This chapter has surveyed the role of international agreements and legal structures in facilitating technology transfer. Facilitating technology transfer is an intrinsic part of the evolving climate regime under the UNFCCC. So far steps towards this have proceeded slowly.

Government-driven technology and transfer pathways remain important, particularly in some regions. On the whole, however, the bulk of foreign investment is now through the private sector. Some relevant technologies (by no means all) are protected through intellectual property rights, particularly patents. The TRIP agreement embodies a considerable strengthening of IPRs in many developing countries. This may help to attract greater foreign investment (though IPRs do not appear to be a dominant consideration in most foreign investment decisions), and stimulate innovation. On the other hand, it may also impede the horizontal dissemination of technologies in some cases. More attention could be paid to the possibilities surrounding licensing (sometimes compulsory, where the TRIP procedures are followed and adequate justification is given). Where market-driven solutions are not feasible to address short-term access issues, international financial assistance should be considered. There may also be important roles for sector-based initiatives, standards and agreements.

The combined set of positive measures established under the Montreal Protocol, such as the participatory approach, where the relevant stakeholders are involved in the decision-making process for setting up national strategies, the globally agreed and binding targets to phase out ODS, industry-government partnerships and NGO involvement, plus direct investment projects, have helped in facilitating technology transfer of ozone friendly technologies, and also contributed towards endogenous capacity-building necessary for improving the regulatory structure in developing countries. A major obstacle for several of these countries is the inadequacy of the regulatory structure to support the phaseout process. The weak capacity of governments to institute and/or enforce laws, regulations, and policies is a common problem for them.

The Kyoto Protocol and the CoP4 decisions, including its establishment of the project-level crediting mechanisms, reflects significant changes and opens up important opportunities. Development of procedures relating to compliance could both highlight the performance of Annex II Parties with respect to technology transfer, and contribute to capacity-building in developing countries in ways that would also facilitate such transfer. In this context it is important to spell out the elements that constitute compliance with Article 4.5. These include agreeing on procedures to determine whether there is technology transfer, the expected roles of governments and the private sector, and finally on how to measure compliance with Article 4.5 of UNFCCC.

Ultimately, in all these respects, it is on-the-ground activities that do much to determine effective technology transfer, and the international process needs most to support the capacities and activities of states in creating stable and supportive environments for such activities. The recent Technical Paper prepared by the UNFCCC Secretariat (1998d) points out the need for:

• stable macroeconomic and environmental policies to provide framework conditions conducive to investment by the private sector;
• transparent and fair laws and public administration;
• open trade and investment policies;
• adequate infrastructure and human resources;
• opportunities to use national legislation to provide incentives for EST;
• educating and training people in the country to select, maintain and develop EST.

All these factors are relevant in creating the local conditions not only for compliance with commitments on reporting, finance, etc., but also for fostering adequate implementation of provisions on technology transfer, and for creating conducive national conditions in host countries. These conditions form the subject of the next two chapters.

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