Innovative Financing for International Development and Transfer of Climate Sound Technologies: China

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Innovative Financing for International
Development and Transfer of Climate Sound
Technologies Chinas Perspectives

• 20-21 October, Bonn
• Zou Ji
• Renimin University of China

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Contents

• Develop and transfer technologies for producing
  global public goods climate
• How to understand innovative?
• Technology flow versus financial flows
• Financial flows
• The most important issues
• Conclusions

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Producing global public goods why is technology
transfer needed? (1)

• Global public goods climate stabilization, a
  global benefit shared by all countries.
• Developing countries are stepping into a
  development stage in which GHG emission may
  increase sharply given higher energy demand and
  lower financial and technological capacity. High
  emission may be locked in for several decades
• We need to speed up the process to transfer more
  climate sound technologies to developing
  countries in order to avoid lock-in effects.

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Producing global public goods why is technology
transfer needed? (2)

• Developed countries may play determinant role
  with much stronger capacity in technologies and
  capital in DTT
• Public finance is one of prioritized leverage
  points for developed countries to provide their
  companies with incentives to transfer
  technologies to developing countries

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KEC
GHG Emission
BAU high GHG emission path of development
Global public goods GHG emission reduction
Climate sound path of development

• Transition by
• technology changes incl. transfer from the North
• Policies
• Capacity building

Income per capita
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How to understand innovative Financing?

• Public finance should play an important roles to
  support companies in developed countries to
  transfer technologies
• PPP should be paid more attention and
• A set of systematic actions should be taken,
  including removing restriction of technology
  transfer.

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Let most TT take place in market with
significant incentives from the public finance
(differentiation in taxation and subsidies via
targeted transfer of payment) and
other regulation incentives. Annex II parties can
take a leadership in this regards.
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Technology flows v.s. financial flows
Key leverage point for innovation
Financial sources
Channel to distribute financial sources
Financial flow
Financial instruments
Financing projects/schemes investment
Adoption by users from the South
Research Development
Project development (preparing proposals) and
deployment
Commercialization and marketing
Technology flow
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Financial flows
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Analyzing stakeholders in financial flows

• Companies, holding most technologies, must make
  profit and need incentives
• Governments of the North can promote DTT via
  fiscal policies for producing global public goods
  (supporting companies by transfer of payment)
• Households need to pay more for the climate,
  especially those in the North
• Analyzing stakeholders in financial flows

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What are the substantial issues in developing
intl innovative mechanism to finance TT?

• Who pay the bills? Where the funds come from?
• How much and when they should pay?
• How to distribute the fund and in which way?
• How to assess the effectiveness of financing
  international development and transfer of
  technologies?

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Conclusions

• Selecting most important and substantial themes
  while we look at other issues at technical level.
• We need pay more attention to removing obstacles
  relating to technology transfer in the context of
  UNFCCC.
• It will be useful to discuss further the
  innovative PM to finance DTT, especially
  focusing on the roles of public finance in
  developed countries.