Successful, sustainable technology transfer requires a multi-facetted enabling environment. An enabling environment for technology transfer includes macroeconomic conditions, the involvement of social organisations, national institutions for technology innovation, human and institutional capacities for selecting and managing technologies, 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.
Governments can aid in establishing an environment which promotes markets by considering what is the set of institutions which underlie markets and what are appropriate public interventions to shape those institutions. They define the property rights, contract enforcement mechanisms, and many of the rules for transactions that are necessary for markets to work well. Policies that build or facilitate markets can have a strong influence on the characteristics of those markets - for example, the relative sales share of domestic vs. foreign products, the segments of consumers participating in the market, the ability of domestic producers to participate in the market, the technologies available, and how regulations govern market behaviour.
Creating such an enabling environment is especially relevant for those ESTs that are already in common use and that could be diffused through commercial channels, but whose spread is hampered by risks such as those arising from distortive incentives, deficiencies in legal systems and inadequate regulation.
Apart from close to market technologies, many technologies that can mitigate emissions or contribute to adaptation to climate change still lie beyond the commercial frontier. Improving the enabling environment will not be sufficient to stimulate the transfer of such ESTs. Many ESTs are still in the early stages of their development and have a comparatively short track record. Market actors will not accept the extra risks or costs involved in utilising these ESTs. Governments should therefore consider extra efforts to increase the demand of these ESTs by stimulating their development, lowering their costs and reducing the associated commercial risks. Such extra efforts may include increasing the means for such non-market EST transfers and creating new and improving existing mechanisms for technology transfer.
These extra efforts will be discussed integrated with the actions to improve an enabling environment in the following sections. In order to improve the enabling environment of the transfer of ESTs, both market and non-market transfers, governments could consider a number of actions. These actions have been classified according to actions for all governments, actions specific to governments of developed countries and actions which are in general more relevant for governments of developing countries.
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