Caroline Boin and Alec van Gelder
International climate talks in Bonn last weekend were trying to salvage December’s failed Copenhagen summit.
But some rich countries are imposing their own carbon limits anyway, and threatening to curb imports from poor countries that are not. We believe this will cripple the rich economies and harm the poor countries without doing much about emissions.
Undermining mitigation technology: compulsory licencing, patents and tariffs
The incentives to develop the technologies to reduce global CO2 emissions are being undermined.
Internationally, a campaign is being run to undermine the intellectual property that incentivises research and development on CO2 mitigation technologies. These technologies are vital to assist developing and developed countries to reduce their CO2 emissions based on their commitments in international treaties.
The campaign is being run by developing countries and NGOs claiming patents are reducing
the access to CO2 mitigation technologies beyond the means of developing countries.
These NGOs and developing countries are now advocating for amendments to the WTO’s
intellectual property rules (the TRIPS Agreement) to allow for compulsory licensing of CO2 mitigation
technologies. Compulsory licensing allows for the property rights to be waived on patented
inventions and the commercial return they provide. Without the commercial return there is no
incentive for investors to fund research and development into new technology.
Importantly, the industry is very much in its infancy. The stage of development of the industry
has been compared to the semiconductor industry 35 years ago, or the biotechnology industry 25
years ago. Compulsory licensing will stop the industry reaching maturity.
The campaign to undermine incentives for new research and development is not without precedent.
Advocates are using the successful campaign to compulsory license essential medicines under
the TRIPS Agreement as precedent. They are also advocating for the issue to be debated and included
in the next agreement out of the UNFCCC process scheduled to be completed in Copenhagen
By promoting compulsory licensing NGOs and developing countries are claiming that technology
will become more accessible. It won’t.
Numerous studies have found that IP rights are vital for technology transfer from developed to
developing countries. IP provides a tradeable right for an intangible good that assists patent holders
to transfer their property without fear of losing control of their technology.
Instead, studies have found that the bigger threat to technology transfer is not strong IP regimes,
but weak ones. Weak IP rules undermine both the incentives to innovate and discourages technology
transfer from developed to developing countries because the owners risk a violation of their property
Because of the importance of the private sector in developing the technologies to combat environmental
challenges, previous international treaties have explicitly acknowledged their role. The
Convention for the Protection of the Ozone Layer and the Kyoto Protocol both recognise the role
of private property rights to address their respective objectives. Both agreements also recognise the
private sector’s role in promoting technological diffusion.
The importance of the private sector is also acknowledged by Governments and multilateral
institutions. Both are currently working on programs to incentivise private investment into CO2
mitigation technologies. The ultimate consequence of undermining IP rights would be to undermine
these programs, as well as commercial incentives.
Attacking patents as the main barrier to technology transfer is also a distraction from the real
barriers that exist to technological diffusion in developing countries—tariffs and non-tariff barriers.
In the top 15 greenhouse gas emitting developing nations, tariff barriers for CO2 mitigation technologies
can be as high as 30 per cent. Non-tariff barriers can be as high as 160 per cent. Only one
country welcomes the free trade of CO2 mitigation technologies.
In comparison to campaigning against patents, if developing countries are serious about reducing
the cost of CO2 mitigation technologies, they can start by reducing the tariff and non-tariff