Strengthen CTCN, Encourage Energy Efficiency & Renewables, Involve Communities

Indian Youth Climate Network Policy Brief on Technology Transfer under UNFCCC

Background & Current Status:The world economy at large is still dependent on carbon intensive sources of energy. There are significant steps undertaken by many developed countries to move from carbon intensive sources to renewable sources. But there is lot left to do. The development trajectory followed the west after the industrial revolution can no longer be a safe pathway for developing countries to move on. Poverty, low access to financial services and political instability have kept many developing countries in the fossil fuel based carbon trap. Thisformed the backdrop for the adoption of Article 4.5 in the UN Framework Convention on Climate Change (UNFCCC) that refers to commitment on the issue of transfer technology to help poor countries leapfrog to a less carbon intensive future. The article states

“The developed country Parties and other developed Parties included in Annex II shall take all practicable steps to promote, facilitate and finance, as appropriate, the transfer of, or access to, environmentally sound technologies and knowhow to other Parties, particularly developing country Parties, to enable them to implement the provisions of the Convention. In this process, the developed country Parties shall support the development and enhancement of endogenous capacities and technologies of developing country Parties. Other Parties and organizations in a position to do so may also assist in facilitating the transfer of such technologies.”

Technology Transfer in UNFCCC has been one of the most contested issues as it involves added financial costs for developed countries to help developing countries leapfrog. There are additional concerns over “Intellectual Property Rights” that are currently under the rubric of “World Trade Organization” and not the UNFCCC that impede work under article 4.5. Some of these obstacles were addressed in COP 7 in Marrakesh, resulting in an accord, which had Technology needs assessment, technology information, enabling environments and capacity building as its four pillars.  These are described below –

Technology needs assessment: “Technology Needs Assessments (TNAs) are a set of country-driven activities that identify and determine the mitigation and adaptation technology priorities of Parties other than developed country Parties, and other developed Parties not included in Annex II, particularly developing country Parties.”

Technology information: “The technology information component of the framework defines the means, including hardware, software and networking, to facilitate the flow of information between the different stakeholders to enhance the development and transfer of environmentally sound technologies.”

Enabling environments: “This component of the framework focuses on government actions, such as fair trade policies, removal of technical, legal and administrative barriers to technology transfer, sound economic policy, regulatory frameworks and transparency, all of which create an environment conducive to private and public sector technology transfer.”

Capacity Building: “The capacity building component is a process which seeks to build, develop, strengthen, enhance and improve existing scientific and technical skills, capabilities and institutions in Parties other than developed country Parties, and other developed Parties not included in Annex II, particularly developing country Parties, to enable them to assess, adapt, manage and develop environmentally sound technologies.”

These components were expanded in the Cancun Agreement in COP 16 and termed Technology Mechanism, “fostering public-private partnerships; promoting innovation; catalyzing the use of technology road maps or action plans; responding to developing country party requests on matters related to technology transfer; and facilitating joint R&D activities.”

The Technology mechanism consists of Technology Executive Committee (TEC) and Climate Technology Center and Network (CTCN).  The Technology executive committee that worked on the technology mechanism, formulated a report based on the needs of 31 parties who submitted their application including Bangladesh, Sri Lanka and Bhutan from South Asia. In order to compile the report, the existing frameworks of the parties were studied, sectors were prioritized for adaptation and mitigation and barriers were identified. Following this recommendations for technology action plans were prepared and submitted for consideration to the Subsidiary Body for Scientific and Technological Advice in 2013. This has been a good starting point with more parties sending their requests to become the beneficiaries of the technology mechanism in subsequent months.

Last year in Warsaw, COP 19, parties finalized the modalities of Climate Technology Center & Network and its advisory board resulting in streamlining of submissions from National Designated Entities on the issue.

The Road Ahead

Mandate to TEC to provide guidance on CTCN priorities:  The work of CTCN is seen as a developing country driven process, but fact remains that there is no adequate mechanism by which developing countries can voice their collective requests.  The TM needs to adopt and request prioritization procedures that are based on the ADP’s understanding of equity, and how it is measured, to create an “equitable distribution” of the resources of the CTCN.

Long term funding for TEC and CTCN: Long term financing of technologies is must for making Technology Mechanism work. There have been contributions from Indonesia, Netherlands, United States and others under Global Climate Finance that are most welcome. However,developed countries need to mobilize more resources to reach the specified targets. Voluntary commitments from developing countries for climate financing should be encouraged. Private funding can and should be mobilized as private enterprises have a large role to play in the TM. However, there is a note of caution with private funding. It will come with its own set of strings which may hamper the agenda of TEC & CTCN orienting it towards certain interests.Therefore, the core funding for the decision making part of the TM, the TEC and the Climate Technology Centre and its Advisory Board should be supported in the long term through public funding.

The framework of CTCN is sound but there has to be enhanced emphasis on including transfer of knowledge, technology and skills for energy efficiency and renewable energy. This will help developing countries to diversify their energy portfolio, thereby reducing their dependence on coal.  Many countries like India & China are already moving in that direction. Setting up CTCN at regional levels could then be the next step.

Application of Precautionary Principle: CTCN should also have a mandate to ensure that the socio-environment impact of all environmentally sound technologies is studied thoroughly. There are many technologies that may seem less carbon intensive but can have high ecological, economic and health costs. Funding to such technologies should be refrained.

Stakeholder identification and community participation in decision making on technology assessment and action plan should be made compulsory. The methodology for stakeholder identification and participants should be evolved and adapted to varying local conditions of countries. It is important to ensure the participation of youth, women, indigenous peoples and local communities and other marginalized groups as stakeholders in the process.  Inputs collected should be presented by the national designated entities while filing the request. Any opposition from the communities should also be recorded for consideration. Technology Transfer should be done in an inclusive way and the goals of poverty alleviation intertwined with it. More Green jobs for youth, skill building of the poor and marginalized groups on priority basis should be encouraged.

Clean Development Mechanism (CDM) norms should be revisited for ensuring that past mistakes of funding “efficient but still carbon intensive technologies” are not repeated. For technology transfer non-market based approaches should also be identified, which currently is considered as anti-thesis of innovation in technology.

Stronger engagement with other conventions and agreements: International and other national Patent Rights norms of developed countries can be a hurdle and obstacle in technology transfer. Parties should be encouraged to remove those barriers for accessing the resources. If possible, creating a common pool of technologies and best practices should be evolved for the benefit of the commons.

Youth has an important role to play. With their energies and risk taking abilities they can take charge of innovating and adapting shared technologies, marketing them at affordable prices thereby creating more green jobs and better growth model.

Prepared by Kabir Arora after consultation with Indian Youth Climate Network members.

Ultra Mega Power Project at Mundra

The time has come to worship the black rocks beneath our soil. India needs approximately 160,000 megawatts of electricity in the coming decade to be able to sustain its phenomenal growth rate. Conveniently enough, we have one of the largest coal reserves in the world. Unfortunately Indian coal is not of good quality as it has a high ash content.  Much of our coal fields are also under developed (perhaps we should be thankful for this as these resources lie beneath our dwindling forests and tiger habitats) which makes us import from places like South Africa and Australia. That aside we know that coal will continue to play a major role in India’s economic growth and development for the coming decades. And as the government tries to rapidly electrify the entire nation by 2012 (as currently 500 million people are without access to electricity in rural areas) the need for power supply expansion is obvious. Add to that the fact that every urban center experiences power outages affecting business and agriculture both it is not surprising that we are seeing the approval of finances for Tata’s 4,000 Megawatt “Ultra Mega” Power Project at Mundra port in Gujarat.

The estimated cost of this project is $4.2 billion and the International Finance Corporation, part of the  financing wing of the World bank is footing $450 million of that (Rs. 1,800 crore). This in conjunction with the Asian Development Bank ($450 million), Korean ECA ($800 million), “local banks” ($1.5 billion), and “an equity component” of $1 billion. The beneficiaries are expected to be the industrial and agricultural users along with 1.6 crore domestic households. The juice will be zapped through power lines into five states in western and northern India. Just imagine the gap between demand and supply this will fill! Or will it? Perhaps demand will never meet up with supply as the Indian middle class grows along with their ambitions to own more ACs, refrigerators, and electronic gadgets. Never mind that people in villages are still struggling to have electricity to read. The truth is that there is a very serious climate injustice at play here.  Can India continue to just justify the need for more power in the name of the 500 million without access when an “electrified village” equates to just 10% of the households in the village having access to the grid?  Meanwhile the demand in the urban areas continues to soar…

Will the electricity really reach the rural poor? Will the poor even be able to afford electricity at time when we are seeing a restructuring of the power system to reduce transmission and distribution costs (which have been as high as 50% in many places and only now begun to come down in states like Rajasthan and a few others)?

It is said that super critical technology is being implemented in the construction of this power plant (the first of which will be operational by 2011 and the other units plugging into the grid in installments of every 4 months). This will make the coal power plants 40% more energy efficient at turning the black mineral into energy than the average power plant in India is currently able to manage. Also, it has already been estimated that the plant will emit 23 million tonnes of carbon dioxide annually. The IEA stated at a side event in Bali last December highlighting the importance of China and India in the emerging energy scenario that for serious cut backs on global green house gas emissions, by 2012 we could no longer build any more thermal power plants that emit any CO2. Everything from that point on would need to be zero-emission and from there on a gradual reduction in emission from overall power generation as the global economy transitioned into renewables. But does this leave enough time and space for rapidly emerging economies (not to mention the least developed countries LDCs) to get cheap energy to grow and bring millions out of poverty? Who will finance zero emission coal plants or the transition into a completely zero-carbon growth path?

Clean development or cool development?

A few days back, I had the opportunity to visit a large cement factory in Andhra Pradesh for a stakeholders meeting. The cement factory was in beginning stages of installing a heat recovery power project of 9 MW capacity, and was soliciting CDM financing for the coal and CO2 emissions offset because of the heat used as the energy source as a substitute for coal. The factory already had a 15 MW coal based captive power plant (where energy generated is normally supplied entirely to the factory in question, as opposed to a conventional power plant where power is supplied into the grid) to meet its energy needs, in addition to drawing 30 MW from the regional grid. It was planning to use the additional power generated from the heat recovering power project to reduce dependence on the grid supplied power. The concept of using hot gases for power generation, instead of venting them, causing acute changes in the microclimate, is undoubtedly admirable and ingenious when first thought of. However, what struck me as interesting in this context was how vigorously the company in question was courting CDM financing, and how this reflected what was happening across India. 

Now, I have my reservations regarding the efficacy of CDM and the other market based mechanisms of emissions reductions. I feel viewing emissions reductions as a business opportunity is akin to making a mockery of the gravity of climate change. However, while several Annex 1 parties may be accused of displaying reluctance, no such allegation can be leveled against India and Indian companies in particular. Indian companies are actively pursuing CDM projects, in many instances unilaterally putting forward a detailed project proposal to the CDM Executive Board before even courting an Annex 1 partner to sell the CERs to. Indian CDM projects are also extremely varied in nature. According to an independent review by the Institute of Global Environmental Strategies, a leading Japanese environmental research agency, Indian CDM projects straddle the entire strata of possible CDM collaboration areas, from heat recovery projects in cement plants, to HFC destruction units. This suggests not just the willingness of industry as a whole in embracing cleaner development, but also the heterogeneous nature of industry where emissions reductions are possible. While it is definitely commendable that India has taken up leadership in courting CDM financing, with over 300 projects accounting for nearly a third of all CDM projects, why can’t India take up leadership in voluntarily reducing emissions?

When India is displaying such willingness and even progressive interest in CDM financed emission reduction projects, why do we have to sit back and wait for the calamity to be upon us before we have to act? Why can’t we install emission reduction technologies in our industries by ourselves? Why do we have to help an Annex 1 party economically meet its insignificant Kyoto targets? If India is to be regarded seriously as an emerging global power, we cannot risk this blatant contradiction in our climate policy. We must begin emissions reduction domestically and must initiate the transition to a low carbon society, in accordance with our commitments to sustainable and equitable development. Coming back to the CDM project in the cement factory in question, the management is currently in the process of preparing a Project Design Document (PDD), a requirement for consulting a Designated Operational Entity (DOE) and for authorization from the CDM Executive Board. I have no doubt that the once approved, the project will reduce emissions and bring cleaner development alternatives to industry, but will it be effective enough in the fight against climate change? All this is still to be seen…