As discussed in Chapter 2, international financial flows
have strongly influenced technology transfers between countries. Since UNCED
in 1992, three major trends in finance for sustainable development have occurred.
First, there has been increasing interest and activity in developing innovative
domestic and international financial mechanisms. Second, both official development
assistance and domestic resource mobilisation have fallen short of the commitments
made. Third, private flows of financial resources from developed to developing
countries have expanded enormously (Lin See Yan, 1997).
To improve the quality and efficacy of the transfer of environmentally sound
technologies for the purposes of the UNFCCC, these trends need to be set in
a broader context. That context-for promoting successful, sustainable technology
transfer-implies multi-facetted enabling environments in both developed and
developing countries. Enabling environments for technology transfer include
national institutions for technology innovation, the involvement of social organisations,
human and institutional capacities for selecting and managing technologies,
macroeconomic policy frameworks, the underpinnings of sustainable markets for
environmentally sound technologies, national legal institutions that reduce
risk and protect intellectual property rights, codes and standards, research
and technology development, and the means for addressing equity issues and respecting
existing property rights. Enabling environments are inclusive, with all stakeholders
potentially affected - governments, research institutions, national NGOs, technology
developers and businesses. And actions to promote enabling environments are
required in both developed and developing countries.
Any discussion of enabling environments inevitably conjures up the long-standing
debate about "good government." Good government has been increasingly
recognised as essential for promoting the environment and development agenda.
Yet sharp disagreements have existed about what good government means; a wide
range of actions have taken place in response to "simultaneously too much
state and too little state" (Merquior, 1993). In both developed and developing
countries in the 1980s and early 1990s, many governments committed themselves
to market-oriented approaches for generating economic growth as a response to
"too much state." Economic and political pressure forced governments
to limit or eliminate economic interventions. This response to decades of "too
much state" reduced the size, expenditures, and responsibilities of public
sectors (Grindle, 1997). Reform priorities turned to the stabilisation of macroeconomic
conditions, liberalisation of domestic and international trade, privatisation,
and the reduction of state bureaucracies.
Over time it became clear to many that government also had to be strengthened
to make it efficient, effective and responsive.
The most significant obstacle to the pursuit of social objectives is what
may be described as the crisis of governance. The crisis of governance includes
an excessive degree of centralisation; overburdening and rigidity of the government
machinery; the absence of local participation which can provide the requisite
attention to detail; deterioration in the professionalism, competence and
integrity of public functionaries and the weakening of judicial and quasi-judicial
institutions (Banuri et al., 1997, p. 9).
Governments not only had to have the capacity to manage macroeconomic policy
but also had to be able to actively regulate market behaviour. So the trend
towards market-oriented economic policy inevitably led to new (or rediscovered)
roles for the state (Naim, 1995). In addition, reformers began to recognise
that well-defined and functioning institutions of governance were important
for the stability and legitimacy of new modes of public and community participation.
By the mid 1990s, good government had been added to the development agenda
precisely because of greater awareness that neither markets nor democracies
could function well--or perhaps function at all--unless governments were able
to design and implement appropriate public policies, administer resources
equitably, transparently and efficiently, and respond to the social welfare
and economic claims of citizens. Although a general consensus developed on
the imperative for good government, how to get good government has not been
clearly understood (Grindle, 1997, p. 5).
Past experience with technology transfer in a variety of sectors can be used
to suggest policy tools for providing enabling environments for the transfer
of technologies for mitigation and adaptation to climate change that is supportive
and sustainable. Evidence exists both of barriers and ways in which barriers
can be avoided and overcome. Experience also shows that technology transfer
offers many opportunities for sustainable economic and social development. Perceptions
of the role of technology transfer in development have been transformed in the
past twenty years, as the focus has switched from externally supplied hardware
to people, processes, and the importance of local knowledge. Experience also
has shown that technology transfer can be made more sustainable by ensuring
that long-term learning and adaptation takes place, that conditions for market
sustainability exist, that stakeholders continue to be involved, and that replicable
financing mechanisms continue to function.
The sustainable use of environmentally sound technologies (ESTs) for climate
change has to fulfill not only social but also economic and development objectives
through a complex process of technological change. Chapters
4 and 5 explore what enabling conditions government
can establish to facilitate this change in support of the Climate Change Convention,
and how other stakeholders in the private sector, lending institutions, multilateral
agencies, and non-governmental organisations can perform within this framework.
This chapter identifies the key elements and broad relationships and Chapter
5 focuses on the crucial financial partnerships needed.