Methodological and Technological Issues in Technology Transfer

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9.1 Introduction2

The industrial sector is extremely diverse and involves a wide range of activities including the extraction of natural resources, conversion into raw materials, and manufacture of finished products. We define the industrial sector as industry including the minerals processing industries. The sub-sectors that account for roughly 45% of all industrial energy consumption are iron and steel, chemicals, petroleum refining, pulp and paper, and cement. These industries are generally concerned with the transformation of raw material inputs (e.g. iron ore, crude oil, wood) into usable materials and products for an economy. Due to the wide variety in activities, energy demand and GHG emissions vary widely. Hence, the aggregate energy use and emissions depend on the structure (or specific set of activities) of industry, and the energy and carbon intensity of each of the activities. The structure of industry may depend on the phase of the economy, as well as many other factors like resource and technology2 availability as well as historical factors.

In 1995 industry accounted for 41% (131 EJ) (Price et al., 1998) of global energy use and up to 47% of global CO2 emissions (IPCC SAR, 1996). Besides CO2 industry also emits various other GHGs, i.e. CFCs, HFCs, HCFCs, CH4, N2O, PFCs, CF4, C2F6, and SF6 (IPCC SAR, 1996). Between 1971 and 1990, industrial energy use grew at a rate of 2.1% per year, slightly less than the world energy demand growth of 2.5% per year. This growth rate of industrial energy use has slowed in recent years, falling to an annual average growth of 0.2% between 1990 and 1995, primarily because of declines in industrial output in the CEITs. Energy use in the industrial sector is dominated by the OECD countries, which account for 44% of world industrial energy use. Non-Annex I countries and CEITs used 37% and 20% of 1995 world industrial energy, respectively. Industrial production is growing at a fast rate in non-Annex I countries. The trends in industrial energy use and CO2 emissions are depicted in Table 9.1.

Table 9.1. Historical Energy Use in Industry (EJ). Primary energy consumption is calculated using a 33% conversion efficiency for electricity generation for all years and regions. Source: Price et al. (1998)
  1960 1971 1980 1990 1995 1960/1990 1971/1990 1990/1995
OECD 28 49 55 54 57 2.3 0.6 0.9
EE-FSU   26 34 38 26   2.0 -7.3
Developing Countries   13 24 37 48   5.4 5.0
World   88 114 129 131   2.1 0.2

Industrial production is an important engine to increase the economic activity, generate employment, and build up the infrastructure in developing countries. Investment in industry seems to have a stronger relation with economic growth than investments in other sectors (UNIDO, 1997). This can also be observed from the growing importance of industry in, and its contribution to the growth of a developing nation's economy (UNIDO, 1997). High industrial growth also promotes technological change (UNIDO, 1997). Capital investment in industry is important to achieve economic welfare in developing countries. Capital relates to physical (e.g. equipment), human (e.g. education) and technological capital (e.g. science, R&D). Industrialisation builds on the contribution of science and technology, as is evidenced by the Chinese economic development in the past decades (Song, 1997). However, industrial technology should fit the needs of the users in developing economies. Technologies developed for a specific industrial infrastructure (e.g. raw materials used (UNEP, 1997), relative shares of production costs) may not always be the right choice for another one, as is shown by examples of industrial technology applied in Tanzania (Yhdego, 1995) and India (Schumacher and Sathaye, 1998). Adaptation and development of technology to suit the needs is an essential step in the successful transfer of technology. Hence, technology transfer is a process, involving the trade and investment in technology, the selection (e.g. new, second-hand), adoption, adaptation, and dissemination of industrial technology, and, last but not least, capacity building, as science and technology are strongly related (Song, 1997) in the development of an industrial infrastructure.

Future growth of basic industries will, to a large extent, occur in developing countries. While developing countries are the most important markets for new and energy efficient processes, technology is still primarily developed in industrialised countries, despite the fact that the absolute demand for such technologies is stagnating or relatively low. Industrialised countries will be less favourable theatres for the innovation of technologies in the primary materials processing industries, if there are limited applications for such in industrialised countries. This development stresses the need both for technology adaptation to the prevailing conditions in developing countries, and intensified collaboration between suppliers and users of new industrial processes. Technology transfer needs to be studied within these perspectives. However, it seems that environmentally sound technologies do not transfer as rapidly as e.g. information technology, particularly with regard to developing countries. Also, the rapidly increasing role of transnational companies and foreign direct investment (UNCTAD, 1997) may change the patterns of technology transfer (see Section 9.3). These issues warrant a specific study of transfer of environmentally sound industrial technology, with an emphasis on GHG abatement technologies.

In this chapter we describe the experiences with various forms of technology transfer. After a brief summary of the technologies for GHG mitigation, mainly based on previous IPCC reports, we discuss the trends in technology transfer from a 'macro' perspective (Section 9.3). In Section 9.3 we describe the trends from an economic perspective, and study magnitude and directions, as well as sources of investment and technology. In Sections 9.4 and 9.5 we study the processes of technology transfer between and within countries, based on case-study material and other literature sources. Next, there is an evaluation of the analysed material and a description of the main lessons learned in Section 9.6, and this is followed by a summary.

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