Technology Transfer in the CDM: some basic considerations

“Technology transfer” is often described as one of the key “co-benefits” of the Clean Development Mechanism, but it is a concept that requires further elaboration.

The UNFCCC's CDM Registration & Issuance Unit tried to measure the extent of CDM “technology transfer” at one point by looking at how many projects involved technology imports. It used companies' own reporting of "the use of equipment or knowledge not previously available in the host country for the CDM project." Industrial gas projects (such as those involving HFCs) came out well in this study.

Taking technology imports as a measure is fairly useless measure of the potential benefits, however. Further analysis of the HFC cases have shown that a fairly simple, pre-existing piece of technology was transferred in a massively inefficient manner, as this February 2007 article by Michael Wara demonstrated.

The extent to which HFC projects have contributed to a series of other perverse incentives has since been established in far more detail, with even the European Commission now accepting that they suffer a total lack of environmental integrity.

More fundamentally, though, a better definition of "technology transfer" is needed - and a clearer understanding of the context in which it works, is helpful. Three key points may be raised here.

First, the CDM can serve to disincentivise and delay the passing of environmental regulations.

As the CDM program became active, policymakers realized that the additionality requirement provided incentives to retard the process of creating developing countries’ policy in order to preserve credit eligibility.
-David Drieseen and David Popp

Second, technology transfers through imports by private actors can crowd out domestic industry - as the work of Ha-Joon Chang (eg. the books "Bad Samaritans" and "Kicking away the Ladder") eloquently demonstrates.

Third, the CDM promotes a development model that eclipses local technologies. As Larry Lohmann argues,

'technology transfer' continues to carry the connotation, as it always has, of moving Northern technology into a ‘technology-deprived’ area in the South. In practice, this typically plays out in the degradation, skewing or destruction of one set of technologies in favour of another.

Although Chang and Lohmann appear to be making similar points, the latter engages in a more fundamental critique of the benefits of "development" regimes.