Research and development (R&D) is a process of forming new ideas and transforming them into products and services. Technology capacity at both the assessment and replication stages of the technology transfer process have to be underpinned by R&D. Central to this process are national systems of innovation and international co-operation between public research institutions and private-sector entities in R&D. Governments have been investing for three decades in R&D for ESTs in the energy sector. There may be a case for seeing whether results from this process have been used and disseminated sufficiently. Developing countries R&D efforts are often adaptive, following externally developed technology, which suggests the need for additional resources to develop indigenous innovative capacity. The activities at all stages of technological development and implementation are necessary to attain short-term and long-term technical results (Elliot and Pye, 1998). In the field of climate change, R&D of mitigation and adaptation technologies can reduce the costs of implementation of mitigation and adaptation measures, and provides decision makers with viable alternatives in the formulation of response strategies to climate change.
The process of technological innovation includes not only research and development, but also innovation in the design of products, technological processes, and manufacturing, and innovation in management and market exploration. The private sector has played an important role in the development of energy-efficiency technologies, and is becoming increasingly active in developing renewable-energy technologies (Forsyth, 1999). The bulk of R&D and technology transfer in the energy sector is mainly driven by oil, natural gas, and power supply companies. Other energy supply technologies, such as coal, nuclear, and renewable sources, are often dependent on governments to preserve or increase their presence in the market. Governments can play an important role in R&D as follows:
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