An introduction to technology-oriented agreements

1
An introduction to technology-oriented agreements

• Heleen de Coninck (ECN/IVM)
• ECN side-event COP13 December 7th, 2007

2
Background status post-2012

• Agreement to agree. But on what?
• EU continues on cap-and-trade track
• United States might not sign up to an
  international carbon cap
• US Congress difficulty to agree on meaningful
  climate act
• US Senate not favourable to cap-and-trade
  (filibustering)
• Emerging economies no strict commitments
• A post-2012 treaty a la Kyoto with broad Annex-I
  participation unlikely
• Complex patchwork of treaties more conducive,
  including cap-and-trade, sectoral and technology
  agreements
• Question
• What can we expect from sectoral and technology
  agreements?

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Alternative or complement to cap-and-trade?

• Disinterest in cap-and-trade can be explained for
  countries with low climate change impacts and
  high mitigation costs
• Provision of a global public good free-rider
  incentives
• Sectoral agreements (IEA, Pew Center) and TOAs
  might provide participation incentives
• Predictable costs
• Innovation market failure
• Potentially smaller number of parties (club good)
• Interests of current technology leaders
  (first-mover advantage)
• and large developing countries (targeted and more
  effective technology transfer)

4
Context and forms of TOAs

• International agreements that are aimed at
  advancing specific technologies
• Four types
• Knowledge sharing and coordination
• Research, development and demonstration
• Technology transfer
• Technology mandates, standards and incentives

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Context and forms of TOAs
Type 1 Knowledge sharing and coordination Carbon Sequestration Leadership Forum (CSLF) and the International Platform on the Hydrogen Economy (IPHE) Methane to Markets Partnership (M2M) Task sharing within IEA Implementing Agreements (IEA-IA) Asia-Pacific Partnership on Clean Development and Climate (APP) Energy Star bilateral agreements
Type 2 RDD European Organization for Nuclear Research (CERN) ITER fusion reactor Cost sharing within IEA Implementing Agreements (IEA-IA) The Solvent Refined Coal II Demonstration Project (SRC-II)
Type 3 Technology transfer Multilateral Fund under the Montreal Protocol Global Environment Facility (GEF)
Type 4 Technology incentives, mandates, standards International Convention for the Prevention of Pollution from Ships (MARPOL) European Union Renewables Directive
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Context and forms of TOAs - conclusions

• Knowledge sharing and coordination, and RDD
  (Types 1 and 2) not environmentally effective on
  their own, but can be useful for low-cost or
  underdeveloped technologies
• Technology transfer agreements (Type 3) can be
  effective if substantial funds committed, but
  unlikely to be sufficient in scope on their own
• Technology incentives, mandates and standards
  (Type 4) can be environmentally effective on
  their own, although in most cases less
  cost-effective than cap-and-trade approaches

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Context and forms of TOAs - conclusions

• Type-4 agreements may be more effective for
• Sectors with significant ancillary benefits
• Highly trade-sensitive sectors
• Sectors not covered by cap-and-trade systems
• Sectors that might benefit from international
  coordination

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Conclusions

• Technology-oriented agreements can take many
  forms and can be appealing for different reasons,
  e.g. more manageable number of actors, greater
  cost predictability, innovation benefits, large
  emission reductions
• It makes sense to explore TOAs, as they may offer
  political advantages
• However, global cost-effectiveness and simplicity
  of one global cap-and-trade are sacrificed
• In order to be environmentally effective, TOAs
  should primarily be aimed at technological
  implementation (Type-4)
• It is possible to pursue such agreements without
  straying from the cap-and-trade track

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Thank you

• More information and report copies
• Heleen de Coninck
• Energy research Centre of the Netherlands
• Unit Policy Studies
• Radarport 60/P.O.Box 56890
• 1040 AW Amsterdam
• deconinck_at_ecn.nl
• Tel. [phone]