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Climate policy and innova0on
Antoine Dechezleprêtre
‘Paris and Beyond – Pragma1c Climate Policy’ Seminar Series, Oxford, 4 February 2015
Emissions scenarios
Working Group III contribution to the IPCC Fifth Assessment Report
Stabilization of atmospheric GHG concentrations requires moving away from the baseline, regardless of the mitigation goal.
13 Source: IPCC 2014
The challenge
• Stabilizing emissions in 2050 requires 60% reducDon in carbon intensity of GDP (Assuming 2.5% annual GDP growth)
• To achieve long term decarbonizaDon we need a large change in the mix of technology we use (or dramaDc social and cultural changes)
Europe’s Energy Roadmap 2050
6
2013 Technology Map of the European Strategic Energy Technology Plan
The Technology Map 2013 together with the scheduled Joint Research Centre (JRC) report on Energy Technology Reference Indicators (ETRI)1 of SETIS provide up-to-date and impartial information about the current and anticipated future European energy technology portfolio. The two reports provide support to:
• policymakers in strategic decision making and in particular for identifying future priorities for research, development and demonstration (RD&D);
• policymakers in identifying barriers to low-carbon technologies;
• the modelling community by providing a complete overview of the technology, markets, barriers and techno-economic performance, which are required for systemic modelling activities.
Trends since 2011
A comparison of the status of the low-carbon technologies presented in the Technology Map 2011 with the Technology Map 2013 highlights the following distinguishable trends.
• Some types of renewable energy sources (RES) have added significant capacity (e.g.
1 To be published in 2014.
Figures 0.1–0.4: Share of electricity
generation technologies according to the Energy
Roadmap 2050
solar photovoltaics (PV), onshore wind and technologies using biomass), whereas the development is slower for others (e.g. CCS, marine energy and geothermal energy).
• Costs for several low-carbon energy technolo- gies have continued to decline (e.g. onshore wind and solar PV).
• Some low-carbon technologies are not yet competitive as compared to technologies using fossil fuels. This remains a key barrier to their large-scale deployment. Barriers to large-scale implementation of RES technolo-gies have increased in some countries due to reduced financial support. In addition, the very low-carbon emission costs of the EU Emissions Trading System (EU ETS) are disadvantageous for low-carbon technolo-gies versus technologies using fossil fuels.
• The increasing share of variable renewa-bles and their low operating costs reduce electricity costs and stalled investments in conventional fossil-based power production. These could disrupt the grid stability and the security of supply in the longer term if not addressed properly.
• A stable regulatory framework providing a pre-dictable investment environment is needed for most technologies.
Ref. scenario 2005
Div Supply Tech 2050
Ref. scenario 2050
high RES 2050
Nuclear energyConventional thermalCCSBiomass-waste
Hydro WindSolar Geothermal and other renewables
InnovaDon is key
• Climate change miDgaDon requires massive investments in innovaDon 1. Developing new breakthrough technologies
(hydrogen?) 2. Making the transiDon possible with enabling
technologies (smart grids, storage) 3. Reducing the cost of exisDng technologies
(also key to improve the robustness of internaDonal agreements)
Costs of miDgaDon scenarios
Working Group III contribution to the IPCC Fifth Assessment Report
Global costs rise with the ambition of the mitigation goal.
21
Based on Table SPM.2
Source: IPCC 2014
Availability of technology greatly influences miDgaDon costs
Source: IPCC 2014
The innovaDon chain
Source: Grubb, 2014. Planetary Economics Source: Grubb, Hourcade, and Neuhoff. (2014): Planetary Economics: energy, climate change and the three domains of sustainable development. Routledge
Diffusion
POLICYENVIRONMENT‐ taxincentives,subsidies,emissionspricing,regulations
Supply/Research
Demand/Consumers
FrameworkConditions– MacroeconomicStability,Education&Skills,IPProtectionEtc.
Market accumul
ation
Commercial-isation
Demon-stration
Applied R&D
Basic Research
Product/TechnologyPush
MarketPull
Fig.9.5 The Innovation Chain
“Invention” “Innovation” “Diffusion”
Technologies have to traverse a long, expensive and risky chain of innovation to get from idea to market
Market failures at all stages
• Pollu0on externality (carbon emissions induce damages that are not paid for) hampers diffusion
• Knowledge externali0es (innovators are not rewarded for all the benefits of their invenDons) at innovaDon stage
• Learning-‐by-‐doing (early producers generate knowledge through the produc5on process)
• ImperfecDons in capital markets • Lock-‐in / path dependence • Many more: long lived capital, high upfront costs, uncertainty
over future policies, imperfect compeDDon in energy markets, behavioral gaps, regulatory barriers to adopDon…
Policies to get the incenDves right
Fixing the environmental externality
• Climate change policies encourage the adop5on of low carbon technologies
• This in turn incenDvizes innovaDon (induced innova5on)
11
The EU ETS impact on clean innovaDon
• Calel & Dechezleprêtre, 2014. Environmental Policy and Directed Technological Change: Evidence from the European carbon market. Review of Economics and Sta5s5cs, forthcoming
• Empirical analysis of the impact of the EU ETS on low-‐carbon technological change
• Use patents filed with the European Patent Office (EPO) to measure innovaDon
• Use new EPO ‘low carbon patents’ classificaDon
EPO’s low-‐carbon patent class
Share of low-‐carbon patents at EPO
0
1%
2%
3%
4%
Shar
e of
pat
ents
1980 1985 1990 1995 2000 2005Year
Low-carbon innovation
EU ETS
0
1%
2%
3%
4%
Shar
e of
pat
ents
1980 1985 1990 1995 2000 2005Year
Low-carbon innovation
EU ETS
0
20
40
60
80
100
Oil p
rice
(201
0 $)
0
1%
2%
3%
4%
Shar
e of
pat
ents
1980 1985 1990 1995 2000 2005Year
Low-carbon innovation Crude oil price
A consequence of the EU ETS? Impossible d'afficher l'image. Votre ordinateur manque peut-être de mémoire pour ouvrir l'image ou l'image est endommagée. Redémarrez l'ordinateur, puis ouvrez à nouveau le fichier. Si le x rouge est toujours affiché, vous devrez peut-être supprimer l'image avant de la réinsérer.
EU ETS
0
20
40
60
80
100
Oil p
rice
(201
0 $)
0
1%
2%
3%
4%
Shar
e of
pat
ents
1980 1985 1990 1995 2000 2005Year
Low-carbon innovation Crude oil price
A matching analysis
• IdenDfy regulated companies • Compare them with unregulated companies in the same economic sectors and countries, same size, same pre-‐ETS R&D acDvity – Owners of smaller installaDons
• Inclusion rules – “CombusDon of fuels”: annual thermal input > 20 MWh
– Steel: producDon capacity > 2.5 tonnes per hour – Glass & glass fibre: melDng capacity > 20 tonnes per day.
EU ETS
Treated
Control
0
20
40
60
80
Gre
en p
aten
ts
2000 2002 2004 2006 2008Year
Treated (ETS) Control (non ETS)
Low-‐carbon patents: treated (ETS) vs control group (non-‐ETS)
Source: Calel & Dechezleprêtre (2014) Environmental Policy and Directed Technological Change: Evidence from the European carbon market
Emissions pricing works!
• The ETS had a strong impact on low carbon innovaDon by regulated companies • Impact of EU ETS = + 10% low-‐carbon patents • The impact is concentrated at the beginning of Phase 2… when prices were meaningful
18
!!
50!
Figure!5:!Simulations!over!time!of!the!effects!of!increases!in!fuel!price!A:!No!change!in!fuel!price!
!
B:!10%!increase!in!fuel!prices!
!C:!20%!increase!in!fuel!prices!
!
D:!30%!increase!in!fuel!prices!
!E:!40%!increase!in!fuel!prices
!
F:!50%!increase!in!fuel!prices
!Notes:! these!graphs!show!the!simulated!evolution!of! the!aggregate!clean!and!dirty!knowledge!stocks!between!2005!and!2030!depending!on! the!variation! in! fuel!prices.!The!knowledge! stock! is! the!discounted! sum!of!past!patents.! Fuel! prices! are! assumed! to! increase! at! once! in!2005!and! remain! constant! thereafter.! Simulations! are!based!on!CFX!estimations!presented!in!Table!6!columns!(1)!and!(4).!!!
2000
4000
6000
8000
1000
012
000
Know
ledg
e St
ocks
2005 2010 2015 2020 2025 2030year
Clean Knowledge Dirty knowledgePrice increase of 0%
2000
4000
6000
8000
1000
012
000
Know
ledg
e St
ocks
2005 2010 2015 2020 2025 2030year
Clean Knowledge Dirty knowledgePrice increase of 10%
2000
4000
6000
8000
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012
000
Know
ledg
e St
ocks
2005 2010 2015 2020 2025 2030year
Clean Knowledge Dirty knowledgePrice increase of 20%
2000
4000
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012
000
Know
ledg
e St
ocks
2005 2010 2015 2020 2025 2030year
Clean Knowledge Dirty knowledgePrice increase of 30%
2000
4000
6000
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012
000
Know
ledg
e St
ocks
2005 2010 2015 2020 2025 2030year
Clean Knowledge Dirty knowledgePrice increase of 40%
2000
4000
6000
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012
000
Know
ledg
e St
ocks
2005 2010 2015 2020 2025 2030year
Clean Knowledge Dirty knowledgePrice increase of 50%
Source: Aghion et al (2014). Carbon Taxes, Path Dependence and Directed Technical Change: Evidence from the Auto industry. Journal of Poli5cal Economy, forthcoming
Carbon pricing can redirect the economy onto a clean growth path
A key role for mulDlateral policies • The market for technologies is global • Clean policies affect domesDc and foreign innovaDon
• Ex: 100 MW of new wind capacity (= €50M in FiTs) induce – 1 invenDon domesDcally – 2 invenDons abroad Source: Dechezleprêtre & Glachant (2013). Does foreign environmental policy influence domesDc innovaDon? Evidence from the wind industry. Environment and Resource Economics
Ø Large cross-‐border effects
• How important are knowledge spillovers in clean technologies?
• Dechezleprêtre, Mar5n, Mohnen (2014). Knowledge spillovers from clean and dirty technologies
• Compare intensity of spillovers between clean and dirty technologies • 2 sectors: transportaDon and electricity
producDon
Addressing knowledge externaliDes
Dirty Group Clean
Fossil fuel based (coal & gas)
Electricity generation Renewables
Internal combustion vehicles
Automotive Electric, Hybrid, Hydrogen
• Count citaDons made by future patents – Mandatory for inventors to cite "prior art" – Data availability – Technological disaggregaDon
• 1.2 million invenDons filed in 107 patent offices from 1950 to 2005, 3 million citaDons made to these invenDons – World Patent StaDsDcal Database (PATSTAT) @ EU Patent Office
23
Citations to 1000 dirty.... …and 1000 clean innovations
Table 3: Basic results
(1) (2) (3) (4) (5) (6)
Dep. var. Citations received PatentRank
Clean invention 0.398*** 0.392*** 0.430*** 0.267*** 0.264*** 0.292***(0.015) (0.015) (0.014) (0.013) (0.014) (0.014)
Number of patents -0.092*** -0.057*** -0.052*** -0.031***(0.008) (0.007) (0.006) (0.005)
Family size 0.073*** 0.067***(0.004) (0.003)
Triadic 0.456*** 0.241***(0.036) (0.025)
Granted 0.947*** 0.491***(0.031) (0.021)
Patent office-by-year-by-sector yes yes yes yes yes yesMonth fixed effect yes yes yes yes yes yes
Obs. 1,149,988 1,149,988 1,149,988 1,149,988 1,149,988 1,149,988
Notes: Robust standard errors in parentheses (* p<0.05, ** p<0.01, *** p<0.001). The dependent variable is the total numberof citations received excluding self-citations by inventors (columns 1 to 3) and the PatentRank after 20 iterations (columns 4 to6). All columns are estimated by fixed-effects Poisson pseudo-maximum likelihood.
In order to investigate the evolution of the relative intensity of spillovers across time, we run
our estimation for each five years period between 1950 and 2005 and plot the coefficients
obtained for clean invention along with their 95% confidence intervals in Figures 2 and 3.
We find that there has been a clear increase in the clean premium over time.
In Table 4 we present the regressions results for each technology separately. The results are
robust across both sectors, but we find some heterogeneity in the clean coefficient. Clean
inventions in the transportation sector receive 35% more citations than dirty inventions,
while the clean premium in the electricity is larger (49%).
Our strategy is to estimate a simple count data model of the type
C
i
= exp(�Clean
i
+ �X
i
+ ✏
i
) (1)
20
New technology
+43% spillovers +29% spillovers
Spillovers higher in all technologies
Source: Dechezleprêtre et al (2014). Knowledge spillovers from clean and dirty technologies
-0.2
0
0.2
0.4
0.6
0.8
1
1.2
hydro geothermal ocean energy_storage wind solar distribution biomass
Baseline = Coal/gas
!0.3%
!0.2%
!0.1%
0%
0.1%
0.2%
0.3%
0.4%
0.5%
0.6%
Electricity%%dirty%
Car%%dirty%
Biotechs%
Electricity%clean%
Car%clean% Robot%
IT%Nano% 3D%
Baseline = average technology
Spillovers from clean, dirty & emerging technologies
Policy implicaDons Ø Support to clean R&D strongly jusDfied – Public R&D: government support crucial for basic R&D in clean techs (long-‐term payoffs, large uncertainty)
– Support to private R&D: Subsidies to private R&D should reflect the size of external spillovers, which are large for clean technologies
Ø Support on radically clean techs rather than on improvements of dirty techs
Ø If knowledge externality cannot be addressed properly this jusDfies higher emissions pricing
Knowledge spillovers are global
• Globally, 49% of spillovers in clean technologies occur outside of the inventor’s country
• Even more for small open European countries: France 75%, UK 83%, NL 90%
Ø The incen0ves to subsidize R&D are much higher for the world as a whole than for individual countries
Ø This makes mulDlateral cooperaDon on R&D avracDve
29
The economic consequences of switching to clean innovaDon
Marginal Benefits from Clean R&D
Total R&D spending
Marginal Benefits from Dirty R&D
OpDmal dirty R&D OpDmal Clean R&D
Total R&D
Marginal private profit of R&D investor from
dirty R&D
Marginal private (discounted future)
profit of R&D investor from clean R&D Lost profit when
being forced away from opDmum
Gov’t pushing clean
Marginal Benefits from Clean Technology
Total R&D spending
Marginal Benefits from Dirty Technology
Marginal profits of R&D investor and spillover recipients
Marginal profits of R&D investor and spillover recipients
Higher spending on clean can improve social welfare if clean spillovers are
larger than dirty spillovers
Gov’t pushing clean
If Clean > Dirty Spillovers • A policy-‐induced redirecDon of innovaDon from
dirty to clean technologies will reduce the net cost of environmental policies...
• ... and can even lead to higher economic growth • One of the theoreDcal moDvaDons for the Porter
hypothesis [Mohr (2002); Smulders & de Nooij (2003); Hart (2004, 2007); Ricci (2007)]
• For this to happen requires that the knowledge externality is not properly internalized
Conclusions and pracDcal recommendaDons
What we need in Paris
• Long term carbon pricing mechanisms with pledges for sustained R&D support
• CreaDng the demand for technologies through carbon markets/taxes/technology mandates is key (e.g. CCS)
• But gezng prices right is not enough: the market favours lower-‐cost technologies
• Combining demand-‐pull with R&D policies reduces the cost of climate policy (Acemoglu et al. 2012, Acemoglu et al 2014)
• CombinaDon of carbon pricing and R&D support is key for clean to come at the expense of dirty
35
EU 27 public R&D spending in energy technologies (million euros)
36
0
1000
2000
3000
4000
5000
EU27
Pub
lic R
&D e
xpen
ditu
res
1980 1985 1990 1995 2000 2005 2010Year
Source: IEA
Government R&D expenditure in OECD member countries in 2011
2DS, they need to lead the way by taking informed, decisive action that builds confidenceamong the entire network of energy sector stakeholders.
Innovation is central to transforming any established system, whether through novel technicalsolutions or by adapting existing practices to meet new challenges or to work in differentenvironments. Although absolute spending on energy related RD&D has increased, the shareof energy RD&D is not keeping pace with the level of ambition needed to meet long termeconomic, security and climate goals. OECD countries’ spending on energy RD&D has beengenerally decreasing as a share of total research budgets over the past 30 years, asgovernments have preferred other areas of research, such as health, space programmes andgeneral university research.
Figure 1.22 Government R&D expenditure in OECD member countries in 2011
81 bn USDDefence
48 bn USDHealth and environment
49 bn USDGeneral university funds
48 bn USDOther
37 bn USDNon-oriented research
16 bn USDSpace programmes
12 bn USDEnergy
Source: OECD, 2014.
Key point OECD member countries have increased absolute spending on energy related RD&D,but the overall share remains low.
Despite the lessening emphasis on energy innovation, technological development is occurringin all sectors – with efforts towards incremental improvements and new breakthroughtechnologies. 23 With increased ambition, these developments could not only support, but alsoaccelerate the changes needed to decouple social and economic growth from an energydependence that negatively affects the global climate.
ETP analysis reasserts the IEA long-standing message on the importance of establishing theright framework conditions and incentives, including well-designed and predictable RD&Dprogrammes, along with tailored, adaptable market instruments and innovative business modelsto support deployment (IEA, 2012; IEA, 2011). The ability to assess the effectiveness of policymeasures along all the stages of the innovation process is particularly critical (Figure 1.23).
23 Recent technological developments in major energy sectors are captured in Chapter 2.
© OECD/IEA, 2014.
54 Part 1Setting the Scene
Chapter 1The Global Outlook
Public R&D expenditures on energy in GDP in Europe (2011)
0.00%$
0.02%$
0.04%$
0.06%$
0.08%$
0.10%$
0.12%$
0.14%$
Austria$
Belgium$
Czech$Republic$
Denmark$
Finland$
France$
Germany$
Greece$
Hungary$
Ireland$
Italy$
Netherlands$
Poland$
Portugal$
Slovak$Republic$
Spain$
Sweden$
United$Kingdom$
Is this enough?
39
high. Consequently, without the complex political economy it is impossible to understand why different
countries (and even regions) embarked on very different policy mixes.
There are different reasons why it is difficult to analytically identify optimal policy mixes: (i) the different
rationales for renewables support, (ii) the numerous technology options, (iii) the substantial differences in the
initial conditions, (iv) a wide continuum of combinations of support policies. According to Figure 2, countries like
Germany and Italy spent on RD&D less than 0.5 percent of the budget for public support to the deployment of
renewable energy technologies. Thereby, to our knowledge no country applies an ‘analytic’ approach for
determining the policy mix that best suits the rationales. This resembles a ‘shot in the dark’ approach, and its
persistence is astonishing, given the magnitude of the corresponding public spending.
Figure 2: Deployment vs. RD&D expenditure for wind and solar in 2010 in six EU countries (in € millions)
Source: Bruegel calculation based on IEA and datastream.
Note: Net deployment costs are calculated as the difference of the deployment costs10 and the net present value of the future electricity generated11. The
countries are the five largest EU countries (DE,ES,FR,IT,UK) plus the Czech Republic (the largest Central East European country for which we have data)
10 Deployment costs are calculated as the installation costs per MWe multiplied with the deployed capacity. The country-specific costs per MWe are obtained from the "Projected Costs of Generating Electricity 2010" report of the IEA. 11 The net present value of future electricity generated is calculated by discounting future revenues which can be obtained by projecting the yearly energy prices (we use the price of a 2013 futures contract) and production of the respective technology in the respective country (differences across countries arise because of varying hours of sun/wind per year as well as different energy prices). We assume a nominal interest rate of 10 percent.
48298
315
0 10000 20000 30000 40000 50000 60000
RDD Deployment
Source: Zachmann et al 2014
Deployment vs R&D support in renewables Wind + solar, top 6 European countries, 2010 (in M€)
The opDmal spending mix
Fischer, Newell & Preonas 2014: • OpDmal mix is around 1/2 R&D, 1/2 deployment for wind and solar
• Under extreme LBD assumpDon public R&D spending can be down to 10% (solar) – 15% (wind), but not less
Ø Countries overemphasizing deployment
40
RecommendaDonsØ A gradual ramp up of public R&D funding for energy technologies • Supply of researchers fixed in the short run: growth in clean R&D budgets should be slow and steady, allowing Dme for training of researchers
Ø Focus on technologies central to decarbonisaDon that have a strong public good component: energy efficiency, CCS, energy storage, smart grids
Ø Money can come from allowance sales/aucDoning (with safety valve) to provide long-‐term certainty
Technology in the Paris agreement 1. Long term commitments to fund domesDc R&D 2. CoordinaDon of R&D (IEA, EU) – IncenDves to provide R&D lower for individual countries
– Reduce duplicaDve efforts – Make emissions reducDon agreements more sustainable
3. Joint R&D funding (ITER) – However tension between compeDDon and collaboraDon
– Technology issues in the negoDaDons have seen very livle progress unDl now, prospects are low
42
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24
H. Technology development and transfer
General 54. Option 1: All Parties to strengthen cooperative action to promote and enhance technology development and
transfer, including through the Technology Mechanism / institutional arrangements for technology established under the Convention and through the Financial Mechanism, in order to support the implementation of mitigation and adaptation commitments under this agreement; Option 2: Parties, consistent with the principles and provisions of the Convention, including Article 4, paragraphs 1, 3 and 5, / in accordance with their common but differentiated responsibilities, to strengthen cooperative action to promote and enhance technology development and transfer and better facilitate the implementation of the Convention, including through the Technology Mechanism / institutional arrangements for technology established under the Convention and through the Financial Mechanism / by enhancing the provision of support by developed country Parties, in order to support the implementation of mitigation and adaptation commitments under this agreement; Option 3: Parties, consistent with the principles and provisions of the Convention, including Article 4, paragraph 5, reflecting the evolving economic realities, to strengthen cooperative action to promote and enhance technology development and transfer, including through the Technology Mechanism / institutional arrangements for technology established under the Convention and through the Financial Mechanism.
55. Placeholder: Global goal on enhanced action on technology development and transfer.
Commitments 56. Option 1: Commitments in relation to technology development and transfer to include the following:
56.1 Developed country Parties to undertake steps to address barriers to accessing technology and to establish and strengthen their necessary policy frameworks to facilitate the removal of barriers and enable and accelerate technology development and transfer to developing country Parties; and to leverage enhanced support from the private sector for technology development and transfer to developing country Parties; and to provide financial, human resources, institutional and technical support for technology development and transfer to developing country Parties;
56.2 Developing country Parties, with the support of developed country Parties, to undertake steps to address barriers to accessing technology and to establish and strengthen their national structures, policy frameworks, institutions and capacity, in order to enable and accelerate the endogenous capacity for the absorption, development and transfer of technologies in developing countries / endogenous technology development and transfer, attract investments and enhance country ownership and innovation;
56.3 All Parties, in accordance with the principles of and obligations under the Convention, to establish means to facilitate access to and the deployment of technology, while promoting and rewarding innovation in adaptation and mitigation technologies / environmentally sound technologies:
Option (a):
a. In accordance with Article 4 of Convention, developed country Parties to provide financial resources to address barriers caused by intellectual property rights (IPRs) and facilitate access to and the deployment of technology, including inter alia, by utilizing the Financial Mechanism and/or the establishment of a funding window under the GCF / the operating entities of the Financial Mechanism;
b. An international mechanism on IPRs to be established to facilitate access to and the deployment of technology to developing country Parties;
c. Other arrangements to be established to address IPRs, such as collaborative research and development, shareware, commitments related to humanitarian or preferential licensing, fully paid-up or joint licensing schemes, preferential rates and patent pools.
Option (b): Parties recognize that IPRs create an enabling environment for the promotion of technology innovation in environmentally sound technologies;
Option (c): IPRs are not to be addressed in this agreement.
56.4 Developing country Parties, with the support of developed country Parties, to conduct an assessment of their technology needs, on the basis of national circumstances and priorities, with a view to ensuring nationally
Advance unedited version
25
determined and environmentally, economically and socially sound resulting project proposals and to effectively implementing the outcomes of such an assessment supported by developed country Parties, order to support the implementation of this agreement:
x Parties to strengthen the process of technology needs assessment (TNAs) and enhance the implementation of the outcomes of the TNA process;
x Align TNAs more closely with bankable finance projects / Improve TNAs to result in implementable projects; x TNAs could be linked to other processes under the Convention, such as NAMAs and NAPs; TNA process should
be elaborated to address developments arising from the operationalization of this agreement. 56.5 All Parties, enabled by Annex II Parties / led by developed country Parties, to accelerate global collaboration
on the research, development and demonstration of technologies: a. Support, including financial and intellectual support, to accelerate the research, development and demonstration
of technologies, including endogenous technologies, to be provided by developed country Parties to developing country Parties;
b. Modalities for a global collaborative programme on the research, development and demonstration of technologies to be established, attracting and integrating relevant stakeholders.
Option 2: No commitments on technology in the agreement.
Institutional arrangements 57. Institutional arrangements for technology development and transfer under the Convention shall support Parties in
implementing their commitments / contributions under this agreement: 57.1 Anchoring:
Option 1: The Technology Mechanism established under the Convention, including the Technology Executive Committee (TEC) and the Climate Technology Centre and Network (CTCN), shall serve this agreement by facilitating enhanced action on technology development and transfer in order to achieve the objectives of this agreement;
Option 2: The institutional arrangements for technology established under the Convention shall serve this agreement by facilitating enhanced action on technology development and transfer in order to achieve the objectives of this agreement.
57.2 Guidance to and strengthening of the Technology Mechanism / institutional arrangements:
The governing body may provide further guidance to and/or strengthen the Technology Mechanism / institutional arrangements for technology established under the Convention serving this agreement, and the guidance provided by the governing body shall not conflict with the guidance provided by the COP.
Option 1: Specific provisions on strengthening:
a. The TEC and the CTCN / Technology Mechanism of the Convention shall support the operationalization and delivery of the commitments related to technology development and transfer in this agreement, under the Convention: x Include provisions on accounting; x Take into account the specific needs of developing countries and countries with special circumstances of Africa,
LDCs and SIDS. b. The Technology Mechanism shall enhance cooperation and synergy with other institutional arrangements
under and outside the Convention and stakeholders, as well as the coherence and effectiveness of technology action and initiatives under the Convention: x Establish linkages between the Technology Mechanism, the Financial Mechanism and capacity-building
institutions; x The Poznan strategic programme on technology transfer to be linked to and/or guided by the Technology
Mechanism; x Provisions or measures related to other technology initiatives or regional centres; x Enhance the role of the private sector to support the implementation of the Technology Mechanism;
The Lima AcDon Plan
“Commitments in relaDon to technology development and transfer” – Op0on 1
The Lima AcDon Plan
“Commitments in relaDon to technology development and transfer” – Op0on 2
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25
determined and environmentally, economically and socially sound resulting project proposals and to effectively implementing the outcomes of such an assessment supported by developed country Parties, order to support the implementation of this agreement:
x Parties to strengthen the process of technology needs assessment (TNAs) and enhance the implementation of the outcomes of the TNA process;
x Align TNAs more closely with bankable finance projects / Improve TNAs to result in implementable projects; x TNAs could be linked to other processes under the Convention, such as NAMAs and NAPs; TNA process should
be elaborated to address developments arising from the operationalization of this agreement. 56.5 All Parties, enabled by Annex II Parties / led by developed country Parties, to accelerate global collaboration
on the research, development and demonstration of technologies: a. Support, including financial and intellectual support, to accelerate the research, development and demonstration
of technologies, including endogenous technologies, to be provided by developed country Parties to developing country Parties;
b. Modalities for a global collaborative programme on the research, development and demonstration of technologies to be established, attracting and integrating relevant stakeholders.
Option 2: No commitments on technology in the agreement.
Institutional arrangements 57. Institutional arrangements for technology development and transfer under the Convention shall support Parties in
implementing their commitments / contributions under this agreement: 57.1 Anchoring:
Option 1: The Technology Mechanism established under the Convention, including the Technology Executive Committee (TEC) and the Climate Technology Centre and Network (CTCN), shall serve this agreement by facilitating enhanced action on technology development and transfer in order to achieve the objectives of this agreement;
Option 2: The institutional arrangements for technology established under the Convention shall serve this agreement by facilitating enhanced action on technology development and transfer in order to achieve the objectives of this agreement.
57.2 Guidance to and strengthening of the Technology Mechanism / institutional arrangements:
The governing body may provide further guidance to and/or strengthen the Technology Mechanism / institutional arrangements for technology established under the Convention serving this agreement, and the guidance provided by the governing body shall not conflict with the guidance provided by the COP.
Option 1: Specific provisions on strengthening:
a. The TEC and the CTCN / Technology Mechanism of the Convention shall support the operationalization and delivery of the commitments related to technology development and transfer in this agreement, under the Convention: x Include provisions on accounting; x Take into account the specific needs of developing countries and countries with special circumstances of Africa,
LDCs and SIDS. b. The Technology Mechanism shall enhance cooperation and synergy with other institutional arrangements
under and outside the Convention and stakeholders, as well as the coherence and effectiveness of technology action and initiatives under the Convention: x Establish linkages between the Technology Mechanism, the Financial Mechanism and capacity-building
institutions; x The Poznan strategic programme on technology transfer to be linked to and/or guided by the Technology
Mechanism; x Provisions or measures related to other technology initiatives or regional centres; x Enhance the role of the private sector to support the implementation of the Technology Mechanism;
