If transfer of clean technology from industrialised countries to developing countries is one of the main issues holding up progress in climate change talks in Copenhagen, it’s not without reason. Though it holds the key to reducing planet warming greenhouse gas emissions, it’s expensive. A wide array of technological solutions are either in the offing or are being practiced already. These range from lab ideas on geo-engineering to pilot projects of carbon capture and storage (CCS) to time tested environmental products and services.
Geo-engineering can be done by pumping sulphates in the stratosphere to reflect sunrays into the space, thereby allowing the earths atmosphere to cool down. An alternative is to set up trillions of transparent sunshades in the space to refract sunrays.
One doesn’t necessarily have to go into the space to fight climate change. It can be fought in deserts and oceans, too. While deserts offer an opportunity to be surface dressed in shining plastic to reflect sunrays, oceans are fertile bases for growing phytoplankton for absorbing carbon dioxide during photosynthesis.
Growing genetically engineered trees, which are carbon neutral, can help in fighting climate change.
An alternative is to do the opposite and burn trees to make charcoal or biochar and for storing in the earth to lock away carbon.
While geo-engineering is futuristic, CCS pilot projects are under study in industrialised countries. As the term suggests, CCS is about capturing carbon emissions from power plants for sequestering in the earth. The technology can cut CO2 emissions from coal-based power plants by up to 90%.
“It may take five to six years for the technology to be demonstrated and deployed on a large scale and another five years for testing successful storage,” says Malti Goel, a former adviser to the science and technology ministry. She tracks the progress in CCS closely. Besides, it may cost billions of dollars to retrofit existing power plants, which still have a reasonable life span. McKinsey has estimated the CCS cost at $90-135 for every tonne of carbon dioxide. The next step after successful demonstration would be transfer and deployment of such technologies in developing countries.
The transfer of clean technology from industrialised countries to developing countries is required under the United Nations Framework Convention on Climate Change (UNFCCC). While the UNFCCC asks all countries to engage in development and deployment of clean technologies, it urges industrialised countries in particular to enable and fund the transfer of clean technologies to developing countries.
Similarly, the Kyoto Protocol to the convention has promoted technology transfer under its clean development mechanism (CDM) by putting in place a legal framework and creating a market to help industrialised countries meet their emission reduction targets by investing in clean projects in developing countries.
In Copenhagen, technology transfer proposals on the table range from setting up new funds for development or acquisition of clean technology. A venture fund has been also proposed for incubation of emerging climate technologies. Besides, there have been calls for undertaking technology needs assessment and collaborative R&D in developing countries to identify and develop appropriate technologies.
Developing countries have even sought preferential access to intellectual property rights as in the case of HIV/AIDS drugs. But investors are in favour of respecting IPRs. This would also help in protecting the interests of Indian businesses going abroad. “Protecting intellectual property is paramount not only in the context of the current climate change talks, but in general,” says Mohanjit Jolly, executive director, Draper Fisher Jurvetson India, a leading venture capitalist.
There are also proposals that promote the concept of centres of excellence. For example, the Indian proposal for setting up climate innovation centres calls for support to develop adaptive and mitigation technologies. These centres could be located in such a way that they would work on local problems and come up with appropriate solutions and undertake capacity building to ensure absorption. Funding could be shared between industrialised and host countries. Their aim would be to engage in collaborative research between industrialised and developing countries by bringing together academics and industry together.
For the time being, the uncertainty in Copenhagen over technology development and transfer will continue in the backdrop of other larger contentious issues like who takes how much emission reduction cuts and who pays how much.
Questions abound. Whether there will be a political declaration on fighting climate change or a legally binding agreement on reducing planet warming greenhouse gas emissions? If there is a legal agreement, will it be signed at the end of the conference in Copenhagen or in June or December next year? Will the 200-page negotiating text get squeezed into 30 pages for more than 100 heads of states to sign on or not? Will the European Union stick to reducing its emissions by 20% by 2020 on a baseline of 1990 or peep their promise of going up to 30% if other countries reciprocate? Will China and India stick to voluntary emission intensity cuts of 40-45% and 20-25% respectively or consider legally binding commitments? Will the US improve upon its provisional offer of reducing emissions by 17% by 2020 on a baseline of 2005? Will the global baseline continue to be 1990 as in Kyoto Protocol or become 2005? Will industrialised countries begin with an annual clean energy fund of $10 billion or also commit to provide $100 billion annually by 2020 to developing countries?
Amongst all these uncertainties, there is one certainty. “There is going to be more global action to reduce the emission of greenhouse gases. It all means there will be a bigger role for technology in fighting climate change,” says Seema Arora, head, CII-ITC Centre of Excellence for Sustainable Development.
While policy clarity would help businesses to make long term investments and plan over a longer term to leverage costs, a look at the current market points that its not necessary for businesses to wait. There is a lot up for grabs even by continuing business as usual and helping in reducing emissions.
The world market is already flooded with a range of clean technologies. The low-carbon and environmental goods and services sector includes traditional environmental activities like technological fixes for air, water and land pollution, renewable energy technologies for biomass, small hydro, wind, solar, geothermal and tidal power, and emerging low-carbon activities like sustainable construction, transport and energy management. More recent low-carbon segment additions include carbon capture and storage, and carbon trading, according to a British government report, Low Carbon and Environmental Goods and Services (LCEGS): An Industry Analysis.
LCEGS industry was valued at over 3,000 billion in 2007-08. The biggest market was in Asia and Far East followed by the Americas, Europe and Africa. A closer look reveals that North America and the Far East share half of the world market. Among countries, the US is the leader with a market share of 20.61%, followed by China at 13.47%, Japan at 6.26% and India at 6.26%. These four countries constitute about half of the world market.
In terms of categories, 21.6% of the market share went to traditional environmental activities, 31% to renewable energy and 47.5% to emerging low-carbon activities in 2007-08. Alternative fuels, building technologies, wind power and alternative fuels for vehicles have cornered bigger marketshare among products and services.
The broader pointers for Indian businesses are clear. The biggest opportunities lie in North America and the Far East. Indian companies can also focus on their core strengths. For example, India is the seventh largest maker of solar PV systems. The potential is likely to increase with the unveiling of the National Solar Mission, which seeks to install 20,000 MW by 2012. “The rapid scale up is expected to bring down costs and give Indian industry a competitive edge globally,” says Jagat S Jawa, director-general, Solar Energy Society of India.
Similarly, while India has the fifth largest wind energy capacity, Suzlon Energy is the worlds fifth largest turbine manufacturer with over 12% market share. “It’s not only time for wind energy companies to follow suit, but also explore offshore wind energy market,” adds Venkittu Sundaram, country head, Epuron Renewable Energy.
Indian companies can also consolidate their lead in carbon trading, building on their high success so far. Indian CDM projects have the potential to reduce 615 million metric tonnes of CO2 equivalent and earn Certified Emission Reduction (CER) certificates worth more than $6 billion by 2012. Environment minister Jairam Ramesh has already called for joint implementation of CDM projects in Saarc countries.
India can also leverage its ICT strengths in clean technology. The use of ICT-enabled solutions have the potential to help cut global emissions across sectors by 15% from business as usual scenario in 2020.
“More importantly, it’s time to promote homegrown technologies abroad,” says Mano Upadhyay, managing director, Acme Telepower. Acme is using indigenously manufactured components like boilers, turbines and microprocessors in setting up its first solar thermal plant in Rajasthan. He says that India can easily leverage its human and intellectual capital to export clean technologies at competitive rates.
Considering that the LCEGS market worldwide recorded growth of 4% in 2007-08, it should only increase after the governments world over have pumped $430 billion from their fiscal stimulus packages into climate change initiatives, as calculated by HSBC. So, irrespective of what happens in Copenhagen, companies driven by low carbon and environmental technologies need to keep on pushing ahead. They should have a bright future even if they pursue the current growth trajectory. Any positive outcome in Copenhagen can be treated as a bonus.
Source: The Financial Express
Published on 15 December 2009