Image Courtesy: Sustainable Business Consulting
In parallel to the Barcelona international climate talks last week, a report on one of the major issues under discussion, green technology, was launched in Delhi. Entitled “A Policy Approach for Supporting Clean Energy Technology in India,” and produced by the Coalition for Innovation, Employment and Development (CIED), the report finds that developing and deploying advanced clean technologies, including biofuels, hydro, wind, and nuclear, could create almost 10 million jobs in India by 2025.
However, in order to capture this opportunity, the report states that removing Intellectual Property Rights (or IPRs), which are the fees charged by the innovator of a particular technology for purchasing their invention, would be a bad move, slowing down technology developments, and that, conversely, they must be strengthened.
A variety of forms of compulsory licensing, which is the granting of licenses by governments to circumvent international property costs, have been called for to broaden access to technologies for public purposes by developing nations in the climate talks. But Pawan Chopra, Director of Dua Consulting, and a lead author of the study, said this “is a red herring” at the report’s launch in Delhi, adding that “in the real world, people only develop technology for profit.”
The CIED report proffers that efforts, such as compulsory licensing, to avoid IPRs, would actually discourage innovators from sharing technologies with India and other developing countries. “Intellectual property will be the catalyst for cleantech innovation and deployment in India,” says the report, adding that it will pull in billions of dollars worth of private capital, which would translate into additional jobs.
In addition to enforcing and strengthening IPRs, the authors state that policies to reduce barriers to market access are also needed in India. These would include the provision of lower tariffs for clean technology, reduced time for patent awards on environmental technologies, and tax incentives for clean technologies.
However, recommendations to strengthen IPRs for green technologies, in particular, come in marked contrast to the position of many developing countries in the international climate talks that calls for the costs of green technology IPRs to be lowered or fully covered by a global regime.The Indian government, along with other developing countries, continues to argue that unless this occurs, the costs associated with many IPRs add to the investment costs for green technologies and thus makes them unaffordable.
A July 2009 report by the Center for American Progress (CAP) and the Global Climate Network, called “Breaking through on Technology,” states that “Intellectual property (IP) law can… act as a barrier [to green technology], and measures to encourage companies to use or relinquish IP… may be necessary.” The report further notes that although in some cases stronger enforcement of IPRs might encourage faster and more widespread rollout of new technologies, in others, “the costs of licensing could be another focus of financial support by developed country governments, a de facto subsidy to developers of low-carbon technology.”
At another recent international Technology Summit held in Delhi, India’s Prime Minister Manmohan Singh proposed something of a middle ground, saying that “IPR should balance rewards for innovators with the need for the common good of mankind,” and that climate-friendly technologies should be purchased through an international mechanism and made available as global public goods.
At the same meeting, Yvo de Boer, executive secretary of the United Nations Framework Convention on Climate Change (UNFCCC) said that “On the one hand, we have the recognition that investment of private companies in new technologies needs to be respected or it will kill innovation,” and “on the other hand, we need to look at options of buying down the IPRs to critical sectors such as solar and wind to make them available more quickly.”
In support of this, the CAP report notes that “most low-carbon technologies require high up-front investment and may be more costly to deploy than carbon-intensive alternatives,” adding that public finance will be required early on to facilitate longer term private financing by making new technologies “cheaper and less risky”.
IPR may well be a crucial enabler for the ongoing growth and innovation of green technology markets and there is a clear opportunity to be captured. However there are also significant upfront cost barriers to be overcome if developing nations are to meet the scale and pace of clean technology roll out that is needed to shift to a low carbon growth path and additional financing will be required to overcome them. With this in mind, perhaps the real question is therefore not IP or no IP, but rather, “who pays?”
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