This report from the University of Sussex and Tsinghua University in China analyses technology transfer from international sources in the context of broader processes of low carbon innovation in China. It does so by focusing on four empirical case studies of low carbon innovation in China: energy efficiency in the cement industry, electric vehicles, offshore wind power and more efficient coal-fired power generation.The report reaches six main conclusions:
1. There are important differences between low carbon technologies in China.
Therefore a ‘one size fits all’ approach to supporting low carbon innovation is inappropriate. Chinese technological capabilities are stronger in more nearmarket technologies than they are in more early stage technologies
2. The case of China is unique, and should not be used as a proxy for developing countries in general. Whilst China still faces many development challenges, China has significant resources and a large potential market for foreign suppliers.
The Chinese government has played a central role in supporting low carbon innovation and technology deployment.
3. A range of policy mechanisms are used to promote low carbon innovation in China, with an emphasis on regulations and targets. Appropriate policies differ between technologies. We support the Chinese government’s intention to increase the use of market based instruments alongside regulatory approaches.
4. Chinese firms and institutions are developing their capabilities rapidly, but significant gaps remain. These capabilities have been acquired through indigenous innovation and international technology transfer. Limitations include access to advanced component technologies and knowledge, and some weaknesses in engineering and design skills.
5. Access to intellectual property rights (IPRs) is not a fundamental barrier to the development of low carbon innovation capabilities in China. This does not mean that IPR issues are unimportant since Chinese firms do not yet have independent capabilities in some technologies. IPR issues, and the need for policy intervention, should be evaluated on case by case basis.
6. International policy frameworks have played an important role in low carbon innovation. The Clean Development Mechanism has been used strategically by the Chinese government to provide significant finance for technology deployment.
The report considers implications for the Climate Technology Centre
Network that are being established under the UNFCCC. The role of the Network will be particularly important, and it should work with existing institutions in developing countries. The experience of China suggests that a full range of functions should fall within the remit of the CTC and Network. These could include investment support, policy advice, collaborative R,D&D and knowledge development. Within these activities, it will be important to take account of national, sectoral and market differences. Implementation should be informed by learning from programmes with similar aims such as the GEF and the World Bank Climate Investment Funds.