Quick Win No. 9
Support the green energy transition through technology transfer
Across the globe, governments are increasingly confronting the urgent challenge of combating climate change. The green transition is essential to tackle this challenge and necessitates wide scale innovation and dissemination of advanced clean technologies. While the clean tech boom is underway, many developing countries are struggling to keep pace. The WTO is uniquely positioned to facilitate technology transfer by leveraging its existing frameworks and enhancing international cooperation with existing initiatives, such as those of the UNFCCC.
The development of green technology required to abate climate change is a costly and risky venture. Once a technology is operationally viable, it requires deployment on a global scale to effectively address climate change. In its 2023 World Energy Outlook the International Energy Agency (IEA) highlights that investment in clean energy has increased 40% since 2020. However, research, accelerated development, and dissemination of clean technologies across developed and developing economies require additional incentives to support private sector investment in these areas. Initiatives like the WTO IFD Agreement could foster transparent, efficient, and predictable regulatory environments to encourage more foreign direct investment in clean technology in developing countries.
Additionally, reducing trade barriers on green technologies, such as solar panels, wind turbines, and hydropower equipment, will allow these technologies to be more widely accessible. While negotiations for an Environmental Goods Agreement (EGA) were suspended in 2016, recent initiatives such as the Agreement on Climate Change, Trade and Sustainability (ACCTS) and the on-going dialogue under TESSD may reinvigorate those discussions. The ACCTS may even provide a model for WTO members moving forward. Efforts to reduce barriers to trade in environmental goods should be supported by packages of financial and technical assistance, linked to broader technology transfer initiatives.
Intellectual property (IP) rights also play a crucial role in fostering innovation and the dissemination of clean technologies. The WTO Working Group on Trade and Transfer of Technology was created in 2001, but to date has lacked direction and tangible action. In 2023, developing countries, including the African Group and India, introduced new proposals to organize discussions and focus on environmental technologies. However, members have not yet reached consensus on how to reinvigorate these discussions and increase flows of technology to developing countries. Given the widening technological gap, developing countries should continue pushing for technology transfer to be a priority within the WTO. Key areas of focus should include enhancing transparency in IP disclosure, harmonization of IP regulatory regimes, and enforcement rights and procedures among members, as well as technical assistance and capacity building.
Furthermore, the WTO should align these initiatives with its other institutional efforts, such as the Aid for Trade program, and connect them with existing initiatives under the climate change regime, like the UNFCCC’s Technology Transfer Mechanism. In this way, the initiatives and frameworks of the WTO combined with international cooperative efforts can be harnessed to increase clean technology transfer, support the green energy transition, and assist in meeting the climate change challenge.
