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This chapter has examined the characteristics and trends of different international financial flows that support technology transfer. None of these is a direct measure of technology transfer, nor is it clear how environmentally sound these flows are. The various financial flows are the best available indicators, however, and allow a comparison of technology transfer trends over time. In general, though, levels of both technology transfer and technology diffusion are difficult to measure.
Official Development Assistance experienced a general downward trend during the mid-1990s that was reversed in 1998, while foreign direct investment increased significantly during the decade. By 1997, private flows supplied more than three fourths of the total net resource flows from DAC member countries and multilateral agencies to developing countries, compared with one third in 1990. In large part this reflects the great increase in private sector investment in developing countries that occurred during the 1990s. Sources and amounts of development finance, some portion of which goes for technology transfer, vary widely from region to region. Countries in sub-Saharan Africa received in 1997 an average of some US$27 per capita of foreign aid and US$3 per capita of foreign direct investment. By contrast, countries in Latin America and the Caribbean received US$13 per capita of aid and US$62 per capita of foreign direct investment. Recent initiatives to spur development progress in Africa aim to respond to these disparities.
Total private flows to developing countries peaked in the first half of 1997 and then fell significantly in the wake of the financial crisis that started in Asia. Most of the decline was due to reduced bank lending by the private sector, although this remained robust to Latin America. Foreign direct investment in developing countries is estimated to have increased slightly. Most private transfer of improved technologies, however, still occurs between developed countries and that which occurs to developing countries is selective.
Grants provided by non-governmental and philanthropic organisations have remained steady during the 1990s. Despite their relatively modest amounts, like ODA many of these are directed at least developed countries and at capacity building efforts. NGOs are particularly important in identifying and promoting the transfer and diffusion of ESTs that are socially sound.
The role of governments in providing R&D funding for energy-related technologies deserves careful consideration; linking government-supported R&D programmes with bilateral aid efforts may hasten technology transfer to developing countries. Retrieving useful statistics on R&D funding, and deployment, however, is difficult, especially for private sector R&D activities.
The broad changes in transfer pathways have diminished the direct role of developed country governments in technology transfer and cooperation. The role of government is now viewed by many as helping put in place policies and measures that hasten the transfer of technologies by the private sector.
Technology transfer is difficult to measure, and little is actually known about how much climate-relevant technology is successfully transferred each year. Ambitious investigation and reporting over a number of years are needed to build a consensus on what is actually occurring, and to give governments better information on which to base policies and programmes.
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