Technology and Finance for a Low-Carbon Society
To achieve LCSs in Asia as rapidly as possible, existing low-carbon technologies must be deployed and commercialized, and innovative new technologies must be developed. For these things to happen, national governments need to establish an environment for the industrial sector to invest with confidence in innovative research. They also need to create frameworks in Asia at the regional level in which each country's private sector can develop efficient technologies that will play a key role in the development of low-carbon products and deliver these products to the general public. At the present time, however, many institutional, economic, financial, and technological barriers exist that are preventing technology transfer and technology diffusion. Many studies in Asia have found that these barriers differ significantly by country and technology.
In China, India, and Thailand, for example, technologies such as wind power and
bioenergy electricity production that are ready for diffusion and technology transfer for commercial use may encounter such barriers as high patent acquisition costs or a lack of local expertise with regard to imported technologies and lack of know-how and skills for their operation and maintenance. For technologies such as LED lighting or photovoltaics that are ready for diffusion and technology transfer for business or consumer use, the barriers may be the small size of the market and an exceedingly small amount of investment from overseas. Because these barriers differ depending on the stage of technological development, level of diffusion, or stage of technology transfer, governments need to consider what funding, technology policies, and support programs might be required, depending on the stage of the technology life cycle. They also need to implement this in collaboration with the private sector and the relevant international bodies.
The pool of private sector funding available holds the key to the early transfer and spread of low-carbon technologies. In the past, under the UN Framework Convention on Climate Change (UNFCCC) and the Kyoto Protocol, the Global Environment Facility acted as an interim funding institution, providing funding to developing countries. After three funds were set up (the Special Climate Change Fund, the Least Developed Countries Fund, and the Adaptation Fund), however, many issues arose including a shortage of funds and the need to determine priorities for the limited funds available. To overcome this situation, the Green Climate Fund was established in 2010 under the Copenhagen Accord of 2009, and it was stipulated that developed countries were to supply 100 billion US dollars every year until 2020. However, this amount represents a huge jump in public funding, and the search is still on to find ways to secure the funds. Exacerbating this situation is the disappointing progress of multilateral negotiations under the UNFCCC. Because urgency is required in the Asian region – as it is undergoing rapid economic development – it is necessary to consider ways to procure funds especially in this region, without waiting for further progress in multilateral negotiations. Past levels of aid from developed to developing countries cannot meet the level of funding required for the spread of technologies and products. In addition to the funding provided by developed countries under the UNFCCC and official development assistance, there is a need to find ways to mobilize diverse sources of public and private funding in the Asian region.