Technology Transfer Issues in Environmental Goods and Services

An Illustrative Analysis of Sectors Relevant to Air-pollution and Renewable Energy

by Lynn Mytelka

Environmental Goods and Services Series • Issue Paper 6

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Environmental goods and services (EGS) as a subset of goods and services was singled out for attention in the negotiating mandate adopted at the Fourth Ministerial Conference of the World Trade Organization (WTO) in November 2001. Increasing access to and use of EGS can yield a number of benefits including reducing air and water pollution, improving energy and resource efficiency and facilitating solid waste disposal. Gradual trade liberalisation and carefully managed market opening in these sectors can also be powerful tools for economic development by generating economic growth and employment and enabling the transfer of valuable skills, technology and know-how embedded in such goods and services. In short, well-managed trade liberalisation in EGS can facilitate the achievement of sustainable development goals laid out in global mandates such as the Johannesburg Plan of Implementation, the UN Millennium Development Goals (MDGs) and various multilateral environmental agreements.

Access to technology and know-how will play an important role in helping developing countries realize meaningful sustainable development benefits through trade and investment in EGS. However, ongoing negotiations on EGS have not yet addressed the issue of technology transfer in a meaningful way. On the one hand, it is assumed by a number of countries that environmental technologies will be diffused automatically once barriers to EGS are lowered, but on the other, many trade negotiators as well as experts do not see such an automatic link. They would prefer positive measures within the context of EGS and other WTO negotiations that would enable developing countries to meaningfully access and operate these technologies and eventually to build a domestic technological base and know-how as a stepping-stone to further innovation.

While transfer of technology is not explicitly mentioned in the EGS mandate in Paragraph 31 (iii) of the Doha Declaration, some trade negotiators feel that the issue should be addressed more meaningfully so that EGS negotiations deliver on sustainable development and not just on market access. However, there is some scepticism expressed on the extent to which the WTO can contribute to the process. So far, divergent opinions and priorities have held back constructive engagement on the issue not only in EGS negotiations, but also in the Working Group on Trade and Transfer of Technology within the WTO.

The paper by Lynn Mytelka argues, on the basis of empirical evidence and the conceptual evolution over the years of what constitutes technology transfer, that much can be done within EGS and other areas of WTO negotiations. This would, however, imply rethinking the mandate of EGS negotiations and steering the focus away from simply increasing market access for EGS to one that recognises and facilitates the importance of knowledge transfers including “tacit” knowledge embodied in services.
Professor Mytelka clearly illustrates, through various examples and case studies, the impediments countries face in obtaining meaningful access to environmentally sound technologies (ESTs). The author questions whether it is feasible to expect the Doha WTO negotiating process to deliver more on the technology transfer front than has so far been achieved. The paper concludes that there are still other aspects of the mandate and the process of negotiating trade that could be rethought from a broader technology transfer and sustainable development perspective. These involve recognising the “public goods” element inherent in many ESTs and to open up opportunities for learning and capacity building and enhanced response capabilities in developing countries through flexibility, special and differential treatment and technical assistance. The paper calls for the identification of areas where such opportunities could be pursued, not only in EGS negotiations, but also in other areas of discussions such as subsidies, agriculture and Trade-Related Aspects of Intellectual Property Rights. In addition, the paper advocates positive measures that go beyond the negotiating framework, including the creation of a Knowledge Fund to bring benefits of learning and innovation in technologies that respond to the critical needs of developing countries including the environment.

Dr. Lynn Krieger Mytelka is a Distinguished Research Professor at Carleton University, Ottawa, Canada, and former Director of the United Nations Institute for New Technologies (UNU-INTECH) (2000-2004), now part of UNU-MERIT where she is currently a Professorial Fellow and holds an Honorary Professorship in Development Economics at the University of Maastricht. Prior to that, she served as Director of the United Nations Conference on Trade and Development’s Division on Investment, Technology and Enterprise Development (UNCTAD DITE) (1996-2000). Professor Mytelka has published extensively in the area of innovation, technological change and sustainable development and is a member of the International Livestock Research Institute’s (ILRI) Science Advisory Panel and the International Confederation of Science Union’s (ICSU) Committee on Scientific Planning and Review (CSPR)

The paper is part of a series of issue papers commissioned in the context of ICTSD’s Environmental Goods and Services Project, to address a range of cross-cutting, country-specific and regional issues of relevance to the current EGS negotiations. The project aims to enhance developing countries’ capacity to understand trade and sustainable development issue linkages with respect to EGS and reflect regional perspectives and priorities in regional and multilateral trade negotiations. We hope
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