Transfer of Climate-Friendly Technologies through the Clean Development Mechanism: An Empirical Study of the Carbon Finance Market
Against the backdrop of the enhanced importance of technology transfer in the context of the ongoing climate change negotiations, the potential of the Clean Development Mechanism (CDM) as a vehicle for technology transfer has been underscored. This study undertakes an empirical exploration of the extent to which the CDM is contributing to technology transfer and what is the nature of that technology transfer. The study presents an operational definition of technology transfer in the context of the CDM and applies this definition to a dataset of the first 1000 registered CDM projects. The core finding that emerges from the study is that the contribution of the CDM to technology transfer can at best be regarded as minimal. The purpose of the study was threefold: i) To develop an understanding of the merits and limitations of the Clean Development Mechanism (CDM) as it stands; ii) To assess the CDM’s environmental integrity, such as its impact on sustainable development and its contribution towards financing “additional” emissions reduction projects; iii) To assess alternative mechanisms that could achieve emissions reductions at a greater scale to that of the CDM. The specific tasks under the study were to produce a number of briefing sheets and a final report that would: • Assess merits and shortcomings of the CDM relative to a set of criteria; • Inform CDM related actions at supply-side and demand-side level to improve the effectiveness, efficiency, regional distribution and contribution to sustainable development of the CDM. Further, to explore the options for a transition away from project-based crediting towards sectoral mechanisms and other global policies. • Assess and suggest reforms to the CDM governance structures to improve transparency, predictability, and simplicity e.g. through use of more objective and standardized approaches for setting baselines and determining additionality. The purpose of this particular briefing sheet was to assess the CDM’s contribution to the transfer of sustainable technologies to developing countries for emissions reduction. It aims to include: • Qualitative analysis on scale of transfer and current barriers to sustainable technology transfer (including the impact of CDM on transformation of energy systems and policies in developing countries); • Review of empirical evidence in literature with a focus on renewable energies and energy intensive sectors; • Options for improvement and reform to achieve technology transfer in a way that meets the CDM’s sustainable development goal. Information was obtained through a literature review, analysis and interviews with selected experts.