Tuesday 4 December 2007

Bali blog no. 1: Technology transfer - what China wants

“This is a negotiation about a negotiation about a negotiation” - Cedric Philibert's take on Bali today. Philibert coordinates the Energy Efficiency and Environment Division at the International Energy Agency based in Paris.

Forget substance, he says, the negotiations today about technology transfer are discussions about the nature of future negotiations, not about the technologies themselves.

Political talks over tech transfer can be broken down as such: low carbon technology transfer is currently included in Kyoto as a voluntary initiative. Industrialised countries are encouraged, under the agreement, to give technological advice to less developed countries.

Today China is looking to move the tech transfer debate forwards. China suggests that post-2012 talks should include a debate about whether to make technology transfer a mandatory obligation for developed countries.

What's so important about transfering technology to developing countries? I ask this question to Sun Guoshun, a director at the ministry of Foreign Affairs in China. He says China needs clean coal technology and IGCC (Integrated Gasification Combined Cycle) a process which improves the energy efficiency of coal fired plants. In IGCC, the gasification process produces syngas and capturable heat from high-sulphur coal. Carbon dioxide emissions from IGCC plants are supposed to be easier to capture and store than emissions from regular coal plants.

According to Guoshun, the US won't pass on IGCC technology (which is still in its infantile stages of use in the US) because of fears that the technology could be used to produce missiles.

Despite a lot of talk in Europe and the US about transferring carbon capture and storage (CCS) technology to China, Guoshun says China isn't interested in CCS yet. He describes it as an "unproven technology" and says it's currently "too expensive". "Building a plant with carbon capture and storage would cost 30% more and the CCS process would take up 30% of the energy produced by the plant... it wouldn't be sustainable for China", he says.

When i ask him about the problems posed by intellectual property rights on new low carbon technologies, Guoshun says simply that all "comes down to money". Companies that develop new low carbon technologies are able to charge a high price for them, he says. If Chinese companies also knew how to create the product, then the price of carbon cutting technologies would be driven down.

Guoshun says that companies should sell the rights to produce their low carbon inventions at a fair rate: "If products are sold in large quantities then the developer can earn a lot of money from the royalties."

Philibert warns that the issue of intellectual property rights for low carbon technology should not be confused with patent issues surrounding anti-retroviral drugs.

"A vast amount of money is ploughed into creating an effective drug and then once the drug is produced it is relatively cheap to manufacture", Philibert explains. "In the case of low carbon technology like power plants or even green consumer products, the costs of research and development are often less than 10% of overall costs - the manufacturing and infrastructure costs are much higher".

For this reason, Philibert echoes Guoshun, suggesting that companies would be better off allowing their technology to be produced by developing countries in exchange for royalties. He accepts, however, that intellectual property rights in developing coutries may need some work before thay are robust enough to honour this kind of agreement.

Under the Kyoto agreement, the Clean Development Mechanism is facilitating technology transfer now, he says, by sponsoring renewable energy projects in developing countries, but it is not happening at the rate it is needed.

The bottom line, Guoshan points out, is that developing countries are building power plants now that will be operating for years to come, and installing the latest clean coal technologies now will mean years of GHG emissions savings. "No country wants to curb its economic growth for the sake of the climate", says Guoshun. Introducing clean tech, to increase energy efficiency and renewable energy, is, he says, the only way for rapidly developing countries, like China, to cut their emissions.

1 comment:

Harry Jaeger said...

For your information, China has developed its own IGCC design and has a unit under test operation for more than two years now.

At a recent conference in San Francisco, the Chinese delegate announced that there are now seven active projects under construction using their "multi-burner gasifier" design.

It would appear that China doesn't need formal technology transfer. Their design, integrated with a modified GE gas turbine, seems to be a good mix of the best that is available to them to copy from the 'developed' world.

In any event, they can buy licenses for the use of other designs, if they decide not to use their own. Shell and GE Energy have numerous projects under construction based on licenses sold to Chinese companies.

Harry Jaeger
Gasification Editor
Gas Turbine World Magazine