Tech Monitor ( July-August 2000 )

　　Access to sound technologies is essential for sustainable development. This has been recognized by the international community throughout the Rio process. Indeed, in December 1989, in deciding to convene a United Nations Conference on Environment and Development, the UN General Assembly agreed that one of the objetives of the Earch Summit should be "to examine, with a view to making recommendations on effective modalities for favourable access to, and transfer of, environmentally sound technologies in particular to developing countries, to explore the concept of assured access for developing countries to environmentally sound technologies, in its relation to property rights, with a view to developing effective responses to the needs of developing countries in this area.". Accordingly. Chapter 34 Agenda 21 is devoted to the transfer of environmentally sound technology, cooperation and capacity building.

　　In addition, the three environmental conventions associated with the Rio process have also identified the transfer of environmentally sound technologies as a key element for achieving their respective objectives. The UN Frame work Convention on Climate Change, the Convention on Biological Diversity and the Convention to Combat Desertification established subsidiary bodies on scientific and technical issues mandated inter alia to advise the Conferences of the Parties on ways and means of promoting development and or transferring environmentally sound technologies. Article 4.1 of the Convention on Climate Change calls on Parties to promote and cooperate in the development, application and diffusion, including transfer of technologies, practices and processes that control, reduce or prevent anthropogenic emissions of green house gases. Articles 16 and 18 of the Convention on Biological Diversity are devoted to the issues of access to, and transfer of technology as well as technical and scientific cooperation. Article 18 of the Convention to Combat Desertification is devoted to the transfer, acquisition, adaptation and development of technology.

Origin of the GEF

　　The Global Environment Facility (GEF) was established in 1991 as a pilot project with a capital of US$ 1.3 billion on the basis of a partnership between the UN Development Program, the UN Environment Program and the World Bank. A restructured GEF was established in 1994 as a mechanism for international cooperation for the purpose of providing new and additional grants and concessional funding to meet the agreed incremental costs of measures to achieve global environmental benefits in the focal areas of climate change, biological diversity, international waters and ozone layer protection. It was also agreed that, under the restructured GEF with a capital of $2.2 billion, land degradation activities, primarily desertification and deforestation, are eligible if they relate to the four focal areas. The GEF was replenished of ran other period on the occasion of its first Assembly held in New Delhi, India, in May 1998. More than 160 states are now members of the GEF.

　　The Earth Summit called on the GEF to cover the agreed incremental costs of relevant activities of Agenda 21. In addition, the Convention on Climate Change and the Convention on Biological Diversity designated the GEF to act as their financial mechanism. On issues of relevance to their respective mandate, the GEF, in its capacity as the financial mechanism, operates under the guidance of the Conference of the Parties to the Convention on Climate Change and the Convention on Biological Diversity. Meetings of the Conferences of the Parties and the subsidiary bodies of GEF related conventions have regularly adopted decision on the implementation of parties commitments related to technology transfer.

　　In implementing its mandate, the GEF has devoted high priority to the needs of developing countries on issues related to technology transfer. This is reflected in its Operational Strategy and its relevant long term Operational programs. From its inception until December 1999, the GEF has provided nearly $ 2.7 billion to support projects under its four focal areas, and has succeeded in leveraging more than $ 7 billion.

　　As the financial mechanism of the Convention on Biological Diversity, the GEF provided more than $101 billion to support 332 bio-diversity projects in 119 countries. These projects aimed at assisting eligible Parties to implement the threefold objectives of the Convention, namely, conservation, sustainable use and benefit sharing, thus helping to achieve local, national and global environmental benefits. In doing so, the GEF succeeded in catalyzing an additional $ 1.4 billion in co-financing.

Climate change

　　In the area of climate change, the GEF provided $ 987 million to support 235 projects aimed at achieving the objectives of its long term operational programs. It succeeded in mobilizing $ 5.5 billion in co-financing. This article reviews the GEF experience on technology transfer in the focal area of climate change.

　　GEF Operation Program 5 aims at removing barriers to large scale application, implementation, and dissemination of least economic-cost energy efficient technologies. Operational Program 6 aims at removing barriers to the use of commercial or near commercial renewable energy technologies and reducing any additional implementation costs of renewable energy technologies that may result from a lack of practical experience, initial low volume markets, or from the dispersed nature of applications. Operational Programme 7 aims at reducing greenhouse gas emissions from anthropogenic sources by increasing the market share of low greenhouse gas emitting technologies that have not yet become widespread least cost alternatives in developing countries for specified applications.

　　The GEF recently finalized a new operational program (Number 11) on promoting environmentally sustainable transport. This program aims at financing strategic planning, targeted research, training, capacity building, technical assistance, demonstration projects, investments, market transforming activities to achieve full commercialization of low greenhouse gas emitting technologies and dissemination of lessons learned that could lead to replication of successful GEF financed project.

　　According to the Inter governmental Panel on Climate Change (IPCC), the stabilization of atmospheric greenhouse gas concentration at levels that will prevent serious interference with the climate change system can only be achieved by dramatically increasing the utilization of renewable energy supplies. However, as noted in the "Outlook for Renewable Technical Advisory Panel of GEF, the has been remarkable progress to date towards commercialization of renewable energy technologies (RETs) and some are not yet ready for widespread adoption in the energy economy", Indeed, in many in stances, the costs of renewable energy technologies are not yet competitive with those of conventional energy supplies. Accordingly, one of the major features of GEF interventions is to promote pre-commercial renewable energy technologies.

　　In Argentina, Bolivia, Cape Verde, China, Ghana, India, Indonesia, Laos, Malawi, Mexico, Sri Lanka, Togo, Uganda and Zimbabwe, GEF project are promoting solar home systems and rural energy services. Installations as a result of GEF projects could total more than 1000000 system, which will significantly enhance the installed capacity of developing countries. In addition, the GEF is joining forces with the Inter national Finance Corporation foundation in establishing a Solar Development Corporation (SDC). This initiative of $ 50 million, including $ 10 million from GEF resources, aims at increasing the delivery of solar home system by investing in private sector companies involved in rural, commercially sustainable PV activities and providing financing to local financial intermediaries who will service such companies. The combination of finance and business advisory components is expected to overcome persistent market barriers and accelerate the growth of the PV market.

　　The CEPALCO Distributed Generation PV, a GEF project of $ 7.5 million in the Philippines, aims at demonstrating the effectiveness of central photovoltaic (PV) power plants. It is expected that the project will provide the first full scale demonstration of the environmental and, ultimately, the economic benefits of the conjunctive use of hydro and PV based power, as well as the first significant use of grid connected PV in a developing country. It is also anticipated that the project will contribute to a widespread application of this promising technology as a result of its large scale introduction and the substantial reduction of PV system costs.

　　The Solar Based Thermal Power Plant, a GEF project of $ 114 million in Morocco, aims at demonstrating the economic feasibility of solar thermal based power generation world wide by disseminating this technology and reducing its costs in the long run. The project involves the construction and operation of a solar fossil fuel hybrid power station in the range of 150 MW capacity.

　　Likewise, the GEF Solar Thermal Electric Project of $ 245 million in India is designed to stimulate the expansion of solar thermal technology through the construction and operation of a grid connected, 140 megawatt solar thermal fossil fuel hybrid power plant in Rajasthan. In Mexico, another GEF project of $ 167 million aims also at contributing to the large dissemination of solar thermal technology.

　　In Brazil, three GEF projects aim at demonstrating the commercial viability of biomass integrated gasification gas turbine technology (BIG/GT). The first project of $ 8.1 million conducted pre-feasibility and project design activities. The second project of $ 6.5 million considered the feasibility of new fuel sources and modes of obtaining bagasse biomass fuel supplies for BIG/GT plants. The third project of $ 122 million aims at constructing and operating a 30 megawatt pilot plant running on wood chip fuel from plantation forests.

　　Another GEF project of $21 million in Brazil is designed to stimulate the development and utilization of fuel cell buses by supporting a significant operational test of this technology in Sao Paulo. The project will contribute to reducing the cost of this technology, thus making it affordable in the long term for other developing countries.

　　Another feature of the GEF projects is to demonstrate technologies and their commercial and economic potential. Thus contributing to the wide dissemination of renewable energy technologies such as wind turbine, hydro, biomass and geothermal.

　　Mauritania is one of the windiest countries in West Africa. Wind data indicate that wind generation system may be more economical over their life cycle than petroleum, gasoline, or diesel fuel. The GEF is therefore financing a five year project of $ 2 million aimed at establishing a mechanism for sustainable diffusion of small scale wind electric systems, which will also serve as a model for similar efforts in other developing countries. The project is designed to select, procure, install, test and evaluate 55 wind electric power systems of different sizes and configurations.

　　In Costa Rica, the Tejona wind project of $ 28 million aims at constructing a 20 MW demonstration wind farm. It aims also at familiarizing major regional utilities with how wind energy can integrate into generation systems.

　　The Energy Services Delivery Project of $ 55.3 million is assisting Sri Lanka in the construction of a pilot 3 MW wind farm, in addition to establishing a private sector renewable energy fund to support pre-grid, PV electrification, mini-hydro schemes and other renewable energy sources.

　　The Renewable Energy Development Project of $ 408 million is assisting China to install 19 MW wind farms at 5 sites, in addition to supplying about 200000 photovoltaic and PV/Wind hybrid systems to households and institutions in remote areas of four Northwest provinces. Likewise, the Alternative Energy Project of $ 186 million is assisting India to install a 41 megawatt wind farm.

　　Another GEF project of $ 15 million is furthering the adoption of advanced technologies for small hydro resources in India's hilly regions through the construction of 20 small hydro units to serve as models of replication throughout India.

　　The Eastern Indonesian Renewable Energy Development project of $ 58.8 million is financing about ten mini hydro project and one mini-geothermal project to displace high cost, isolated diesel power generation in remote are as of Eastern Indonesia.

　　The Renewable Energy Small Power Project of $ 141 million is catalyzing the penetration of private sector, grid-based renewable energy projects into the National Company's network of Indonesia through the construction of small renewable energy projects totally generating 65 MW, primarily biomass, sugar and palm oil mills, but also minihydro. The GEF is also financing in Indonesia the construction and operation of a 440 MW geothermal generation plant.

　　The promotion of a strategic partnership with key actors, including the private sector and the three Implementing Agencies is another key feature of the approach and design of GEF projects promoting the transfer of clean technologies.

The private sector

　　Recent economic development patterns including on going privatization have tremendously increased the role of private sector activities in the world economy. Over the past decade net private sector flows to developing countries, although limited to a small number of countries, have reached more than $ 250 billion while official development assistance declined to its lowest level since the '50s. Most of the existing environmental technology has been developed and is owned by private companies. In today's world economy, joint ventures and other forms of foreign direct investment have become an essential means of transferring state of the art technology and building the human and institutional capacity of developing countries, including supporting skills, training and adaptation of foreign technologies to local needs and circumstances.
　　In his statement to the World Economic Forum, held in Davos, Switzerland, in January 1999, the UN Secretary General, Mr. Kofi Annan, acknowledged that without the know-how and the resources of the private sector, many of the UN objectives would remain elusive. He challenged business leaders to join him in taking the relationship between the UN and the private sector to a higher level. He proposed to "initiate a global compact of shared values and principles which will give a human face to the global market". He also suggested that the Rio Declaration as well as the implementation of Agenda 21 adopted by the UN Conference on Environment and development be part of such compact. "I believe," he concluded, "that l am proposing to you a genuine compact, because neither side of it can succeed without the other. Without your active commitment and support, there is a danger that universal values will remain little more than fine words documents whose anniversaries we can celebrate and make speeches about, but with limited impact on the lives of ordinary people. And unless those values are really seen to be taking hold, I fear we may find it increasingly difficult to make a persuasive case for the open global market."
　　From the start of the GEF, there was a clear recognition of the significant contribution the private sector could make in achieving its global environmental objectives. The importance of engaging the private sector in a substantial way in GEF operations was recognized by the Instrument for the Establishment of the Restructured GEF. Paragraph 28 of the Instrument identifies the private sector among the various partners which the GEF is expected to engage. The World Bank Group, including the IFC was given the special responsibility of mobilizing private sector resources consistent with GEF objectives and sustainable development strategies of developing countries.
　　Accordingly, a number of GEF projects are designed to strengthen the role of the private sector. In India, the GEF Alternate Energy Project has provided GEF-assisted financing through the Indian Renewable Energy Development Agency (IREDA) to private sector sponsored wind farm, hydroelectric, and photovoltaic developments. The Electricity Generating Authority of Thailand (EGAT) is working through GEF funding provided for the Thailand Promotion of Electricity Energy Efficiency to encourage local private companies to manufacture more efficient lighting, refrigerators, motors and other key energy consuming devices and consumer appliances. In Brazil Bio-diversity project is promoting mechanisms to ensure that private sector businesses and business foundations with an interest in bio-diversity can participate in GEF funded project activities. In Chile, the GEF Reduction of Greenhouse Gases project includes a component designed to help stimulate formation of private Chilean energy service companies to help commercialize energy efficiency activities within the Chilean industry. In Pakistan, the Fuel Efficiency in the Road Transport Sector project aims to encourage private sector garage owners to engage in instrumented tune-ups of gasoline vehicles and diesel buses, as a means to increase the energy efficiency of the road transport sector. In Senegal and Cote d'lvoire, the GEF project on Control of Greenhouse Gas Emissions aims to establish, with the help of policy measures and financing mechanisms, local capacity to attract private sector participation in energy efficient building projects, both for retrofit and in new buildings, thus helping to strengthen private sector markets in this areas.
In addition to national interventions, the GEF in collaboration with the IFC has assisted in the establishment of a number of funds aimed at engaging the private sector in achieving global environmental benefits. During its pilot phase, the GEF provided $ 4.3 to the Small and Medium Enterprise Program administered by the IFC to stimulate greater involvement of private, small and medium scale enterprises in addressing the GEF's bio-diversity and greenhouse gas mitigation objectives. On the basis of the lessons learned from the pilot phase, this experimental program was replenished in 1997 with a capital of $ 52 million, including an additional GEF contribution of $ 16.5 million. The program provides funds to carefully screened intermediaries at long-term low-interest rates. The intermediaries commit to use the funds to finance GEF eligible small and medium scale enterprise projects, with either debt or equity investment.
　　The Photovoltaic Market Transformation Initiative administered by the IFC with a $ 30 million contribution from the GEF is meant to be a strategic intervention to accelerate the sustainable commercialization and financial viability of PV technology in the developing world. Especially for rural electrification. The initiative aims at making selected investments in private sector PV market development projects in the range of $ 0.5-5 million. The total project investment for this initiative is expected to be $ 85-115 million.
The GEF is also providing $ 15.2 million to the Efficient Lighting Initiative managed by the IFC with a capital of $ 50 million. The initiative is intended to disseminate to developing countries the new products resulting from advances in lighting technology, such as compact fluorescent lamps in order to accelerate the penetration of energy efficient lighting technologies.
The GEF is contributing $ 30 million for the Renewable Energy and Energy Efficiency Fund established by the IFC with a capital of $ 240 million. The Fund makes debt and equity investments in private sector projects in the renewable energy and energy efficiency sector. It focuses primarily on project portfolios in the $ 5-30 million range, a range often considered too small, too complex or too risky by institutional investors.

Strategic partnership

　　To maximize its impacts and to bring to bear the strength and the comparative advantage of its collaborating organizations, the GEF is entering into a strategic partnership with its three Implementing Agencies.

　　The first partnership is with the World Bank Group. GEF will aim to commit about $ 200 million while seeking world Bank Group commitment of at least $ 600 in co-financing. This initiative when finalized will enhance the penetration of new and renewable energy technologies in developing countries

　　The second is with UNDP. The GEF as the financial mechanism of the Riorelated environmental conventions responds to capacity building needs of developing country Parties based on guidance received from the respective Conferences of the Parties. The NU Development Program, through its 132 field offices. Is the lead U agency on issues related to technical assistance and capacity building. The GEF Secretariat and UNDP have agreed to launch through a strategic partnership a Capacity Development Initiative. This partnership will begin with an assessment of needs of developing country Parties in fulfilling their commitments under the Rio related environmental conventions. The assessment will be prepared in close consultation with developing country Parties, the secretariat of the Rio Conventions, as well as the Scientific and Technical Advisory Panel of the GEF. The GEF Council will have the result of this assessment at its meeting in the fall of 2001. And will consider modalities for the implementation of an action plan.

　　The third strategic partnership is with the United Nations Environment Program (UNEP). The establishment of a Scientific and Technical Advisory Panel is a clear indicator of the importance attached by the GEF to promoting scientifically sound projects. The fact that the UNEP was entrusted with the responsibility of providing support to the Scientific and Technical Advisory Panel is also a recognition by the GEF of the comparative advantage of UNEP on issues related to environmental science and technology. The GEF Secretariat and the UNEP have therefore agreed to enter into a strategic partnership aimed at mobilizing and engaging the scientific and technical community, in particular from the developing countries, in support of GEF objectives. To this end, UNEP is establishing, operating and moderating a geographically balanced, Internet based, interactive forum for scientific, technical and engineering communities. The forum is encouraged to share and exchange views on identified scientific and technical issues related to the GEF operations. Summaries of the conclusions of the forum are expected to reviewed by Scientific and Technical Advisory Panel of the GEF and used to enhance the scientific and technical underpinnings of the GEF operations. The GEF Initiative on Integrated Management of Land and Water in Africa was selected as the first issue for such interactive forum.

　　In the areas of technology assessment, UNEP is carrying out for the GEF an assessment of the potential for the commercialization of conjunctive photovoltaic-hydro power generation. The study based on the Philippines CEPALCO project adopted by the GEF Council in May 1999, will aim to identify world wide potential for enhancing the benefits of PV plants through the PV hydro conjunctive use approach. It will endeavour to identify power utility systems in developing countries that would be suitable for the installation of several thousand MW of PV power generating plants that will operate in conjunction with existing hydro power stations that are facing seasonal water constraints.

Clearing house mechanism

　　Under the UNEP/GEF strategic partnership, the UNEP will establish, operate and maintain a Clearing house Mechanism for technology and know-how transfer. The objective of such a Clearing house is to design and deliver integrated information and advisory services that promote investments, including by the private sector, in environmentally sound technologies in the GEF focal areas of bio-diversity, climate change, international waters and ozone. It will also provide assessments and information that may direct technology investment and management decisions to more environmentally sound and globally sustainable business opportunities.

　　More specifically, the Clearing house will enable alternative technology and business assessments and feasibility work, which could become instrumental in promoting cleaner in vestments. It will seek to stimulate public and private sector entrepreneurial interest from developing countries in promoting project ideas that will contribute to the implementation of the GEF objectives and will enhance demand for cleaner technologies.

　　The Clearing house will also serve as the hub for existing networks that facilitate industry leadership on global environmental issues and enable governments, businesses and non-governmental organization to share insights and experiences and to develop and implement concrete actions to limit greenhouse gas emissions and promote the sustainable use of bio-diversity.

　　This initiative will build on the ongoing UNEP/GEF project on directing investment decisions to promote the transfer of cleaner and more climate friendly technologies. The objective of this medium sized project is to direct pending private sector investment decisions towards energy efficiency and renewable energy technology alternatives with a global environmental benefit so that cleaner technologies are chosen on the basis of their economic viability. This will be achieved by providing finance and know how for customized appraisals of alternative options. By financing alternative appraisals the project aims at bridging information and awareness gaps that exist between private sector borrowers, their lenders, and energy technology providers.

　　The activity will complement on going UNEP initiatives such as the Clearing house and networking activities being implemented by the OzonAction program, which strengthen local capacities of developing countries to implement the Montreal Protocol. Through information exchange, training and networking services, the Ozone clearing house aims at raising awareness and building skills required to identify and promote alternative technologies and implement appropriate environmentally sound policies and practices.

Action plan

　　The UNEP/GEF strategic partnership has been identified as one of the important elements for the implementation of the Action Plan on complementarity between the activities undertaken by UNEP under the GEF and its regular work program. The Action Plan was adopted by the 20th meeting of the UNEP's Governing Council held in Nairobi in February 1999. It was subsequently endorsed by the 13th session of the GEF Council held in Washington, DC. In May 1999. It has been considered a cornerstone in enhancing the role of UNEP as one of the three Implementing Agencies of the GEF. As evidenced by the UNEP/GEF strategic partnership, most of the activities contained in the Action Plan are meant to be carried out in partnership with other organization, building on UNEP's traditional networks in the broader scientific and technical community. In conformity with its catalytic mandate within and outside the UN system, the Action Plan will be implemented in collaboration with other organizations, including government and scientific agencies, civil society, the private sector and the UN, bilateral and multi later al donors. To this end, UNEP through its Division on Technology, Industry and Environment, is entering into a partnership with Turner Foundation in what is known as the United Nations Fund for International Partnership (UNFIP) to promote an African Rural Energy Enterprise Development Initiative (AREED). It is a well established fact that in Africa, nine of ten people have no access to electricity and three fourths of the energy comes from limited supplies of traditional fuels.

　　This $ 2.5 million initiative aims at promoting new and renewable energy technologies by disseminating best practices and lessons learned elsewhere, It will be implemented as a pilot project in Botswana, Gambia, Ghana, Cote d'lovire, Namibia, senegal and Zimbabwe.

　　In collaboration with UNFIP, UNEP is also promoting a Global Reporting Initiative. This $ 3 million project, to be implemented in collaboration with the Coalition for Environmentally Responsible Economies (CERES), aims to put in place a new information disclosure structure to ensure credible corporate accountability worldwide in the 21st century.

　　Based on its mandate and its comparative advantage, the Asian and Pacific Center for Transfer of Technology (APCTT) has an important role to play in promoting environmentally sound technologies in support of the objectives of sustainable development.

The future

　　While the GEF contribution to advancing technology transfer cooperation among nations is recent, it will be enhanced as the GEF continues to learn from past experience. The GEF contribution, though modest, is a major step in the right direction. Undoubtedly this contribution will be enhanced as a result of the UNDP/GEF Capacity Building Initiative, to be finalized in the fall of 2001, as well as the UNEP/GEF partnership on the mobilization of the wider scientific community. They will assist in identifying the technological needs of developing countries as well as the economic, financial and information barriers and the ways and means of strengthening the institutional and human capacity for access to appropriate technological information and know how.

　　This assessment will be undertaken in close cooperation with the Secretariat of the UN Framework Convention on Climate Change which has been mandated by the 5th meeting of the Conference of the Parties, held in Bonn in November 1999 to promote the transfer of technology for the implementation of the Convention and its Kyoto Protocol.

　　It will also coincide with the finalization of the study undertaken by the Inter-governmental Panel on Climate Change on methodologies and technological issues related to technology transfer. It will therefore be a more responsive to the technology needs of developing countries for the implementation of their commitments under the Rio Conventions. It will lay the foundations of strong GEF governmental partnerships for the transfer of environmentally sound technologies.

Australian research alliance with Japan and Korea

The Commonwealth Department of Industry, Science and Resources, which manages Australia's involvement in scientific and technological cooperation with Japan and Korea, provides grants to support research industry collaboration through its Targeted Research Alliances program. This program aims to improve Australia's access to global science and technology by supporting commercially focused international collaboration.

Targeted Research Alliances program, This program aims to improve Australia's associated with international networking activities such as collaborative research, workshops and scientific missions.

The current priority areas for collaboration are: Agribusiness and food processing. New materials technologies, Biotechnology, Manufacturing technologies, Energy technologies, Marine technologies, Environmental technologies, Medical science and technology, Information technologies, Mining and minerals processing technologies.

For more information, contact:
Mr. Peter de Souza
Assistant Manger
Japan, Malaysia, United Kingdom and the European Union
International Relations and Technology Diffusion Branch Department of industry, Science and Resources.
Canberra, Australia:
Tel: 02-62136381
E-mail: Peter.deSouza@isr.gov.au

Mr. Mary Argall
Assistant Manger
APEC and North Asia
International Relations and Technology Diffusion Branch Department of industry, Science and Resources.
Canberra, Australia:
Tel: 02-62136386
E-mail: Margall@isr.gov.au

For further information, please visit our website at http://www.ausindustry.gov.au/tdp