployment of existing technologies, including renewable energy, and capacity-building in the developing world, respecting IPR and promoting technology transfer via market mechanisms such as the CDM (GLOBE);

… 132. On strengthening enabling environments, specific proposals include:

(a) Improving enabling environments for technology diffusion, including enhancing regulatory frameworks, fostering positive environments for investment, and providing incentives for private sector commercialization of clean development technologies and the associated IPR (Australia, MISC. 2/Add.1);

… 138. On tools and concrete approaches, Parties proposed the following:

… (k) Considering new approaches that combine IPR protection and facilitate technological sharing, bearing in mind the example set by decisions in other relevant international forums relating to IPR, such as the Doha Declaration on the TRIPS Agreement and Public Health (Brazil, MISC.5).


Climate Change & MDGs Top Agenda during UN Secretary General’s Visit to WIPO


November 18, 2008


The World Intellectual Property Organization (WIPO) is a unique organization with a unique contribution to make in meeting the global challenges faced by the United Nations (UN) family, UN Secretary General Ban Ki Moon told WIPO staff during his first ever visit to the Organization’s Geneva headquarters on November 18, 2008.

Focusing on the importance of intellectual property in encouraging investment in new technology and in stimulating economic development, the Secretary General commended the work of the Organization and the dedication of its staff. “WIPO can be a champion in helping to meet the Millennium Development Goals; a champion in joining the global efforts to combat climate change; a champion in helping to tackle high food and energy prices,” he said.

In his address to WIPO staff, Mr. Ban Ki Moon shared his thoughts on the mission and mandate of the UN, and on the role of WIPO as a UN specialized agency. The challenges facing the world and the expectations invested in the UN to find solutions were humbling, he said. They included regional conflicts, human rights abuses, abject poverty, countless deaths from HIV/AIDS, tuberculosis, malaria and neglected diseases. The UN had limited resources, and could only succeed in addressing the challenges when all the different organizations within the System worked together. “We have to pool our resources, pool our wisdom, and act as One United Nations,” Mr. Ban told staff. “In this time of economic crisis, this is a practical imperative, as much as a moral one,” he said.

Referring to his discussions that morning with the new WIPO Director General, Mr. Francis Gurry, in which the Chair of the WIPO General Assembly, Ambassador Martin Uhomoibhi, also participated, the Secretary General warmly endorsed the commitment shown by the new WIPO administration to a more intensive engagement in the UN system. He highlighted Mr.Gurry’s determination that WIPO should be actively involved in intellectual property-based initiatives to support the development and diffusion of green technologies. He also underlined the value of the capacity-building assistance provided by WIPO to developing and least developed countries to enable them to benefit from the intellectual property system. Mr. Ban noted that WIPO was unique among UN organizations in generating its own financing for its development activities through the international intellectual property services which it provides to the private sector.

Mr. Gurry, who began a six-year mandate as WIPO Director General on October 1, 2008, has made clear his commitment to closer collaboration with the UN family on global challenges such as reduction of the knowledge gap, sustainable development, climate change, desertification, access to health care, food security and the preservation of biodiversity. The Director General’s proposed Revised Program and Budget, which was published last week for consideration by the Program and Budget Committee in December, places high priority on the effective implementation of the WIPO Development Agenda. The proposed Revised Program and Budget also includes a new strategic-level goal for the Organization on “addressing IP in relation to global policy issues.” WIPO is currently advertising for a new post of Director for Global Challenges, in order to develop policy analysis and practical initiatives in pursuit of this goal.

“Intellectual property policies which are designed to stimulate the development and dissemination of new technologies, have a central role to play in the collective efforts by the international community to find solutions to some of the greatest challenges confronting humanity,” said Mr. Gurry. He added “We need to ensure that WIPO’s voice is heard in all fora where these global public policy issues are discussed, and that we take a leading role in identifying intellectual property-based solutions.”


Climate inaction 'costing lives'

BBC News

September 9, 2008

Failure to take urgent action to curb climate change is effectively violating the human rights of people in the poorest nations, an aid charity warns.

A report by Oxfam International says emissions, primarily from developed countries, are exacerbating flooding, droughts and extreme weather events.

As a result, harvests are failing and people are losing their homes and access to water, the authors observe.

They say human rights need to be at the heart of global climate policies.

Oxfam will be submitting its report, called Climate Wrongs and Human Rights, to the Office of the UN High Commissioner for Human Rights (OHCHR).

Righting wrongs

"Climate change was first seen as a scientific problem, then an economic one," explained report author Kate Raworth. "Now it is becoming a matter of international justice.

The global impacts of climate change meant that nations had to be held accountable for the consequences of their actions, Ms Raworth said.

"Litigation is seldom the best way to solve a dispute.

"That is why we need a strong UN deal in 2009 to cut emissions and support adaption," she added, referring to next year's key UN climate summit where a future global climate strategy is expected to be agreed.

"However, vulnerable countries do need options to protect themselves. Rich country polluters have been fully aware of their culpability for many years."

In its report, Oxfam International said that ensuring basic human rights was essential to lift people out of poverty and injustice.

"Our staff and local partners work with communities in more than 100 countries, and are increasingly witnessing the devastating effects of more frequent and severe climatic events on poor people's prospects for development," it observed.

It highlighted a number of "hot spots" where current climate policies were failing, including: rich nations' failure to cut emissions; funding for adaption initiatives being "woefully under-resourced"; and industrialised countries failing to help poor nations switch to low-carbon technologies.

Twin-track strategy

In April 2007, a working group of the Intergovernmental Panel on Climate Change (IPCC), consisting of hundreds of environmental experts, published a report warning that people living in poverty would be the worst affected by climate change.

Key findings of the report included:

· 75-250 million people across Africa could face water shortages by 2020
· Crop yields could increase by 20% in East and Southeast Asia, but decrease by up to 30% in Central and South Asia
· Agriculture fed by rainfall could drop by 50% in some African countries by 2020
· 20-30% of all plant and animal species would be at increased risk of extinction if temperatures rose between 1.5-2.5C
· Glaciers and snow cover are expected to decline, reducing water availability in countries supplied by melt water

Oxfam has called for a twin approach of mitigation and adaption to ensure human rights formed a central pillar of climate policies.

To reduce emissions, it said nations had to implement national and international targets to minimise the risk of global average temperatures exceeding 2C (3.6F).

And to help least developed nations build resilience to unavoidable impacts, Oxfam said the international community had to target adaptation measures on maintaining people's access to water, shelter and healthcare.


Climate Wrongs and Human Rights

Oxfam Briefing Paper,

September 2008

In failing to tackle climate change with urgency, rich countries are effectively violating the human rights of millions of the world’s poorest people. Continued excessive greenhouse-gas emissions primarily from industrialised nations are – with scientific certainty – creating floods, droughts, hurricanes, sea-level rise, and seasonal unpredictability. The result is failed harvests, disappearing islands, destroyed homes, water scarcity, and deepening health crises, which are undermining millions of peoples’ rights to life, security, food, water, health, shelter, and culture. Such rights violations could never truly be remedied in courts of law. Human-rights principles must be put at the heart of international climate-change policy making now, in order to stop this irreversible damage to humanity’s future.


‘Within an international community based upon the rule of law and universal values of equality, human rights and dignity, it is surely wrong for small, vulnerable communities to suffer because of the actions of other more powerful resource-rich countries, actions over which they have no control, and little or no protection.’ – President Gayoom, Republic of the Maldives1

‘Human rights law is relevant because climate change causes human rights violations. But a human rights lens can also be helpful in approaching and managing climate change.’ – Mary Robinson, President, Realising Rights2

Climate change is set to undermine human rights on a massive scale. International human-rights law states that, ‘In no case may a people be deprived of its own means of subsistence.’ But – as the Inter-governmental Panel on Climate Change (IPCC) has documented in detail – rich countries’ continued excessive greenhouse-gas emissions are depriving millions of people of the very water, soil, and land on which they subsist.

Oxfam International believes that realising human rights is essential to lift people out of poverty and injustice. Our staff and local partners work with communities in over 100 countries, and are increasingly witnessing the devastating effects of more frequent and severe climatic events on poor people’s prospects for development. According to the IPCC, climate change could halve yields from rain-fed crops in parts of Africa as early as 2020, and put 50 million more people worldwide at risk of hunger. Almost half a million people today live on islands that are threatened with extinction by sea-level rise. And up to one billion people could face water shortages in Asia by the 2050s due to melted glaciers. These kinds of impacts, in turn, are likely to lead to mass migration across borders, and increasing conflict over scarce resources.

Rich countries’ emissions are effectively violating the rights of millions of the world’s poorest people. Twenty-three rich countries – including the USA, western Europe, Canada, Australia, and Japan – are home to just 14 per cent of the world’s population, but have produced 60 per cent of the world’s carbon emissions since 1850; and they still produce 40 per cent of annual carbon emisions today. In 1992, these countries committed to return their annual emissions to 1990 levels by 2000. Instead, by 2005 they had allowed their collective emissions to rise more than ten per cent above 1990 levels – with increases exceeding 15 per cent in Canada, Greece, Ireland, New Zealand, Portugal, Spain, and the USA. Their collective failure to act has raised the scientific risk - and the political risk – of global warming exceeding the critical threshold of 2oC.

Economics – which influences many current climate-policy debates – approaches decision-making by weighing up competing costs and benefits. But in a global context, how can the financial costs of cutting emissions in the richest countries be compared with the human costs of climate change for the world’s poorest people? The implications of such a trade-off are appalling. Human-rights principles provide an alternative to the assumption that everything – from carbon to malnutrition – can be priced, compared, and traded. Human rights are a fundamental moral claim each person has to life’s essentials – such as food, water, shelter, and security – no matter how much or how little money or power they have.

When the Universal Declaration of Human Rights was drawn up in 1948, its authors could not have imagined the complex global interconnectedness that climate change would create. Human-rights laws and institutions now need to evolve fast to rise to this unprecedented challenge, if they are to provide a means of stopping human rights worldwide from being further undermined by rich countries’ excessive greenhouse-gas emissions.

Sixty years on from the Universal Declaration, this paper sets out a new vision for a rights-centred approach to climate-change policies. It uses the norms and principles of human rights to guide national and international climate policy making now (Table 1).

…The ongoing climate negotiations – from Bali in 2007 to Copenhagen at the end of 2009 – are the best available chance for achieving the international co-operation needed to prevent dangerous climate change and to enable communities to adapt. That is why human rights must be placed at the heart of their deliberations. Indeed the impacts of climate change on the rights of the world’s most vulnerable people will be the critical test of whether these negotiations succeed. (p.4)

…1 How climate change undermines human rights

…International human-rights law states that, ‘In no case may a people be deprived of its own means of subsistence.’3 Yet, due to excessive greenhouse-gas emissions produced primarily by rich countries, millions of the world’s poorest people’s rights are effectively being violated. They are losing the rainfall, crop land, biodiversity, and seasonal predictability that they subsist on – and that they depend on for their rights to life, security, food, shelter, health, and culture.

The Universal Declaration of Human Rights states that, ‘Everyone is entitled to a social and international order in which the rights and freedoms set forth in this Declaration can be fully realised.’4 Yet, as the world’s scientists have made clear, rich countries’ failure to act with urgency in tackling climate change is leading towards social and international disorder (Table 2).

Sixty years after the Universal Declaration of Human Rights, this paper sets out an approach to designing climate-change policies with human-rights norms and principles at their core, and highlights some hotspots where the current direction of climate policy is dangerously off course.

The international recognition of human rights – from 1948 onwards – has been crucial in establishing universal values. Human rights set in place for every person a fundamental claim to life’s essentials – such as food, water, shelter, and security – no matter how much or how little money or power they have. But there has been slow progress, nationally and internationally, over the past six decades in realising those rights. Millions of people – especially in developing countries – are now highly vulnerable to the coming impacts of climate change. (p.5)

The Right to Life and Security - ‘Everyone has the right to life, liberty and security of person.’ (UDHR, Article 3) (Universal Declaration of Human Rights)

The Right to Food - ‘The State Parties to the present Covenant, recognise the fundamental right of everyone to be free from hunger…’ (ICESCR, Article 11) (International Covenant on Economic, Social and Cultural Rights)

The Right to Subsistence - ‘Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing…’. (UDHR, Article 25) (Universal Declaration of Human Rights); ‘In no case may a people be deprived of its own means of subsistence.’ (ICCPR, Article 1.2 and ICESCR, Article 1.2) (International Covenant on Civil and Political Rights; International Covenant on Economic, Social and Cultural Rights)

The Right to Health - ‘The State Parties to the present Covenant recognise the right of everyone to the enjoyment of the highest attainable standard of physical and mental health.’ (ICESCR, Article 12) (International Covenant on Civil and Political Rights) (p.6)

…2 Putting human rights at the heart of climate-change policy making

…Why look at climate change through the lens of human rights?

First, human rights help to anchor international policy making in the most widely shared set of international norms, and provide clear principles against which to assess current policy proposals.

Second, a human-rights lens focuses attention on the people who are most vulnerable to climate impacts, yet whose voices are often heard least in debates, and insists that safeguarding their basic interests is non-negotiable.

Third, human rights help to start identifying who is responsible for taking action and for bearing the costs of adjustment.

Fourth, only a rights-centred approach captures the magnitude of injustice brought about by climate change, and acts as a moral spur to action.

This motivation to tackle climate change because of human rights is reinforced by both economic and security interests.16 But economic incentives and enlightened self-interest alone will not ensure that the international community addresses climate change in a way that respects and protects the rights of the world’s poorest people. This is why it is essential to put human rights at the centre of climate-change policy making now. (p.8)

…Litigate or negotiate?

‘Climate change shows up countless weaknesses in our current institutional architecture, including its human rights mechanisms.’
– Mary Robinson, President, Realising Rights

Human-rights litigation demands evidence that an injury has been caused to the rights of identifiable people, by an identifiable actor – in a court that recognises them both – as well as evidence that the injury could be redressed. That’s a particularly tough challenge for people whose rights are being undermined by excessive emissions from diverse countries and companies, and for whom more severe weather events are already unavoidable, but yet to come.19

Worse still, there is no obvious venue where cases that address international impacts can be brought. Even when rich countries have signed up to binding regional human-rights instruments (as in the Americas and Europe), they still cannot be sued by people living outside of the region. So where can people from sub-Saharan Africa, South Asia, or the Pacific go to make the case for their rights against the world’s richest countries?

Human-rights laws and institutions must evolve fast to rise to the unprecedented international challenge that climate change creates. Creative human-rights lawyers could push to have courts recognise future injury (because of the delay between emissions and climatic events), and joint liability (since emissions come from multiple sources) in such cases. They could likewise seek to clarify and activate international legal obligations (due to the far-reaching international impacts of greenhouse-gas emissions), and call for an international venue (perhaps under the UNFCCC) where people whose rights are effectively being violated by other countries’ emissions can seek some form of redress.

In parallel to this much-needed legal innovation, however, the norms and principles of human rights can and must be used now to guide policy making, both in international negotiations and in national policy processes. (pp. 9-10)

What do these human-rights principles imply for states’ responsibilities – nationally and internationally – in tackling climate change? There are three specific implications:

1. Mitigation – reducing greenhouse-gas emissions – is critical for respecting and protecting people’s rights from being violated by climate change.

2. Adaptation and disaster relief are now owed as remedies to people whose rights are being, or will be, violated by climate-change impacts.

3. Both national and international action are essential to respect and protect rights in the face of climate change.

…These responsibilities are reflected in the UNFCCC’s principle of tackling climate change ‘in accordance with their common but differentiated responsibilities and respective capabilities’.22 If emissions from developing countries – such as Brazil, China, Singapore, and South Africa and others – continue to grow unchecked, then their international responsibility will likewise grow.23 (pp. 11-12)

…Human-rights hotspots on mitigation

On the basis of these principles, where are mitigation policies far off track for delivering on rights? Three hotspots are highlighted.

1. Rich countries must lead by setting emissions targets and policies that safeguard the rights of the most vulnerable people.

…2. Rich countries must deliver the finance and technology needed for poor countries to realise rights on a low-carbon pathway.

Private finance will be crucial for this, but so too is public finance to achieve investment on the scale needed. Public finance is needed for: research and development for trialling new technologies; guarantees to leverage private investment; building local capacity to develop, adapt, and maintain technology; and licensing fees in cases where intellectual property rights act as a barrier to technology transfer. (pp. 13-14)

…Voluntarism is clearly failing to generate funding on the scale required. Innovative and mandatory mechanisms for raising finance for technology are urgently needed, such as levies on carbon taxes, cap-and-trade schemes, or other carbon-cutting market mechanisms.

3. Rich countries must halt biofuel policies that undermine poor people’s rights to food, land, and decent work.

The UN Special Rapporteur on the Right to Food states that, ‘Governments must recognize their extra-territorial obligations towards the right to food. They should refrain from implementing any policies or programs that might have negative effects on the right to food of people living outside their territories’.40 Rich-country policies, especially in the the USA and EU, are breaching this obligation. Their biofuel targets are creating a ‘scramble to supply’ in the developing world, forcing up food prices, while undermining labour rights and land rights. (p.15)

The UN Declaration on the Rights of Indigenous Peoples states that relocation of indigenous people must not take place ‘without their free, prior and informed consent’, nor before ‘agreement on just and fair compensation’.45 Yet these principles are, in practice, the exception rather than the rule for communities whose land rights are often undermined by companies and local officials who view consent and compensation as unnecessary administration, rather than human rights. (p.16)

…Human-rights hotspots on adaptation

‘No community with a sense of justice, compassion or respect for basic human rights should accept the current pattern of adaptation’.48
– Desmond Tutu, Archbishop Emeritus of Cape Town

Three hotspots on adaptation policies are highlighted here for urgent action.

1. All governments must ensure that national adaptation focuses on those people whose rights are most at risk.

Social-protection schemes can guarantee rights in the face of climate change. Temporary shocks – such as droughts or floods – often lead to a spiral of destitution…Social-protection schemes providing food, livestock, or cash can break this cycle and safeguard poor people’s right to subsistence, whatever shocks they face.

…2. Rich countries must urgently deliver international adaptation finance.

Since rich countries’ excessive emissions have put poor people’s rights at risk in developing countries, human-rights norms create a strong obligation for them to provide a remedy by financing adaptation. This is recognised and reinforced in the UN climate convention: ‘The developed country Parties…shall also assist the developing country Parties that are particularly vulnerable to the adverse effects of climate change in meeting costs of adaptation to those adverse effects.’53 To date, however, they are seriously failing to deliver.

…3. Developing-country governments must have ownership in governing international adaptation funds.

Since adaptation finance is owed to safeguard the rights of communities facing climate impacts, their governments must have ownership in managing international adaptation funds and, in turn, must be accountable to those communities when spending the finance.

Developing countries have rightly secured strong representation in governing the UNFCCC’s Adaptation Fund, constituting the majority of the 16-member board… (pp. 17-21)

…5 The private sector: what role on rights and climate change?

Human-rights obligations fall primarily on states, and part of every state’s responsibility is to protect people’s rights by regulating private-sector activity. At the same time, all companies have an obligation to ensure that their activities do not undermine human rights. This requires them to monitor and report on the impacts of their operations, and to take all necessary steps to avoid negative impacts. Leading companies are going further, promoting the fulfilment of rights through their corporate operations. 60

Private-sector hotspots on human rights

Two hotspots for action are highlighted here.

1. Companies must go much further in promoting urgent action on climate change.

…2. Companies can go much further in supporting community resilience through their own supply chains.

… • Agriculture: Collaborate in supply-chain resilience.

…• Water: Address core operations.

…• Insurance: Provide micro-products to reduce vulnerability. (pp. 18-25)


3 International Covenant on Civil and Political Rights (ICCPR), Article 1.2, and International Covenant on Economic, Social and Cultural Rights (ICESCR), Article 1.2.
4 Universal Declaration of Human Rights, Article 28.
16 N. Stern (2008) ‘Key elements of a global deal on climate change’, London: London School of Economics, available at: (last checked by author 15 July 2008).
19 ICHRP (2008), op.cit.
22 UNFCCC (1992) Article 3.1.
23 EcoEquity, Christian Aid, SEI, and Heinrich Böll (2007) ‘The right to development in a climate constrained world: the Greenhouse Development Rights Framework’, Berlin: Heinrich Böll Foundation.
40 UN Commission on Human Rights (2005) ‘The right to food: report of the Special Rapporteur on the Right to Food’, Geneva: UNCHR, available at: (last checked by author 28 July 2008).
45 UN Declaration of the Rights of Indigenous Peoples, Article 10, available at: (last checked by author 15 July 2008).
48 UNDP (2007) ‘Human Development Report 2007’, New York: UNDP.
53 UNFCCC (1992) Article 4.4.
60 J. Ruggie (2007) ‘Business and human rights: mapping international standards of responsibility and accountability for corporate acts’, report of the Special Representative of the Secretary-General on the issue of human rights and transnational corporations and other business enterprises, UN Human Rights Council A/HRC/4/035.


Undermining Mitigation Technology: Compulsory Licensing, Patents and Tariffs

By Tim Wilson

Institute of Public Affairs

IPA Backgrounder 21/1, (August 2008)

The Australian APEC Study Center/Monash University

Compulsory licensing and CO2 mitigation technology

Opponents of IP rights have used compulsory licensing of medicines as a vehicle to undermine IP regimes. They have used their attack on pharamaceutical patents to push back against the obligations WTO members signed up to under the TRIPS Agreement. They are now using CO2 mitigation technology as their next battleground to broaden the definition of the applicability of compulsory licenses.

To do so, they are advocating for amendments to the TRIPS Agreement and for compulsory licensing to be included in the next agreement from the United Nations Framework Convention on Climate Change (UNFCCC) and further amendments to the TRIPS Agreement for CO2 mitigation technology.

Their argument for the inclusion of compulsory licensing in the UNFCCC process is essentially the same as those used for medicines. According to them patents awarded to CO2 mitigation technologies increase the price of technologies beyond the means of developing countries. By increasing the price, technological diffusion of essential technologies is being inhibited. As a result, developing countries are unable to access the technologies that would otherwise reduce their emissions in order to avert human- caused climate change.

Advocates are using the debate surrounding TRIPS and public health as a precedent. At a speech to a meeting of the Environment Ministers in the Framework of G-8 + 5 Presidency, the Indian Minister of Environment and Forest, Shri A. Raja, argued that ‘an agreement is needed on intellectual property rights on technological efforts in developing countries paralleling the successful agreement on compulsory licensing of pharmaceuticals’.4 Similar sentiments were voiced by the Indian Prime Minister, as well as other developing countries in the lead up to the 2007 G-8 Summit. The governments of Brazil, China, India, Mexico and South Africa released a Joint Position Paper which included a request from the countries to the G8 Summit to consider ‘an agreement on transfer of technologies at affordable costs for accelerated mitigation efforts’.5

In press reports leading up to the Summit, there were also calls for ‘an agreement on ... IPRS on technological efforts in developing countries paralleling the successful agreement on compulsory licensing of pharmaceuticals’.6 However, developing countries are not alone. In late November last year, the European Parliament passed a French Green MP’s motion relating to efforts on trade and climate change. The motion called for a ‘study on possible amendments to the WTO Agreement on Trade Related Aspects of Intellectual Property Rights in order to allow for the compulsory licensing of environmentally necessary technologies’.7 While the motion also called for any amendments to be ‘within the framework of clear and stringent rules for the protection of intellectual property’, the intention of the motion is clear.

International NGO, Friends of the Earth, has also called for the removal of IP on CO2 mitigation technologies. While not calling specifically for compulsory licensing, Friends of the Earth has advocated ‘amend(ing) TRIPs…so that developing countries can exclude from patentability green technologies’.8 The effect would be similar. The UNFCCC Bali Summit in December 2007 became the launching pad for developing countries to campaign for compulsory licensing in the UNFCCC process. In a high-level official side-event on the second-last day of the conference, the Nigerian Environment Minister, Halima Tayo Alao, spoke out against IP as a ‘barrier’ for developing countries to access carbon dioxide mitigation technologies.

It appears the campaign against IP on CO2 mitigation technology is gaining traction.
During the UNFCCC Summit there was an informal meeting of Trade Ministers discussing the relationship between climate change and trade policy. At a side-event on the Monday following the informal meeting Indonesian Trade Minister, Mari Pangestu, commented that Trade Ministers discussed using TRIPS flexibilities on CO2 mitigation technology. The most relevant TRIPS flexibility mechanism for accessing CO2 mitigation technology is compulsory licensing. The UN is also undermining incentives to develop new mitigation technologies.
At another side-event the UN Department of Economic and Social Affairs released a paper arguing for ‘tiered pricing’.9 Tiered pricing is currently used by pharmaceutical companies to introduce different prices in different markets, dependent on the capacity of consumers to pay. For tiered pricing to work successfully limitations must be placed on the import of patented products to ensure that parallel importation of cheaper products into wealthier countries does not occur. Doing so undermines the pricing structure of the patent holder and removes incentives to provide cheaper products to poorer consumers.

Undermining IP on CO2 mitigation technologies would cause irreparable damage to the development of technologies necessary to reduce emissions. The green technology industry has been compared in terms of its infancy to the semiconductor industry 35 years ago or the biotechnology industry 25 years ago.10 Research and development into CO2 mitigation technology requires significant, long-term, up front financial commitments. Such commitments will only come with a guarantee of property rights on the end product and a commercial market for its output. (pp. 5-6)


Climate Change, Technology Transfer and Intellectual Property Rights

By the International Centre for Trade and Sustainable Development (ICTSD), Switzerland

August 2008

Enhanced action on technology development and transfer will also be central in enabling the full,
effective and sustained implementation of the UNFCCC beyond 2012, as recognized in the Bali Action Plan.

The Bali Action Plan launched “a comprehensive process to enable the full, effective and sustained implementation of the Convention through long-term cooperative action,” by addressing, inter alia:

“(d) Enhanced action on technology development and transfer to support action on mitigation and adaptation, including, inter alia, consideration of:

(i) Effective mechanisms and enhanced means for the removal of obstacles to, and provision of financial and other incentives for, scaling up of the development and transfer of technology to developing country Parties in order to promote access to affordable environmentally sound technologies;

(ii) Ways to accelerate deployment, diffusion and transfer of affordable environmentally sound technologies;

(iii) Cooperation on research and development of current, new and innovative technology, including win-win solutions;

(iv) The effectiveness of mechanisms and tools for technology cooperation in specific sectors;”

The use of existing TRIPS flexibilities to promote the transfer of climate-related technologies should be explored in full.

Possible measures related to IP and other incentive schemes to promote transfer of technology
within the climate regime should also be explored. Possibilities range from the inclusion of IP-related issues in indicators of technology transfer to the development of specific mechanisms—some already used in other public policy areas, such as health or education— to enhance the technology transfer component of the post-Kyoto climate regime.

(p. iv)

…Technology transfer: Role and potential impact of intellectual property rights

There is no single definition for “transfer of technology.” In general, however, “transfer of technology” can be defined as the transfer of systematic knowledge for the manufacture of a product, for the application of a process, or for the rendering of a service (Draft International Code on the Transfers of Technology, 1985).

The transfer of a technology is thus not exhausted in the transmission of the hardware, but also requires facilitating access to related technical and commercial information and the human skills needed to properly understand it and effectively use it. In this regard, a critical aspect of the technology transfer process is the development of the domestic capacities to absorb and master the received knowledge, innovate on that knowledge, and commercialize the results.

In the complex process of transfer of technology, the role of IP protection—despite being only one of many influential factors—has proven particularly contentious. Indeed, IP is potentially both an incentive and an obstacle the transfer of technology. IP rights were conceived as private rights to reward innovation and promote the dissemination of knowledge in the context of broader societal goals. By offering protection against a loss of control of information in technology-related transactions, IP is thus—in part—an instrument aimed at facilitating the transfer of technology. Studies have shown that such a positive impact does exist, including by establishing a link between stronger patent rights and productivity, trade flows, foreign direct investment and the sophistication of the technologies transferred (Maskus, 2003).

On other hand, the existence of IP protection does not guarantee or suffice for effective transfer of technology. IP rights need to be buttressed by appropriate infrastructures, governance and competition systems in order to be effective (Maskus et al., 2003). Moreover, there may be circumstances in which IP rights are not incentives at all (Foray, 2008). The market power provided by patents and other IP rights over certain technologies—by allowing owners to limit the availability, use, or development of a process or product—may also result in prices that exceed the socially optimal level and hamper the transfer of these technologies (Hoekman et al., 2004).

Given the tension between IP protection and the transfer of technology, a “balancing act” is necessary to ensure international IP rules advance broader public policy objectives (Maskus, 2003). Such balance is considered to be particularly important in the context of the TRIPS Agreement, which establishes the most comprehensive minimum standards of IP protection, both in terms of covered areas and their applicability to all Members of the WTO. The TRIPS Agreement (Article 7) states that the objective of the protection and enforcement of IP should be to contribute “to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare...” Article 8 also recognizes that measures “may be needed to prevent the abuse of intellectual property rights by right holders or the resort to practices which … adversely affect the international transfer of technology.”

Despite such language, concerns remain as to whether the TRIPS Agreement does achieve a balance between IP protection and the transfer of technology. Moreover, there is still no broad understanding in IP-related discussions at the WTO on the types of additional national and international policies needed to promote the transfer of technology. Article 66.2 of the TRIPS Agreement requires developed country WTO Members to “provide incentives to enterprises and institutions in their territories for the purpose of promoting and encouraging technology transfer to least-developed country Members.” There are growing concerns, however, that such a mechanism is inadequate to promote effective transfer of technology in least-developed countries. An analysis of reports on the measures taken to date, for example, found several shortcomings, including in the types and areas of incentives chosen (Foray, 2008). As a result, it is still unclear to which degree transfer of technology takes place under the TRIPS Agreement, and what specific measures might be taken to encourage such flows of technology.

In the context of the UNFCCC, determining or addressing the role of IP rights in the transfer of climate-related technologies—although it has not been the focus of most related discussions—is not proving any easier. The UNFCCC and the Kyoto Protocol, like most MEAs, contain specific commitments on technology transfer. Article 4.5 of the UNFCCC urges developed country Parties, for example, to take all practicable steps to promote, facilitate and finance the transfer of, or access to, environmentally sound technologies and know-how, particularly to developing countries. Article 10 of the Kyoto Protocol, among others, reaffirms these commitments. Under Article 4.3 of the UNFCCC, moreover, developed country Parties are required to provide the financial resources needed by the developing country Parties to meet the agreed full incremental costs of implementing their obligations, including for the related transfer of technology. Indeed, the effective implementation by developed country Parties of their commitments on transfer of technology is inherently linked to the extent to which developing country Parties are required to implement their own commitments. As in other contexts, however, the difficulty of realizing the goals and complying with the obligations of transfer of technology in the climate change context highlights the importance of moving beyond language to concrete consideration of the problems and the potential solutions.

For example, in the UNFCCC context, the challenge of technology transfer really presents two related but different challenges. Technology is needed in least-developed and small developing countries as an engine of development, and the challenge is to ensure that it does indeed come, and that what comes does not contribute unduly to global climate change. As well, technology is needed in the fast-growing developing economies to help blunt the impact of growth on global climate change. The substantial energy infrastructure being put in place in those countries will, after all, be locked in for generations to come. Of course there is no bright line separating these categories of countries, but to the extent that their situations differ, so do the needs and dynamics of each with respect to climate-related technology needs.

The exact role of IP in the transfer of climate-related technologies remains unclear, however. IP is not mentioned expressly in UNFCCC or Kyoto Protocol provisions on transfer of technology. It has, however, been raised in the discussions of the Expert Group on Technology Transfer, for example, as both an element of and a potential obstacle to an “enabling environment” for transfer of technology—the establishment of the institutions, regulations and policies needed to promote technology transfer. In a report by UNFCCC (2006) that identified common needs for and barriers to environmentally sound technologies in developing countries, IP-related issues did not feature prominently within a broad range of economic and market barriers to the transfer of technology. Although no comprehensive study has been conducted on the potential impact of IP rights in the different categories of climate-related technologies, initial research found that the impact of patents on access to solar, wind and biofuel technologies in developing countries might not be significant (Barton, 2007). On the other hand, studies by the European Patent Office (2007) have noted the increasing number and scope of patent claims in wind energy and biofuels technologies. The precise implications of these patent trends for the transfer of technology in these industry sectors remain uncertain.

Nevertheless, there are already significant calls to address the potential adverse effects of IP on the transfer of climate-related technology. On the eve of the Bali conference, for example, the European Parliament adopted a resolution, which stated that an ambitious post-Kyoto agreement might require “corresponding adjustments” to be made to other international agreements, including on IP.4 In discussions on the Bali Action Plan, moreover, several developing countries have stated as their position that IP is one of the various obstacles that must be addressed in a systemic and cross-cutting manner to promote the transfer of technology. In the initial round of talks in 2008, Cuba, India, Tanzania, Indonesia, China and others stressed the need to address IP within technology discussions, while some developed countries including Australia and the U.S., affirmed their belief that IP was not a barrier, but a catalyst for technology transfer.5

As discussions on the Bali Action Plan continue, more research and analysis on the relationship between IP and the transfer of climate-related technologies will be useful in bridging these gaps. In addition, it will be helpful to increase the awareness and understanding of the types of measures that exist or could be taken—within and beyond international IP rules—to enhance the role of IP rights and other incentive schemes in promoting technology transfer. Measures within the international IP system will be looked at below.

Promoting the transfer of climate-related technology in the TRIPS Agreement

A central aspect of the TRIPS Agreement is that it not only establishes minimum standards of IP protection, but also incorporates certain flexibility, allowing countries to position IP rights in the context of their public policy objectives and priorities. For example, the TRIPS Agreement allows for certain limitations and exceptions to the protection of IP rights and for national determination of the appropriate method of implementation. These provisions are known as “TRIPS flexibilities” and have been found to provide critical policy space in areas ranging from biodiversity and agriculture to public health and education.

The issue of TRIPS flexibilities came to the forefront of international discussions in the context of public health policies. These discussions led to the adoption of the Doha Declaration on the TRIPS Agreement and Public Health, as well as an amendment to the Agreement to address the difficulties that WTO Members with insufficient or no manufacturing capacities in the pharmaceutical sector could face in making effective use of some of the TRIPS flexibilities. Though parallels with other public policy areas must be taken forth with care, the experience with the issue of public health has become a reference point for the discussion of TRIPS flexibilities, including in the context of the transfer of climate-related technologies.

This note thus draws repeatedly on this experience, without aiming to advocate a similitude between the problems and the potential solutions in the two areas.

The issue of TRIPS flexibilities has already come up in ongoing discussions at the UNFCCC, where some Parties expressed their concern that these flexibilities may be insufficient to ensure a rapid and widespread transfer of technology. Nevertheless, it is useful to begin by looking at the types of provisions that are available for WTO Members, and could be useful in relation to climate-related technology transfer. For example, several provisions on patents—the exclusive rights granted for an invention—are deemed pertinent to enhancing the transfer of technology to developing countries. These provisions include:

Exemptions to patentability. Patentability refers to the boundaries established in relation to what inventions—generally, products or processes that offer a new technical solution to a problem— may be patented. Prior to the TRIPS Agreement, countries could exclude inventions of certain types or in certain areas of technology such as pharmaceutical products and agricultural methods from patentability, based on their development priorities and strategies. Article 27.1 of the TRIPS Agreement now requires WTO Members to grant patents to all types of inventions in all fields of technology, as long as these inventions meet certain basic criteria. However, because the TRIPS Agreement does not define the patentability criteria (namely novelty, inventive step and industrial applicability), some critical policy space remains in relation to the scope of patentability in each country. The loose definition of these criteria has raised concerns given the resulting all-encompassing patents. For example, patent claims on synthetic biology products and processes among the most promising technologies for cellulosic biofuels are so broad that scientists worry it could bring the discipline to a stand-still (Suppan, 2008). Defining the patentability criteria to adequately limit the scope of patents, on the other hand,would have a positive impact on further innovation by limiting the possibility of conflict with existing patents. In addition, in some contexts, it would also enhance the transfer of technology. Low-income countries in which market-based channels of technology transfer, such as investment and licensing, are not effective could safeguard other pathways to access some climate-related technologies, such as reverse engineering.

Exceptions to patent rights. The TRIPS Agreement recognizes that the rights of a patent owner to prevent third parties from exploiting the patented product are not absolute. Indeed, Article 30 states that WTO Members may provide “limited exceptions” to these rights. That is, countries may—under certain circumstances—automatically allow the use of the patented invention by a third party without consent of the patent holder. The TRIPS Agreement does not define these circumstances, which will be linked to national policies and objectives. For example, a common exception addresses experimental use, allowing the use of patented inventions for research or experimental purposes by parties other than the patent owner. This type of exception will be relevant in the climate change context, where adaptation of the technology to local needs and environments will be particularly vital. It would also allow companies in developing countries to “invent around” patent claims to gain access to environmentally sound technologies, which has proved important in the context of the implementation of other MEAs.

Compulsory licences. There are also other cases in which the TRIPS Agreement allows the use of a patented product or process without authorization of the rights holder. One of the most important— and perhaps most controversial—is the granting of compulsory licences. These non-voluntary licences are granted by an administrative or judicial authority to a third party, allowing the exploitation of the patented invention without consent of the patent owner.6 Developing country Members consider this possibility as essential to ensuring that they can implement the TRIPS Agreement in a way that responds to broader public policies.

Article 31 of the TRIPS Agreement, which deals with compulsory licences, does not define the grounds on which countries may allow non-voluntary licences, although a number of conditions and procedural steps are required. Climate mitigation or adaptation could provide valid ground for compulsory licensing, and could even be considered to be included in general references to “public interest” in most patent laws. Some countries also foresee compulsory licences in cases in which the invention is not exploited in the country, or is insufficiently exploited. Such a measure could restrain some of the anti-competitive practices feared as potentially impeding the transfer of climate-related technologies to developing countries. It is interesting to note that the issuing of compulsory licences in certain situations, including cases of national emergency, other circumstances of extreme urgency or public non-commercial use, is less arduous.7 These compulsory licences could thus prove an effective tool to ensure rapid access to critical climate-related technologies in developing countries.

Beyond patent provisions, there are several other TRIPS flexibilities that may be pertinent in the context of the transfer of climate-related technologies. For example, Article 40 addresses competition policy, focusing on licensing practices that restrain competition and may impede the transfer of technology. As noted above, one of the concerns is that the market power provided by IP rights will result in restrictive practices that limit access to climate-related technologies. As a result, it is important to note that, under the TRIPS Agreement, WTO Members may adopt appropriate measures to prevent or control such practices. Another notable provision is Article 66.1, which recognizes the special needs and requirements of least-developed country Members and awards a special transition period for the implementation of the TRIPS Agreement.

During this transition period, which is currently set to expire on 1 July 2013, these countries have available a range of channels for transfer of technology including, for example, imitation and reverse engineering.8 These channels allow immediate and free access to some knowledge and facilitate the building of productive capacities, which is particularly important in conditions in which other channels of technology transfer, such as foreign direct investment and licensing, are not effective (Maskus, 2003).

From this overview, it is clear that the potential contribution of TRIPS flexibilities to climate-related technology transfer is significant. Indeed, there is no evidence to date that these flexibilities will not be sufficient to allow international IP rules to support the rapid and widespread transfer of technologies needed for climate change mitigation and adaptation. Moreover, the use of these flexibilities for climate change has not yet been challenged. Increasing public attention and concerns on the relationship between IP and the transfer of climate-related technologies, however, have resulted in calls for such measures and adjustments to the TRIPS Agreements to support the post-Kyoto climate regime. In his speech to the UNFCCC Conference of the Parties in Bali, the Brazilian Foreign Minister proposed that a statement similar to the Doha Declaration on the TRIPS Agreement and Public Health should be considered in the climate change context. The European Parliament, for its part, has recommended launching a study on amendments to the TRIPS Agreement required to allow for the compulsory licensing of environmentally necessary technologies.

Proponents consider that these changes could establish and consolidate policy space that is important for a successful technology component in a post-Kyoto climate change regime. Explicitly incorporating climate protection as a grounds for compulsory licensing, or establishing a specific, streamlined procedure for issuing compulsory licences for technologies needed for climate change mitigation and adaptation would both be helpful in this regard. Other suggested modifications include limiting the patentability of climate-related inventions and shortening their length of protection (Third World Network, 2008).

However, it is important to keep in mind the difficulties and vast political cost of modifications to the TRIPS Agreement, which became clear in the IP and public health debate. In addition, given the ongoing promotion of an agenda of higher levels and enhanced enforcement of IP protection, the risk of “opening” the TRIPS Agreement should not be taken lightly. Finally, on an issue as complex as climate-related technologies, it is questionable whether effective solutions could be achieved in the Council for TRIPS, a forum with a specific and limited approach. A similar situation arose in relation to IP and public health, which is now being addressed—in many opinions, more effectively and comprehensively —in the context of the World Health Organization. As a result, it is important to define the role of the UNFCCC and the climate regime itself in addressing the relationship between IP and climate-related technologies.

Intellectual property and the transfer of technology in the post-2012 climate regime

The scope of the Bali Action Plan would allow the consideration of a number of measures related to IP and other innovation and access to knowledge schemes in the context of a post-2012 climate regime—measures that may prove more feasible and effective than those sought in the context of the TRIPS Agreement. Although a detailed analysis of these potential measures is beyond the scope of this paper, it is nevertheless relevant to briefly mention the possibilities available in the context of ongoing UNFCCC negotiations.

Some are already being discussed, including financial mechanisms to address the link between IP and the transfer of technology and guidelines on IP protection for publicly-funded technologies. Other emerging topics include prizes as incentives to climate-related innovation, and institutional arrangements for open or collaborative innovation.

Financial mechanisms are considered an important approach to addressing the issue of IP and transfer of technology. A “Multilateral Technology Acquisition Fund,” for example, has been proposed as a way to fund the transfer of technologies to developing countries through, inter alia, the buying-out of IP rights.9 Given the relative success of the Multilateral Fund for the Implementation of the Montreal Protocol, such a proposal is actively being considered in the negotiations. Nevertheless, Anderson et al. (2007) note that, under the Montreal Protocol, “IP rights did not constitute as large a barrier to technology transfer as was feared.” Moreover, it is unclear that the case-by-case approach used in ozone-related technologies would work in the climate change context, given the greater range of relevant technologies and potential patent challenges.10

Implications of public financing for the IP rights available over climate-related technologies has also been raised in the UNFCCC context, albeit not in recent negotiations. Government financing of research and development—significant in most environmentally sound technologies—particularly benefits climate-related technologies. Nevertheless, such financing currently has few implications for the mode of ownership, commercialization or transfer of these technologies, which are usually protected by IP rights (UNCTAD, 1998). As a result these technologies, though stemming from publicly-funded R&D, are not necessarily publicly available. A series of guidelines might guide public entities to retain some influence on the use and commercialization of publicly-financed climate-related technologies, and could be considered in the post-Kyoto climate regime.

. . . . . . . . . . . .
4 European Parliament resolution of 29 November 2007 on trade and climate change (2007/2003(INI)).
5 The first meetings of the Ad Hoc Working Group on Further Commitments for Annex I Parties under the Kyoto Protocol and the Ad Hoc Working Group on Long-term Cooperative Action under the Convention were held in Bangkok in April 2008.
6 The process does have a number of safeguards under Article 31 of the TRIPS Agreement, of course, including the requirements that the proposed user should have made good faith efforts to obtain authorization from the patent holder, the use will be for domestic supply only, the patent holder shall be granted “adequate” remuneration, there be an established review process and so on.
7 In these cases, the requirements are waived for efforts to obtain authorization from the right holder on reasonable commercial terms and within a reasonable period of time.8 In addition, in 2002,WTO Members approved a decision extending until 2016 the transition period during which LDCs do not have to provide IP protection for pharmaceutical products.
9 See, for example, the statement of the African Group in COP-12 of the UNFCCC.
10 In addition, it should be noted that in the case of ozone depleting substances, alternative technologies to specifically and effectively address the problem had been identified and were available, which is not the case in the climate change context.

(pp. 2-8)


Developing countries call for new technology transfer mechanism

By Meena Raman

TWN Bonn News Update 4


June 6, 2008

Bonn 5 June (Meena Raman) --Major developing countries have called for the creation an international mechanism under the UN Convention on Climate Change aimed at operationalising the transfer technology to developing countries and also assist them in adapting or developing technologies of their own to address climate change.

Concrete proposals were presented among others by China, Brazil, Ghana, India, Pakistan and Bangladesh (on behalf of LDCs) on barriers to technology transfer and the measures and institutional mechanisms for overcoming these, at a roundtable discussion at a meeting of the UNFCCC held in Bonn on 3 June.

The countries were addressing the issue of how best to accelerate, deploy, diffuse and transfer affordable environmentally sound technologies from developed to developing countries to address the challenge of climate change. Technology transfer is one of the two main commitments that developed countries have made to developing countries under the UNFCCC, as well as the Bali Action Plan, the other being transfer of financial resources.

While most of the developing countries highlighted the need to address the effects of intellectual property on access to technology, and the need for government and international actions, major developed countries instead stressed the importance of IPRs and asked developing countries to create a favourable environment to attract the private sector to invest and transfer technology. The US saw IPRs as strengthening access to technology instead of a barrier.

Parties at the Ad Hoc Working Group on Long-term Cooperative Action (AWGLCA) were exchanging views at the workshop to consider effective mechanisms and enhanced means for the removal of obstacles to, and provision of financial and other incentives for scaling up of the development and transfer of technology to developing country parties.

According to the note by Chair of the AWGLCA, Luiz Machado of Brazil, the objective of the workshop was to deepen understanding and clarify elements contained in the Bali Action Plan. The interactive exchange is to contribute to the emergence of a common understanding of what needs to be negotiated in order to reach an agreed outcome.

China proposed an innovative international mechanism for the development and transfer of environmentally sound technologies (ESTs). The mechanism would comprise an institutional arrangement, an innovative financial mechanism, and performance assessment and monitoring.

It said that ESTs may only be effective when they work as a whole package which include hardware (devices, equipment, process and complementary technological system etc); software (awareness, knowledge, information, know, intellectual property rights, designs etc); human resources; financial resources to make development, diffusion and transfer to happen and an enabling environment (regulatory framework by both developed and developing countries, appropriate institutional arrangement and infrastructure).

An innovative mechanism is needed to implement the technology transfer obligations under the Convention as well as the Bali Action Plan, as little progress has been made on this issue. The barriers to technology transfer need to be overcome, as ESTs play a crucial role. The development, diffusion and transfer of ESTs need to be speeded up to meet the challenge of climate change, said China.

It proposed that an intergovernmental body under the UNFCCC should be set up which would be implementation oriented and operational in focus. It would provide guidance, advice and recommendations; coordinate actions by different international stakeholders as well as governments; guide and supervise the utilization of a special technology transfer fund which would be based on public finance; promote communication and information and knowledge sharing; and which would monitor and assess the performance and progress of technology transfer.

It proposed that the intergovernmental body under the UNFCCC could be a Subsidiary Body on the Development, Diffusion and Transfer of ESTs. Under this body would be a Strategic Planning Committee which would relate to a number of panels, including a technology needs assessment and information panel, intellectual property rights coordination panel, enabling policy panel, financial panel, capacity building panel, and monitoring and assessment panel.

It said that priority should be on policy dialogue, coordination for better incentives to the private sector and markets, financing basic research and development, and direct transfer and diffusion of publicly owned technologies

China proposed the establishment of a Multilateral Technology Acquisition Fund (MFTA) for climate technologies. It said that the fund could be based on a public private partnership framework for financing of the development, diffusion and transfer of ESTs by linking public and private sector finance. A significant amount of public finance from developed countries should play a leading role in guiding and attracting private financial resources, it said.

Public finance from developed countries can be sourced from research and development budgets, revenue from energy and environmental taxes and revenue from auction of carbon credits.

Among the incentives for the private sector, China proposed policy instruments such as tax exemptions for EST exports of companies in developed countries; subsidies to encourage research and development and transfer of ESTs; favourable conditions for EST-related export credits, subsidies etc. It also said that there should be removal of technology export bans and other regulations, policies and measures. Venture capital might be a typical form for private investment in ESTs.

China also proposed a system of performance assessment and monitoring on the speed of technology flows (to avoid lock-in effects of technology choices now being made in developing countries, and the needed time for innovation, research and development and diffusion of technologies) and the range of technology flows (which should cover most of the meaningful sectors with larger market share and penetration). It should also cover the effectiveness in terms of emission reductions, access to affordable and least cost technologies, and expected benefits.

Brazil also called for a “coherent and comprehensive instrument” for technology development and transfer, under the UNFCCC. This could be a Technology Protocol or other approaches.

Giving the rationale for this proposal, Brazil said there was a need for a technology revolution, given the urgent challenges faced by developing countries due to climate change. Given the extraordinary challenges, it said that it is important to act clearly beyond the “business as usual scenario” and that there is need for a “beyond the box” approaches.

Brazil spoke about existing technologies that are not under patents and that are patented, and about new technologies which need to be developed. It said it was necessary to identify and assess existing technologies to support action on mitigation and adaptation.

Multilateral funding to disseminate existing technologies, including those where the patents have expired, is needed. It called for the promotion of capacity building and dissemination of know how to adapt, use and develop technologies, experience and equipments for mitigating and adaptating to climate change.

As regards patented technologies, Brazil proposed a public multilateral fund for purchasing licences with a view to facilitate transfer. It stressed the need for the consideration of criteria for compulsory licensing considering the climate change situation, bearing in mind the example set by decisions in other relevant international fora related to intellectual property rights, such as the Doha Declaration on the TRIPS Agreement and Public Health.

It also called for the consideration of incentives to stimulate technology transfer within companies, with a view to strengthening capacity in subsidiary companies located in developing countries.

In relation to new technologies, Brazil said there was a need to foster the establishment of national and regional technology excellence centres to promote technology development, deployment and transfer, stimulate capacity building, improve access to information and establish an appropriate international cooperation environment. It suggested a venture capital fund based on a public/private partnership for development of breakthrough technologies in developing countries. It also stressed the need for north-south, south-south and triangular cooperation, including joint research and development.

Brazil concluded by proposing a coherent and comprehensive instrument for technology development and transfer, through a Technology Protocol or other approaches. It stressed the need for enhanced institutional support under the UNFCCC for the identification of country/regional technology needs, and for mechanisms (including performance indicators) to measure, report and verify the effectiveness of technology transfer to developing countries. There is also a need for a funding mechanism under the UNFCCC to be managed and operated by the COP.

Ghana said that technology transfer is hindered by many barriers which include technical, political, financial and social aspects. Among some barriers it mentioned were inadequate technology information (including cost, performance, suitability etc); limited capacity for operation and maintenance; limited skills to manage and adapt the technologies; lack of an enabling environment from supply and demand sides, including the issue of intellectual property rights; investment risks; lack of financing or access to credit; high cost of technology and insufficient investment.

Ghana also stressed the need for an international mechanism for the development, diffusion and transfer of technology. It called for a multilateral technology cooperation fund to support such efforts. There is need for an enhanced institutional arrangement that supports a technology board (with sectoral technology panels to accredit international action on technology development and transfer), that endorses country programmes and monitors reporting and verification actions.

India said that realising the full potential of technology will require mechanisms across all stages of the technology cycle which is not just a question of transfer alone, but also of generating new technologies as well as research, development and deployment.

In the area of new technologies, the transfer of technology and know-how should be aided by a suitable IPR regime. For technologies owned by the private sector in developed countries, the respective governments could compensate the owners for their transfer and deployment in developing countries. As for mature technologies, India called for appropriate financing models.

On accelerating technology development, India proposed joint development with IPR-sharing through consortia involving the private sector and financing structures with cost-sharing. It also suggested a venture capital fund with global sourcing of resources for early stage technology.

On accelerating transfer and diffusion, India stressed that technology transfer arises out of a specific responsibility of parties under the Convention without any requirement of reciprocity. It is distinct from purely market-based transfer arrangements. Global financing arrangements require global public procurement of IPRs and in ensuring the affordability of the products and services.

South Africa commented that it was interesting and clear that there were many areas of convergence in the proposals coming from the developing countries. It said that the life of a technology had many stages of maturity, which involved the retrofitting of old technology, the deploying of existing climate friendly technology more widely at an affordable cost and the incentivising of new and emerging technologies.

In the wider deployment of existing technology, issues of finance include affordability and IPRs, it said. There should be preferential terms provided to developing countries with the LDCs obtaining the technologies for free.

Bangladesh, speaking for the LDCs, said that it was key to enable technology needs assessments, improving access to technology information and removing the barriers to deployment such as IPRs. It particularly stressed the need for technologies in adaptation. In relation to the institutional support necessary, it said that establishing a technology transfer and development board with a clearing house was important.

Pakistan said that a key concern that has been and should be at the centre of discussion and future actions is to make technology accessible to all those affected and for developing countries, these technologies should be made available to them at an affordable cost.

It said that the proposal to establish a multilateral fund has been positive and should be considered very seriously. The most critical area is the barriers to transfer of technology and whether the international regime, including that relating to IPRs, poses barriers or facilitates this.

In Pakistan’s view, the IPR regime does both, in that it facilitates the development of technology by providing incentive and reward to the inventor or entrepreneur but at the same time it provides monopoly pricing power, which acts as a barrier in its diffusion. Consequently, additional measures are vital and necessary to remove these barriers to transfer of technology.
Pakistan proposed the following:

-- An international system or an agreement on compulsory licensing for climate friendly technologies along the lines of what was undertaken in the health sector;

-- Joint technological or patent pools providing and transferring technologies to the developing countries at low cost, an idea which is being discussed in the context of TRIPS and access to medicines;

-- Limited time for patents. There can be reduction of the period of patents on climate friendly technologies.

--The provision of incentives (tax exemption, subsidies etc) for the owners of technology so that they can put in place a system of differential pricing (in which developing countries are charged lower prices).

The EU, speaking on effective mechanisms for scaling up development and transfer of technology, said there is a need to define an enhanced framework for a Copenhagen agreement. A shared vision requires the deployment of ESTs for mitigation and adaptation at an unprecedented scale and pace, it said.

The EU added that different policy instruments are needed to stimulate investment in different technologies. It stressed the need for an effective enabling environment. For an enhanced framework for technology, the EU said that there was a need to stimulate the formation and development of national and international innovation systems and markets and create a favourable investment and enabling environment that engages the private sector.

This includes the need for developing countries to adopt appropriate policies and measures for attracting domestic and international investment, including both public and private financing. The EU said that the developed countries should do more to support existing and new financing mechanisms, exploring a range of technology- oriented agreements within and outside of the UNFCCC.

In response to the various developing country proposals, the United States said that given the magnitude of the level of resources needed, it was important to look at the private sector’s contribution without the public sector. To sweeten the deal for the private sector, said the US, the reduction of taxes and tariffs was needed.

The US also wanted to know from India on how the terms of trade would be established as regards the public procurement of IPRs. The US stressed that IPR was a source of creativity and innovation. It did it not see IPRs to be a barrier to technology transfer. Instead it saw IPRs as strengthening access to technology.

India in response said that there was a need to have a balance between the public and private benefit. While ensuring rewards to the innovator, the public sector needs to take the technology on board and bring them to market where it is not able to perform the function. India said that it was not replacing the concept of IPRs but rather it was for the creation of an enabling mechanism or system that compensates the innovators and brings the technology to the market more quickly.

Canada said there was a need to reduce the barriers for the private sector in taking risk reduction towards greenhouse gas reductions. There are challenges in technology commercialisation and innovative policy approaches. It said that weak IPR regimes would dampen innovation. Canada suggested a roundtable in Poland (at the next meeting of the Conference of Parties) with the private sector to address these challenges.

A “contact group” will further discuss the technology issue, after the Chair produces a paper summarising his views of the main points arising from the roundtable.


European Patent Forum

Lubljana, Slovenia, 7 May 2008
Address by Yvo de Boer, Executive Secretary
United Nations Framework Convention on Climate Change

Excellencies, ladies and gentlemen,

Thank you to the European Patent Office for inviting me to give you an overview of the key role of technology in the intergovernmental climate change process. I will also use this opportunity to request your views on how IPR issues should be handled in our process to enable technology to be at the heart of the solution to climate change.

Environmentally sound technologies (ESTs) are central to addressing climate change

However, there are currently a number of barriers to the deployment and diffusion of environmentally sound technologies, which include human behaviour, the absence of appropriate policies and legal and regulatory frameworks and the need for investment in infrastructure necessary for new energy technologies. IPR- and patent-related issues may also be barriers.

…Ambitious, binding targets for industrialised countries are most likely to rapidly push technologies into the market. Additionally, the deployment and diffusion of technologies also require additional investments in R&D both from the public and private sector.

Yet given that technology transfer to developing countries needs to be scaled up urgently, the barriers, including IPR and patent-related issues, need to be swiftly overcome.

… Technology has thus become one of the central elements, which will move the climate change process forward and needs to be urgently boosted.

Put differently, the two-year process presents an important opportunity to strengthen technology approaches that significantly scale up development and transfer of technologies. Importantly, it needs to enhance the access of developing countries to affordable technologies and facilitate international technology cooperation. It thus needs to include workable solutions for handling IPRs.

… Enabling technology transfer is not just about financing transfers, but also about tackling the main barriers in the technology originating and receiving countries. Parties have cited IPR and patent-related issues to be barriers. The climate change process needs your input on how to address the complex issue of intellectual property and patents for climate friendly technologies.

To begin, are intellectual property rights (IPRs) a barrier to the transfer of technologies to developing countries?

At the Bangkok Climate Change Talks last month, several developing country Parties1 identified IPRs as a barrier to technology transfer that needs further consideration, including in the following areas:

o Regulating the patent regimes to balance rewarding technology innovation with access to a common public good.

o Removing barriers to accessing technologies in the public domain.2

o Increasing access to clean technologies by providing compulsory licenses for these technologies.3

Developed country Parties identified IPRs as a key element necessary to stimulate and reward technology innovation and to promote technology competition.

The issue of IPRs is not new: Agenda 21, as agreed at the Rio Earth Summit in 1992, calls for enhanced access to and transfer of patent protected Environmentally sound technologies (ESTs), purchase of patents and licenses on commercial terms for their transfer to developing countries on non-commercial terms and undertaking measures to prevent the abuse of IPRs.

There are a number of conflicting views on IPRs

Those in favour of IPRs for technologies generally hold that a strong IPR protection is needed to stimulate and reward innovation. There is also a view that strong IPR protection would help deploy advanced technologies.

Views opposing IPRs for technologies maintain that IPRs make it more difficult to secure access to a global public good and that IPRs prevent developing countries from accessing affordable and adequate technologies.

Why IPRs may not be a barrier for the transfer of and access to environmentally sound technologies

Views expressed by Parties include:

• Many existing climate friendly technologies are not protected by patents and therefore IPRs may not be relevant.

• IPRs are a small part of the total capital requirements for low GHG technologies and even when patented, these patents were not a major concern either to importers or exporters.4

• The level of tacit knowledge not covered by the patent may prevent effective transfer rather than the IPR cost itself.5

Do we need a special patent regime for climate change?

Comparisons are often made to the situation regarding patents for HIV/AIDS drugs. However, the situation with HIV/AIDS drugs was different in that public health was put before IPRs by means of a WTO Ministerial declaration. This reinforced countries’ liberties to waiver requirements in cases of national emergencies or extreme urgency.

With regard to environmentally sound technologies, such a case has not been made. Nonetheless, the question whether special IPR arrangements in the context of climate change are needed, remains. The overriding aim needs to be to put in place practical arrangements for accelerated technology transfer to take place.

Parties to the Convention may address this question as part of the two-year negotiating process. Some issues that could be discussed include:

Is public ownership of IPRs for ESTs possible (can governments buy out IPRs)?

Public-private partnerships (PPPs) are useful in such settings and here a comparison to the pharmaceutical sector does apply. Options include:

o Purchasing commitments (e.g. power purchase agreements) as an incentive for the development of new technologies;

o Voluntary buy-out of IPR for existing technologies (governments agree a price with the IPR holder to buy all or limited rights to the IPR);

o Compulsory licensing (government forces the holder of the IPR to grant use to the state or others. Usually, the holder does receive some royalties, either set by law or determined through some form of arbitration).

Some positive experience has been reported with purchasing licences for small coal-fired boilers in China6. It proved useful because a proper enabling environment was established by the recipient country.

In which cases could public ownership of IPRs for ESTs be problematic? In which cases not?

Views expressed by Parties include:

For key existing mitigation technologies PPPs for buying IPR rights could be problematic and less suitable for public funding of IPRs or compulsory partnerships.

o For technologies such as electricity generation, IPRs generally represent a smaller component of cost due to the scale of the capital investments and running costs.

o Tacit knowledge and challenge of re-engineering advanced energy technologies could require continued co-operation with the owners of the technology.

The development of new technologies, particularly those with significant public funding, could be more conducive to public IPR ownership. As these technologies would be collaboratively developed, the IPR could potentially enter into joint ownership with the aim of making the IPR available as a free or low cost public good.

Some areas of adaptation, where there is a strong public good element, may also provide good reason to extend existing efforts to overcome IPR barriers (e.g. health impacts from climate change).

… Some final thoughts on technology in future climate change abatement

Enhanced action on technology development and transfer to support mitigation and adaptation action will play a key role in the future climate change regime. Patenting inventions should be used as an opportunity in this context.

…In the intergovernmental climate change process, we have been discussing IPR-related issues in a rather theoretical manner up to now. Some Parties maintain that IPRs constitute a major barrier, others maintain that they don’t.

To move forward, we need clarity on where IPRs may prevent access to technologies and may affect the protection of a global public good. And we need clarity on where they don’t. If IPRs are in fact a barrier, is that true for technologies for all sectors of the economy? And if IPRs are a barrier, how can that barrier be overcome? How should IPR-related issues be handled in the international climate change context, especially in view of a Copenhagen outcome?

New, internationally collaborative approaches to low carbon technology research and development may have a role to play in overcoming IPR issues in future at the same time as contributing to building technological capacity in developing countries.


Note on Access to Technology, IPR and Climate Change

- Martin Khor

European Patent Forum 2008

Inventing a cleaner future: Climate change and the opportunties for IP

Lubljana, Slovenia, 7 May 2008

1. If developing countries are to moderate their emissions growth and eventually to cut their emissions, and still have the capacity to have economic growth (of the appropriate type, consistent with sustainable development), the key is for them to have access to climate-friendly technology at affordable prices.

2. Climate change is perhaps the most important and serious problems of our times. "Business as usual" ways of producing, consuming and doing business are no longer an option. Innovative thinking, outside the box in many cases, is called for. In this emergency situation, the survival of the planet and of humanity is the top priority. Narrow interests have to give way to the general public good, which in turn must incorporate the public interest internationally.

3. A global framework of negotiation and agreement on climate change is imperative, and it has to be fair and effective. The UNFCCC is the global framework, together with its Kyoto Protocol. Technology development and transfer, together with finance, is the key component of a fair agreement under the UNFCCC. The Convention recognises this in several provisions, including article 4.3 (developed countries shall provide financial resources including for technology transfer needed by developing countries to meet their agreed full incremental costs of implementing measures), art. 4.5 (developed countries shall take all practicable steps to facilitate and finance transfer of and access to environmentally sound technologies and know how particularly to developing countries; and shall support the development and enhancement of endogenous capacities and technologies of developing countries) and art. 4.7 (the extent to which developing countries will implement their commitments will depend on effective implementation by developed countries of their commitments on financial resources and technology transfer).

4. The Bali (Dec 2007) decision on long term cooperation contains sections on actions on technology transfer and financial resources. These should be provided to developing countries in a measurable, reportable and verifiable manner.

5. Despite the central role of technology transfer, in fact there has been very little if any practical transfer of climate-friendly technology under the UNFCCC. The operationalising of the principles, the establishment of mechanisms, and the actual transfer of technologies have yet to be put into effect. These are now urgent tasks.

6. Technology transfer is not merely the import or purchase of machines etc. at commercial rates. A central aspect of technology transfer is the building of local capacity so that local people, farmers, firms and governments can design and make technologies which can be diffused in the domestic economy. In the first stage of technological development, developing countries can go through three stages:

a. initiation stage, where technology as capital goods are imported;
b. internalisation stage, where local firms learn through imitation under a flexible IPR regime;
c. generation stage, where local firms and institutions innovate through their own R and D. (UNCTAD 2007).

7. In stage 1, the country is dependent on capital imports, some of which (that are patented) may be extra high in cost because of the higher prices enabled by monopoly margins. In stage 2, costs may be lowered by the "generic versions" locally produced. In stage 3, the local firms are able to design and make their own original products. Technology transfer may involve the purchase and acquisition of equipment; the know how to use, maintain and repair it; the ability to make it through "imitation" or reverse engineering; to adapt it to local conditions; and eventually to design and manufacture original products. The process of technology transfer involves progressively climbing through all these aspects.

8. Several conditions have to be present for technology transfer and development to take place. The absence of such conditions can form barriers to technology transfer. Among the barriers that are normally listed are poor infrastructure, inadequate laws and regulations, shortage of skilled personnel, lack of finance, ignorance of technology issues, high cost of certain technology agreements, problems created by equipment suppliers, and intellectual property rights.

9. Whether IPRs constitute a barrier or an important barrier depends on several factors, such as whether the particular technology is patented, whether there are viable and cost-effective substitutes or alternatives, the degree of competition, the prices at which it is sold, and the degree of reasonableness of terms for licensing, etc.

10. Some technologies are in the public domain, or are not subjected to patents. But many key technologies are patented. And many technologies of the future will also be patented.

11. For technologies that are in the public domain, international cooperation is also required to facilitate its transfer. Importantly, the space for technology in public domain should be expanded. Governments in developed countries play an important role in funding R and D programmes. The programmes are implemented by government institutions or in partnership with the private sector. About 40% of annual national R and D spending within some OECD countries was publicly funded (UNCTAD 1998). In addition governments sponsor a range of R and D that underpin private sector investments in developing environmentally sound technologies (ESTs). (IPCC 2000 Ch. 3, p 95). A paper for UNFCCC surveyed government R and D funding of ESTs in the US, Canada, UK and Korea. It found that in most countries, governments allocated their rights (patents, coprights, trademarks etc) to the recipient research institutions to a significant degree. As a result, the diffusion of climate-friendly technology would "typically be along a pathway of licensing or royalty payments rather than use without restriction in the public domain." (Sathaye et al, 1995). The IPCC study (2000) calls on OECD countries to influence the flow of such technology directly through their influence on the private sector or public institutes that receive funding from government for their R and D to be more active in transferring technologies to developing countries. It cites [UN] Agenda 21 (ch 34 para 34.18a) that "governments and international organisations should promote the formulation of policies and programmes for the effective transfer of environmentally sound technologies that are publicly owned or in the public domain." Products that emerge from publicly funded R and D should be placed in the public domain, those that are partially funded should be in the public domain to the extent to which it is publicly funded.

12. As part of international cooperation, there can be R and D programmes jointly planned and coordinated by governments (developed and developing). If certain products are wholly publicly funded, they could be placed in the public domain, or else made available through affordable licenses. This can make the technologies much more affordable.

13. For technologies that are patented, there must be an understanding that patents should not be an obstacle for developing countries to have access to them at affordable prices. According to the TRIPS agreement, if there is a patent on a product, a process or a technology, a firm or agency in a country in which the patent is operating can request for a voluntary license from the patent holder, in order for the firm to make or import generic versions of the patented product or technology. The patent holder will normally charge a price (royalty or license fee) for granting the license. If the patent holder refuses to give a license, or if the price charged is too high, the firm or agency can apply to the government to grant it a "compulsory license". Alternatively, a government that wants to have access to generic versions of a product or technology can itself take the initiative to issue a compulsory license.

14. The firm or agency granted a compulsory license would normally have to pay a royalty or remuneration to the patent holder. In the case of pharmaceutical drugs, the royalty rate offered in recent compulsory licenses by developing countries such as Malaysia, Indonesia, Thailand, ranges from 0.5 to 4 per cent of the price of the generic drug.

15. Under the TRIPS agreement, there is considerable flexibility provided to WTO members states on grounds for issuing compulsory licenses. These grounds are not restricted, as confirmed by the WTO Ministerial Declaration on TRIPS and Public Health (Doha 2001). It is not necessary to declare a state of emergency, for example. Certainly the fact that a country requires a product or technology in order to meet its objectives or responsibilities to mitigate climate change or to adapt to climate change is a most valid ground for compulsory licensing.

16. Compulsory licensing is not a unique or exceptional policy. In developed countries like the US and the UK, there have been many compulsory licenses granted by the government to facilitate cheaper products and technology in the industrial sector. In many developing countries, compulsory licenses have been issued for the import or local production of generic drugs. There is a type of compulsory license known as "government use" which many developing countries have made use of. This is when the product to be imported or produced in a generic version is to be for public, non-commercial use, for example for medicines distributed by the government in clinics and hospitals. In such cases, prior negotiation with the patent holder is not necessary although remuneration or royalty to the patent holder is required.

17. Thus compulsory licensing is an option that developing countries can seriously consider for those patented climate-friendly technologies for which they have need, which are expensive, and in cases where negotiations with the patent holder do not yield results in lowering the prices to reasonable levels. The Brazilian Foreign Minister Mr Celso Amorim in his speech at the plenary of the Bali climate conference in Dec 2007 said that inspiration should be drawn from the case of TRIPS and medicines, and that a similar statement regarding TRIPS and climate friendly technologies should be considered. Strictly speaking, it is not necessary for such a statement to be made by Ministers before a country exercises rights that it now has to issue compulsory licenses for climate technologies. The flexibility rights already exist in TRIPS. However when countries exercise these rights they may be penalised by other countries. Therefore developing countries find it useful that an international declaration is made, so that when they exercise their rights they are to some extent more protected politically, which adds to their confidence of exercising what is already their rights under international law (ie TRIPS). However there is no guarantee that the political declaration will protect a country that exercises its rights - Thailand has been placed on the IP Watch List of the USA (which implicitly carries a threat of future trade sanctions) following its issuing compulsory licenses on some drugs.

[“We must agree on a Roadmap for a comprehensive and global effort based on the Convention and its Kyoto Protocol. It must carry forward the two-track approach agreed in Montreal in 2005. The Bali Roadmap must provide clear benchmarks for negotiating the future of the regime by 2009, based on the four pillars of mitigation, adaptation, financing and technology. The Adaptation Fund must become operational without delay. Innovative mechanisms for clean technology development must be devised. The TRIPs and Health declaration of the WTO and similar initiatives in the World Health Organization may be a source of inspiration.See Speech by the Foreign Minister of Brazil, Ambassador Celso Amorim, at the High Level Segment of the 13th Conference of the Parties to the United Nations Framework Convention on Climate Change and the 3rd Conference of the Parties serving as Meeting of the Parties to the Kyoto Protocol — Bali, Indonesia, 12 December 2007, Brazilian Embassy in Washington, at: ].

18. Another value in a TRIPS and Climate Change Technologies declaration may be in extending the lifting of the restriction under TRIPS for compulsory licensing (i.e. that it be restricted to production of products "predominantly for the domestic market") from pharmaceutical drugs to climate-friendly technologies and products as well. This will enable the more adequate supply of "generic" technologies and products to countries that lack productive capacity to produce their own such products.

19. It is also possible to raise the level of ambition for sustainable development, by proposing that environmentally friendly technology should not be patented in the first place (so that the process of compulsory licensing etc is not even required). There is a strong rationale for this, at least for climate friendly technology and products. If climate change is truly the serious crisis threatening human survival, and there is only a few years left to start very strong action, then the situation is similar to emergency war-like conditions. In such conditions, individual commercial interests such as patents are suspended so that there can be concerted national action in the most effective way, to face the enemy. Developing countries require technologies at the cheapest possible prices. If they obtain the needed technology at one quarter the price, they can increase the rate of change to put into effect mitigation and adaptation measures many times faster and more effectively.

20. There can be many variations for the relaxation of IP in relation to climate friendly products and technologies. For example:

a. An exemption for patents on climate friendly technologies and products;
b. An exemption on patents in developing countries only, while patents can still be granted in developed countries, to allow for recovery of innovation cost, and provide incentive;
c. Developing countries, if they so desire, are allowed to exclude patents on climate friendly technologies and products.
d. Voluntary licenses must be automatically granted on request, which will be free of royalty;
e. Voluntary licenses are automatically given, and compensation is provided.

21. There are some examples of developing countries and their firms being hampered from adopting climate friendly technologies or products due to there being patents on these products, and due to the unreasonable demands made by the patent holders on companies in developing countries that requested a voluntary license from the patent holder. A study on transfer of technologies for substitutes for ozone-damaging chemicals under the Montreal Protocol has given details for some cases in which technology transfer to developing countries' firms was hindered by either high prices or other unacceptable conditions imposed by companies holding patents on the chemical substitutes onto companies in developing countries that wanted a license to manufacture the substitutes. Examples include:

a. The case of HFC-134a, a chemical used in to replace harmful CFC in refrigeration. When Indian companies requested a license from a US company owning the patent for HFC-134a, in order to manufacture the chemical, they were asked to pay a very high sum (US$25 million) which was far above the normal level, or to allow the US company to own a majority equity stake in a joint venture and with export restrictions on the chemical produced in India; both options were unacceptable to the Indian producers.

b. Korean firms also faced difficulties when they wanted to replace CFCs with acceptable substitutes HFC-134a and HCFC-141b, which had been patented by foreign companies in Korea. "South Korean firms are of the opinion that the concession fees demanded by technology owners represent a lack of intention to transfer the alternative technology." (Anderson et al 2007 p 262-265).

c. The case of HFC-227ea: This chemical (known also as FM-200) is a substitute for halon-1301 for fire protection applications. The US owner of FM-200 patent requires that licensed fire protection systems satisfy certain design and inspection requirements and only 3 enterprises (in US, UK, Australia) have satisfied the approvals. The patent owner offered joint ventures with majority share holding but do not want to license the technology to wholly locally owned firms, and thus Indian firms are unable to avail themselves to this product (Anderson 2007 p 265).

d. Many of the technology agreements between Korean firms and their partners in Japan and the US contain restrictions such as they are not allowed to consign to a third party, to export, and that the improved technologies should be shared. (Anderson 2007).

22. In conclusion, any WTO member state is already allowed by the TRIPS agreement to take measures such as compulsory licenses and parallel importation to obtain technologies or products (that are patented) at more affordable prices. But the processes of negotiating with the patent holder and of issuing compulsory licenses etc can be quite cumbersome to countries not familiar with the procedures. It is better that developing countries be allowed to exempt such technologies from patenting. Developed countries should not treat patents or IPRs as something sacred that has to be upheld at all costs. That would send a signal that climate change is not a serious threat, as commercial profits for a few are more important on the scale of values and priorities than are the human lives that are at stake due to global warming. Technology transfer to developing countries to enable them to combat climate change should be the far higher priority. Developed countries should not treat climate technology as a new source of monopoly profits, as this would damage the ability of developing countries to phase in existing or new climate-friendly technologies for both mitigation and adaptation. The post-Bali process should therefore adopt the principle that developing countries can exempt climate-friendly technologies from patents. Such a principle would demonstrate that developed countries are serious about resolving the global climate crisis and about assisting developing countries. It would also help developing to take on mitigation and adaptation measures, which are dependent on the technologies.


The first round of United Nations climate change talks in 2008 got under way in Bangkok at the end of March 2008.

[See: Bangkok Climate Change Talks - 31 March to 4 April 2008, Secretariat of the United Nations Framework Convention on Climate Change, at: ].



Five days of contentious climate change talks in Bangkok concluded last week with an agreement on a timetable for negotiations that are supposed to culminate in a new United Nations accord on reducing greenhouse gas emissions by the end of 2009.

Meeting under the auspices of the United Nations Framework Convention on Climate Change (UNFCCC), delegates from close to 200 governments agreed on a detailed work programme for 2008. They also discussed approaches to slash global emissions amid concerns about how such reductions might affect the economic competitiveness of countries or particular sectors.

The Bangkok talks, which ran from 31 March through late into the night on 4 April, marked the first official negotiations since the landmark Bali conference last December, which launched negotiations on a successor agreement to the Kyoto Protocol, due to expire in 2012. The 'Ad Hoc Working Group on Long-term Cooperative Action under the Convention' (AWG-LCA), which includes all UNFCCC parties, held its first session. The 'Ad Hoc Working Group on Further Commitments for Annex I Parties under the Kyoto Protocol', which includes industrialised nations that already have taken on reduction commitments, met for the fifth time.

Discussions on "sectoral approaches" give rise to competitiveness concerns

Some countries have suggested a sectoral approach to reducing emissions for industries such as steel, aluminium, pulp and paper, cement and agro-chemicals. Proponents say that this would ensure that effective reductions are achieved in emissions-heavy sectors.

How sectoral reductions would be implemented, however, remains divisive. While developing countries have stressed that the sectoral cuts should be part of industrialised nations' reduction obligations, others argue that developing countries should also participate in global reduction efforts by controlling emissions from their high-emitting sectors. Some analysts say that a worldwide reduction effort across all major emitting sectors would contribute to preventing 'carbon leakage', the term given to the relocation of polluting industries to places where they face laxer emissions standards.

Developing countries such as Brazil and India, however, cautioned against sectoral approaches that led to the development of international standards that developing countries would be forced to comply with, hampering their exports. Brazil noted that this would conflict with the notion of "common but differentiated responsibilities" that underlies the climate regime. India stressed that there was no legal basis under the UN Framework Convention on Climate Change to deal with competitiveness issues.

In general, several developing countries emphasised that in efforts to mitigate greenhouse gas emissions, there is a difference in the nature of the obligations on developed and developing countries. Brazil and South Africa noted developed countries need to reduce greenhouse gas emissions. In contrast, developing countries should take action to reduce growth in emissions, it being understood that their total emissions will have to continue growing as their economies develop.

Delegates ultimately agreed that cooperative sectoral approaches and sector-specific actions would be further discussed at future sessions of the working groups.

Intellectual property issues divisive

The development and transfer of environmentally friendly technologies, such as those for increasing energy efficiency or generating renewable energy, has emerged as a major aspect of the climate negotiations.

In Bangkok, delegates grappled with mechanisms and funding for the development, deployment and transfer of technologies. While addressing barriers to technology transfer and diffusion, several developing country delegates raised concerns about barriers posed by intellectual property (IP) rights.

India and Pakistan called for a relaxation of intellectual property standards for all climate-related technology, in order to support their rapid diffusion and facilitate access by developing countries. Going further, Saudi Arabia suggested that countries should be able to issue compulsory licenses for climate change technologies - meaning they would be allowed to unilaterally authorise companies to copy patented technologies, against payment of a royalty to the patent-holder.

Others took different views. The US argued that intellectual property has not been a barrier to the diffusion of climate technologies and that those criticising the IP system were the very countries that benefited from it. The US also called for the elimination of tariffs and non-tariff barriers to trade in environmental goods and services as a way to foster access to technology.

China, a significant importer of environmental technology but also a rapidly growing producer and exporter, called for a balanced approach, saying the technology transfer discussion should not be allowed to get stuck on the single issue of intellectual property. In order to better understand the issue, delegates have agreed to further exchange on technology development and transfer, including at three of the scheduled eight in-session workshops under the AWG-LCA. The next round of climate talks is due to take place from 2-12 June, in Bonn, Germany.


Furthering EU Objectives on Climate Change and Clean Energy: Building Partnerships with Major Developing Economies

By Deborah Murphy, John Drexhage, Aaron Cosbey, Dennis Tirpak and Christian Egenhofer

IISD (© 2008)

This study… is about the EU’s engagement with major industrialized countries in the developing world. With this current study, further work has been carried out on possible ways to strengthen EU partnerships with major industrialized countries in the developing world…The study focuses on partnership opportunities with Brazil, India, China, South Africa and Mexico [BISCAM], looking at the three focus areas of financing and investment, trade and development cooperation.

...[The study] focuses on how foreign policy can help to further EU objectives on climate change and clean energy, looking specifically at how the EU can more effectively partner with large developing emitters in supporting a global transformation to cleaner energy systems over the first half of this century.

… Nor should we underestimate the impact of public policies in sending signals to industry; first in Europe, then slowly but surely, creating a ripple effect throughout the global corporate community. It is clear that achieving any success in implementing a sustainable global climate regime over the next few decades requires a pragmatic partnership with all major economies. In many respects, the EU takes a leading role on the international climate agenda.

… An effective partnership will work to allay growing competitiveness concerns among industry within the European Union. Efforts to meet the EU unilateral target—20 per cent reductions in greenhouse gas (GHG) emissions by 2020 from 1990 levels—can only go so far before industries that rely extensively on carbon and other GHGs for their operations are so adversely affected that they are forced for economic reasons to move “overseas” or to seek protection from competitors.Any additional unilateral targets without commensurate commitments by other major economies and their industries would be politically difficult to deliver.

… The Lisbon Strategy to achieve higher economic growth, greater competitiveness in world markets and full employment by 2010 was adopted by the European Council in March 2000… The environment pillar recognizes that sustainable development objectives could present significant economic opportunities, with the potential to unleash a new wave of technological innovation and investment in sectors such as energy and transport; and research on energy efficiency, renewables and clean energy technologies, as well as incentives to promote their use.

Climate change and clean energy have also started to figure more prominently in the EU’s industrial strategy… EU industrial policy is meant to create incentives to unlock the full potential of low-carbon and resource-efficient goods, technologies and services in the EU. The strategic aim is to encourage all enterprises to have the highest profile in energy and resource efficiency, use low-carbon technologies and lead worldwide markets for low-carbon products. To avoid a loss of competitiveness by EU energy-intensive industries, there is a need for an appropriate framework comprising, among others, an external energy policy in international relations, trade policy and industrial dialogue to encourage and support sustainable energy and climate change policies in partner nations such as China, India and other developing countries.

Climate change has been an, if not the core, area of the European Sustainable Development Strategy (SDS)… (pp. 8-10)

The Seventh Framework Programme for Research and Technological Development (FP7) is the EU’s main instrument for funding research in Europe. EU R&D programs bundle multi-disciplinary research-related EU initiatives together under a common roof in order to ensure coherence of priorities and consistency in management.

FP7 places greater emphasis than in the past on international cooperation activities. The core of FP7 is the Cooperation Programme to foster collaborative research across Europe and with international partners, according to several key thematic areas, including among others, energy, and environment and climate change… (p.12)

The EU has taken on ambitious climate and clean energy goals. Despite best efforts at home, attaining the overall environmental goal of avoiding dangerous anthropogenic interference with the global atmosphere will depend significantly on what happens in developing countries, especially the BICSAM nations characterized by high economic growth and rapidly growing emissions. Engaging these countries in clean energy and climate change efforts will require a strategy that accounts for their particular needs, including economic growth, energy investment, and vulnerability to climate change impacts. (p.15)

The BICSAM nations, with rapidly accelerating economies and large populations, have significant impacts on trading, markets and emission trends. As a group, these five nations comprised 43 per cent of the global population, 11 per cent of global GDP and attracted 13 per cent of foreign direct investment (FDI) in 2005 (see Table 1). The rising economic power of the BICSAM nations makes them global competitors whose influence is significant, and they are changing consumption and production patterns in the world economy. These countries are now competitive with EU countries on a range of products and services. (p.16)

… It makes sense for the EU to initially focus on BICSAM nations when it comes to GHG mitigation policies and activities. Indeed, it could be argued that initial efforts should be focused on China and India, as emission limits or cuts in these countries have the potential to have a huge impact on meeting global reduction goals because of the massive size of their populations and economies, and their level of economic growth. Engaging all five of the BICSAM nations, because of their elevated economic growth and increasing regional and international influence, would likely have important ripple effects in other developing countries throughout the world. (p.19)

…Most of the elements to engage BICSAM countries discussed in this paper require some form of financial incentives…[W]hile all countries will likely bear the majority of costs associated with climate change through their own domestic financial resources, support and transfers from developed countries will be needed…[I]t is important to focus on the role of private sector investments as they constitute the largest share of investment and financial flows (86 per cent). (p.21)

Investment law reform is a means for the EU to encourage clean energy uptake in BICSAM countries. The primary potential rests in the flows of FDI for energy infrastructure that will take place over the coming decades.

…Investment law as written in the myriad of bilateral and regional agreements (over 2,500 at last count) has little direct bearing on clean energy investment per se…Perhaps more important, investment law could be used proactively as a tool for the promotion of such investment. (p.22)

…Such an agreement might also…set out minimum standards of regulatory regimes that will foster clean energy investment at the domestic level (e.g., independent power producers purchase legislation, perhaps with preferential tariffs). This aspect would resemble the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights, which obliges signatories to create a regulatory regime that adequately protects intellectual property. Clearly, along with such obligations would need to come an adequately-funded program of capacity building to support the mandated regulatory reform. (p.23)

…4.2.3 Supporting Technology Cooperation

Technology cooperation is an area of particular interest for BICSAM countries, and could be supported by ODA or broader funding programs. Technology transfer has been a controversial topic under the UNFCCC, with developing nations calling on developed countries to increase financial and technical support, focusing on the removal of intellectual property rights and the creation of a fund to buy patents. Developed countries have argued that intellectual property does not belong to government but to the private sector and have pointed to the need for “enabling environments” to create a good investment climate. The EU would be well advised to avoid the acrimonious debate centred around technology transfer; focusing instead on innovative, tangible technology cooperation efforts… (p.33)

…5.2 Climate and Clean Energy Cooperation Programs

While development aid provides limited opportunity to influence BICSAM nations, there are potentially new dynamics that can be brought into development cooperation programs to further EU clean energy goals.

…A coordinated climate and clean energy program could aim to have impacts on the investment climate, macro-economic stability and openness of financial institutions; and could include:

…• Scale up capacity building and institutional support for effective clean energy and climate policy regimes (e.g., regulatory frameworks, common product standards, intellectual property rights, strategic frameworks and analytical exercises to determine what a clean energy development path means to BICSAM nations). (pp. 47-48)


Are green technology IP rights owners about to become the new big pharma?

By Joff Wild

IAM Magazine

30 November 2007

Environmentally-friendly technology is rapidly emerging as the latest patent pressure point and, with the effects of global warming become ever-more apparent, it is not going to go away. Companies and other rights owners operating in this area – and there are an awful lot of them, including car manufacturers and oil companies, as well as the more obvious candidates such as turbine manufacturers – are going to have to think very carefully about how they handle the criticisms and queries that will increasingly come their way. If they get things wrong, then it could spell major trouble for them.

Just this week, there have been calls from both China and Europe to improve access to energy-saving technology. The costs associated with its transfer are currently too high, it is being claimed, which means that products being manufactured in the developing world are not as green as they could be. Of course, if true this not only affects people living in developing countries, but all of us.

Global warming knows no boundaries – factories and cars that release carbon dioxide into the air in the US or India cause potential harm not just to the citizens of those countries, but also to those of us who live in Europe, or Africa or Latin America. Companies that own patents covering technologies that can reduce the impact of such fumes but which are unwilling to license what they have, or charge what are perceived as prohibitory royalty rates, will very quickly find they become the targets of serious criticism that makes the flak received by big pharma seem like nothing in comparison.

As I said last year when writing about the UK’s Stern Report, it is surely in their best interests for companies themselves to recognise the global significance of their technologies and to develop IP strategies that reflect this fact. If they do not, they can be absolutely certain that governments will do it for them with consequences that they are bound not to like. For their part, however, legislators and campaigners should recognise – as did Nicholas Stern – that without strong IP there is much less incentive for anyone to invest the sums necessary to do R&D in the environmental field, meaning that potentially breakthrough products will be far slower to arrive or may not ever appear. In short, we need everyone to behave like grown-ups. Which is why I am now feeling a little bit depressed!


EU Parliament Urges Change In IP Rules For Environmental Technology

By David Cronin

Intellectual Property Watch

Nov. 29, 2007

BRUSSELS - Intellectual property rules should be reshaped to ensure that they do not hinder developing countries from gaining access to technology considered vital for addressing climate change, the European Parliament has declared.

Members of the Parliament (MEPs) on 29 November approved a report that urges examination of the possibility of revising the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). TRIPS may need to be amended, the report suggests, in order to allow for the compulsory licensing of environmentally-friendly technology that is patented.

[See: Texts Adopted, Thursday 29 November 2007 – Brussels - European Parliament resolution of 29 November 2007 on trade and climate change (2007/2003(INI) - P6_TA(2007)0576, at: ]

This call follows criticism by environmental activists of the European Union’s insistence on robust protection of intellectual property. The policy was laid out in a 2006 paper from the European Commission entitled Global Europe, which stated a determination to demand a high level of IP standards in markets where European firms operate.

Friends of the Earth (FOE) argues that this policy is making crucial technology too expensive for developing countries. It advocates that TRIPS be altered so that technologies geared towards fighting climate change are excluded from patentability in order to push their prices down.

“With a high IPR [intellectual property rights] regime, products and processes are now patented and less accessible,” said FOE campaigner Meena Raman. “So to really achieve the transfer of climate-friendly technology, the biggest incentive would be to eliminate IPRs [intellectual property rights] related to these technologies.”

Dalindyebo Shabalala of the Center for International Environmental Law in Geneva said waiving patents could be necessary to ensure the wider availability of fuel-efficient cars. These vehicles are designed to cut emissions of carbon dioxide, the main gas blamed by scientists for triggering climate change.

“The automobile industry is fully protected with respect to IP,” he noted. “There are hundreds of patented products in cars. The EU’s insistence on high IP protection is an insistence on a high price for climate change-related goods. This means that people in developing countries cannot afford to pay for them.”

While TRIPS does allow for exceptions to patents in cases of public health or environmental emergencies, he feels there is a case to be made for making those provisions clearer. “TRIPS can be a barrier [to technology transfer] if it is interpreted in a certain way,” Shabalala added. “There may be a need for more clarity.”

The Parliament’s report was drafted as part of preparations for the international conference on climate change in Bali, Indonesia (3-14 December), which is likely to launch talks on framing a successor to the 1997 Kyoto protocol for reducing greenhouse gas emissions.

French Green MEP Alain Lipietz, the author of the report, said the EU is already a world leader in developing renewable energy technologies such as solar panels and wind turbines. It should also become a world leader in exporting “environmental goods and services,” he added.

As well as revising IP rules, he called on the EU to remove the tariffs it levies on imports of “green goods” such as low-energy light-bulbs, and to campaign for an end to subsidies for heavily polluting industries.

But Stavros Dimas, the European commissioner for the environment, claimed that IP protection does not present as great a problem as some maintain. Often, he said, there are many types of technologies that can allow the same approach, citing the availability of numerous different wind turbines.

“The cost component of the intellectual property rights is judged to be a relatively small part of the total cost of such technologies,” he said.

Although he acknowledged that IP rights can prove a barrier to technology transfer, he said that other issues such as the economic policies of developing countries need to be taken into account. “Many companies will not invest in developing countries if their IPRs are not protected and if capacity-building in the host country is inadequate.”

Dimas gave a commitment that the EU will use the Bali conference and any ensuing talks to push “for a better understanding of the full range of barriers” to technology transfer.


REPORT of the European Parliament On Trade and Climate Change


By Committee on International Trade - Rapporteur: Alain Lipietz




on trade and climate change


The European Parliament,

… I. whereas promoting sustainable development should continue to be the main objective of EU trade policy, including through seeking to ensure that this accelerates the transition to a low carbon economy,

J. whereas consumers should receive the best possible information about the GHG emission effects of their purchases,

K. whereas prices must internalise the cost of global commons such as a stable climate,

L. whereas the UN Climate Change Conference (COP 13) in Bali in December 2007 should launch negotiations to establish a global and comprehensive post-Kyoto agreement (covering the period from 1 January 2013), including binding GHG emission targets,

M. whereas the long-term objective should be to ensure the international convergence of equal per capita GHG emissions by 2050,

N. whereas the countries that have ratified the Kyoto Protocol have not damaged their competitiveness (with the notable exception of the cement sector) and have positioned themselves as leaders in a world where GHG emissions may be regulated,

O. whereas this may not continue in the post-Kyoto period if some countries, in particular the USA, Australia, China and India, amongst others, are not involved in the '+2°C' objective , thus distorting competition in favour of firms moving to unregulated locations and increasing GHG emissions from production and transport,

P. whereas action to combat climate change should be taken across a broad front and, if it is to succeed, requires the convergence of all the main players in the world, depending on their respective levels of development, towards trade policy positions compatible with that objective,

From consensus to action

1. Welcomes the broad scientific and political consensus on the seriousness of climate change; urges the conclusion of an ambitious, worldwide post-Kyoto agreement, in line with the scenario of IPCC Working group III, on the need to limit temperature increases to 2°C and for corresponding adjustments to be made to other international agreements concerning trade, civil aviation and intellectual property; considers that a post-2012 framework should allow different countries to participate, according to their national circumstances, through a short-term, multi-stage approach and that, in the medium-term, emissions should be allocated on a per capita basis, first to developed countries, but eventually to all countries; calls on the Council and the Commission working towards building a consensus on a post-2012 framework…

Towards multilateralism against climate change

10. Stresses the need for strong cooperation between the United Nations Environment Programme (UNEP), the Climate Change Convention and the WTO, and asks the Commission to develop an initiative to support this aim; asks for swift progress to be made in updating the WTO’s definition of environmental goods and services, particularly in the current Doha Round negotiations, in order to reach agreement on the removal of tariff and non-tariff barriers to ‘green goods and services’; calls on the Commission to build a consensus on granting Multilateral Environment Agreement (MEA) Secretariats observer status at all meetings of the WTO, which are relevant to MEA issues; stresses that a lasting solution must contain a strong political message that respects an appropriate division of labour between the WTO and MEA regimes, based on core competencies; is convinced of the need to redefine the responsibilities of the WTO Committee on Trade and Environment; recommends launching a study on possible amendments to the WTO Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPs) in order to allow for the compulsory licensing of environmentally necessary technologies, within the framework of clear and stringent rules for the protection of intellectual property, and the strict monitoring of their implementation worldwide;

… 17. Urges the EU, with a view to achieving the Lisbon objectives, to develop and promote 'climate-friendly industry' at a global level particularly as trade is an important tool for the transfer of technology to developing countries; emphasises the need to reduce barriers to "green trade" by, for example, removing tariffs on "green goods" at the WTO level, reshaping the rules on intellectual property rights (IPR), facilitating the market entry of green technology by allowing climate concerns to guide export credit guarantees, as well as by removing perverse incentives and distortions of the market, such as fossil fuel subsidies;

… II. Seeking a global agreement

The ideal solution would be to obtain, at the Bali conference, a post-Kyoto agreement that includes every single country in the world.

Other multilateral agreements (WTO, International Civil Aviation Organisation, World Intellectual Property Organisation) must be made consistent with the post-Kyoto agreement; this will require only minor editorial changes.

OPINION OF THE COMMITTEE ON THE ENVIRONMENT, PUBLIC HEALTH AND FOOD SAFETY for the Committee on International Trade on trade and climate change


Draftsman: Jens Holm


The Committee on the Environment, Public Health and Food Safety calls on the Committee on International Trade, as the committee responsible, to incorporate the following suggestions in its motion for a resolution:

… 8. Recognises that trade is an important tool for the transfer of technology to developing countries; emphasises the need to reduce barriers to "green trade" by, for example, removing tariffs on "green goods" at WTO level, reshaping the rules on intellectual property rights (IPR), facilitating the market entry of green technology by allowing climate concerns to guide export credit guarantees, as well as by removing perverse incentives and distortions of the market, such as fossil fuel subsidies...