The industrial sector is extremely diverse and involves a wide range of activities.
Aggregate energy use and emissions depend on the structure of industry, and
the energy and carbon intensity of each of the activities. The structure of
the industry may depend on the development of the economy, as well as factors
like resource availability and historical context. In 1995, industry accounted
for 41% of global energy use and up to 43% of global CO2
emissions. Besides CO2 industry also emits various
other GHGs. Although the efficiency of industrial processes has increased greatly
during the past decades, the potentials for energy efficiency improvement in
all processes remain large. Fundamentally new process schemes, energy and resource
efficiency, substitution of materials, changes in design and manufacture of
products resulting in less material use and increased recycling, can lead to
substantial reduction in GHG emissions.
Technology transfer can be most effective in OECD countries if technologies
comparable to that of efficient industrial facilities are adopted during stock
turnover. For countries with economies in transition, technology transfer options
are intimately tied to the economic redevelopment choices and the form that
industrial restructuring takes. In developing countries, large potentials for
adoption of energy efficient technologies exist as the role of industry is expanding
in the economy. Hence, in industry, GHG emission reduction is often the result
of investments in modern equipment, stressing the attention to sound and environmentally
benign investment policies.
Barriers for technology transfer in the industrial sector include corporate
decision-making rules, lack of information, limited capital availability, shortage
of trained personnel (especially in small and medium sized enterprises), low
energy prices, and the "invisibility" of energy savings. Developing
countries suffer from all barriers that inhibit technology transfer in industrialised
countries plus a multitude of other problems.
Global investments in industrial technology (i.e. hardware and software) are
dominated by the private sector, although in some countries government-owned
enterprises are still important. Foreign capital investment in the industrial
sector is increasing (see Figure TS2). Foreign Direct Investment (FDI) is a
large part of the total foreign investments. FDI is increasing, although concentrated
on a small number of rapidly industrialising countries (see Figure TS3). Despite
the concentration, the development in these countries may impact regional industrial
development patterns, as seen in Southeast Asia. Private investment is increasing
in other developing regions but still limited. Public funding (in industrialised
and developing countries) for technology development and transfer, although
still important, is decreasing. Funding for science and technology development
is important to support industrial development, especially in developing countries.
Public funding in the industrial sector, although small and declining in comparison
to private funding, remains important for longer term development.
An effective process for technology transfer requires active networks among
users, producers and developers of technology. The variety of stakeholders makes
it necessary to have comprehensive industrial policies for technology transfer
and co-operation, both from a technology donor and technology recipient perspective.
Such a framework may include environmental, energy, (international) trade, taxation
and, patent legislation, as well as a variety of well-aimed incentives. Changing
economic and technical developments stress the need for innovative and flexible
approaches. Instead of regulation specifying the means, policies such as voluntary
agreements with well-defined goals for energy efficiency improvements, can be
more successful. There is a strong need to develop the public and private capacities
to assess and select technologies, in particular for state owned and small and
medium sized industries. Stakeholders (policymakers, private investors, financing
institutions) in developing countries have even more difficult access to technology
information, stressing the need for a clearinghouse for information on climate
change abatement technology, well integrated in the policy framework. To be
successful, long term support for capacity building is essential to meet the
need for public support and co-operation of technology suppliers and users.
Adaptation of technology to local conditions is essential, but practices vary
widely. Countries that spend on average more on adaptation seem to be more successful
in technology transfer. Successful technology transfer includes the development
of technological capabilities of the user or host. This will accelerate the
technology transfer process through assimilation, adaptation and development
of new technologies.