THE magnitude of the technology challenge in moving towards a low-carbon climate resilient future is considerable. To meet the two degree target, the world needs to decarbonize at an annual rate of between 4 and 10 per cent from now on, depending on population and economic growth assumptions. Historically, only a few countries, such as Sweden and France, have been able to decarbonize at these rates and this has been accomplished by more rapid deployment of non-fossil electricity generation – hydropower in the case of Sweden and nuclear in the case of France. Global rates have been much lower (about 1.3% over 2000-2013). The more rapid (approximately 2%) decrease rate for most western economies in recent years is inflated due to a decreasing manufacturing sector and concomitant increased imports.

Most IPCC scenarios that leave decarbonization to later dates require negative emissions relying on carbon capture and sink technologies that currently show no prospect of being commercially deployable. Other, more proven non-fossil energy technologies such as nuclear or renewables are expensive and often not affordable by poorer countries. However, rapid decarbonization will require improvement and innovation in precisely these technologies – and therein lies the challenge facing a technology agenda for climate response.

Despite widespread agreement about the importance of technology, and the presence of a number of innovative proposals in earlier versions of the negotiating text, the final form of the Paris Agreement is relatively modest and unambitious with regard to technology. For the most part it relies on the Convention’s existing technology mechanism, including the TEC and the CTCN.

On the positive side, it does place a new focus on innovation as ‘critical for an effective, long-term global response to climate change.’ It commits the UNFCCC’s technology and financial bodies to support R&D and developing countries’ access to technology, ‘in particular for early stages of the technology cycle.’

Perhaps potentially of equal significance are related initiatives launched at Paris, such as Mission Innovation and the Breakthrough Energy Coalition. The relationship of these initiatives with the formal multilateral process remains a key question for the road ahead from Paris.

 

As we consider the role of technology for achieving an ambitious and equitable global response to climate change, four key issues will need to be considered:

Accelerating action across the entire technology cycle: In order to realize the full potential of technology, it will be important to work towards coordinated action across the entire technology cycle – from basic and applied research to technology development and deployment. In much of the developing world, however, national innovation systems are weak and not well developed. Given that these emerging markets may well be the first point of market entry for many technologies, it is necessary to think of downstream market and commercialization linkages, in addition to upstream investments in research and development. While an approach such as the DoE’s SunShot initiative that emphasizes applied R&D may be appropriate for countries like the US where there is a mature innovation ecosystem that can move new technologies into the market, additional and complementary interventions will be needed in developing countries where these linkages are not well established.

The clean energy transition is more than just a product transition: Energy technologies are not just isolated physical artifacts, but complex socio-technical regimes that include hardware (devices, equipment, etc.), software (awareness, information, know-how, etc.), human resources (quality and quantity), financial resources, and enabling environments (regulatory frameworks, institutional arrangements, infrastructure). Consequently, the challenge of decarbonization is more than replacing one product technology by another – it involves changing an entire socio-technical regime or system. An all-electric transport future, for instance, will involve a change of not only the hardware in terms of the drive train of automobiles or batteries but also the rest of the ecosystem which include a range of ancillary businesses that have evolved around a particular technology system of a combination of gasoline and the internal combustion engines. For example, will fuelling stations become battery replacement stops?

 

Heterogeneity and variety are key for the clean energy transition: Moving to a low-carbon future will likely need an ‘all of the above’ approach – there is no single technology silver bullet. Unlike in the case of the Montreal Protocol where the challenge was finding and deploying a substitute for a specific product, carbon is deeply embedded into our entire economic fabric. In the absence of a single technological solution, the technology and innovation architecture needs to encourage experimentation, heterogeneity and variety. For example, what sorts of renewable energy technologies will replace centralized fossil based electricity generation? Centralized or distributed?

In many situations, distributed solar thermal with combined heat and power may be more attractive than centralized PV. Hybrid renewable energy solutions often have better economics than those that rely on a single source. Further, solutions may need to be customized, and the process of customization and localization itself may generate indirect economic benefits beyond the direct benefit of electrification. For example, in a country like India, there may be interesting possibilities for connecting renewable energy technologies with rural industries. And so, simply replacing 500 mw coal power plants by the equivalent of utility scale solar PV might potentially miss out on a much larger opportunity for connecting the energy agenda with the rural economic development agenda.

 

Ensuring equitable distribution of not just the costs, but also the benefits of the clean energy transition (the political economy of decarbonization): The transition to a clean energy future is creative destruction in its fullest sense which means that there will be winners and losers. While there is much talk about the environmental benefits of clean energy, from a developing country perspective, the question about the distribution of the costs and benefits of this transition and particularly the economic returns remains. It is important to remember that resource rents fuelled much of the wealth creation in the early days of the 20th century, though in many countries it was as much of a resource curse as a resource blessing.

Of course, in the case of the clean energy transition, resource rents will be replaced by knowledge rents because the exploitation of renewable resources requires technology, while the resource itself is essentially free. Among other aspects, this increases the importance of IP. The question then is to whom do these returns accrue? Will the economic returns reinforce the current inequalities in distribution of wealth across and within countries? Or, can the transition also lead to a greater democratization and sharing of the returns from the transition?

 

Even as we work towards addressing the key issues mentioned above, a good starting point might be to identify practical next steps that can build on current initiatives, and which address some important constraints and barriers. Five specific ideas might form the core of a near-term agenda for technology in the implementation of the Paris Agreement:

1. Mission Innovation is a welcome step, but how can the domestic R&D efforts in different countries be connected and linked to accelerate the technology cycle, both with regard to R&D as well as eventual commercialization? Can the multilateral process support joint development or collaborative technology development?

2. Scaling up existing technology cooperation mechanisms: After a careful review and assessment of lessons learnt, existing bilateral mechanisms such as the US-India Joint Clean Energy R&D Centre (JCERDC) could be scaled-up and potentially adapted to a multilateral setting. For example, can these collaborative development projects have stronger application/commercialization prospects, perhaps by setting specific technology goals/deliverables? Can these projects address a broad range of technology areas? How can the private sector be most effectively engaged in these collaborative projects?

3. Adapting and adopting existing mechanisms for the multilateral process: There are mechanisms for collaborative R&D and early stage technology development that include strong private sector participation that could be examined and adapted/supported under the multilateral process. Examples include models such as the US-Israel BIRD Foundation, which funds joint industry-industry collaborative projects that are closer towards commercialization.

4. Finding creative solutions/approaches for IPR issues: IPR is often the ‘third rail’ of international negotiations, as there are some countries that are completely allergic to any mention of it. However, in practice, there are many situations where it is necessary to find approaches that better balance public benefits versus private returns, such as in healthcare. Compulsory licensing, march-in rights and patent pools are all examples of approaches that try and safeguard returns to innovators while ensuring that society benefits from the new technologies. For example, patent pools have been used in sectors ranging from manufacturing to electronics (MPEG) to biotechnology, including situations where the government has at least partly funded their creation. It may be worth exploring whether the multilateral process could support the creation of suitable patent pools in specific areas of clean energy (such as energy storage), perhaps by combining public and private and national and multilateral finance. If a private company like Tesla can make its IP available in order to grow the market; surely it should be possible to devise mechanisms to enhance access to clean energy technologies for commercialization and find ways of balancing private returns to the inventor with the public (and global) benefits of clean energy technologies.

5. Making the current trade regime more climate friendly: Given the overriding global benefits of more rapid mitigation, we need to ensure that the current rules and governance process of global trade do not act as a constraint or barrier for low-carbon technology deployment. In this regard it may be helpful to create a ‘green box’, where environmentally sustainable technologies are regarded as ‘public goods’ and where countries agree to not pursue trade disputes in the larger global interest.