EC Report - IPRs & Climate Change

Executive Summary

Access to technology for reducing greenhouse gas emissions is important for developing countries to help them address the challenges of climate change. The innovative technologies in this domain have become increasingly patented. In international climate change debates in the run-up to the 2009 Copenhagen Summit on Climate Change, the developing countries have regularly claimed that this strong presence of intellectual property rights on carbon abatement technology, owned by the developed countries, constitutes a major barrier to developing economies' greenhouse gas abatement efforts. The purpose of this study is to examine the validity of this claim. It traces patent protection and ownership data for seven relevant emissions-reducing energy technologies in a representative sample of low-income developing countries and emerging market economies, over the period 1998-2008.

[SNIP]

This leads to the conclusion that patent rights can not possibly be an obstacle for the transfer of climate change technologies to the vast majority of developing countries:
there are hardly any patents on these technologies registered in these countries. A relaxation of the property rights regime for the relevant technologies in these countries would not improve technology transfer to these countries.

[SNIP]

The reasons for an alleged insufficiency (if any) in the transfer of technologies to lowincome developing countries should thus be sought elsewhere: insufficient technical knowledge and absorption capacity to produce these innovative technologies locally, insufficient market size to justify local production units, and insufficient purchasing power and financial resources to acquire the innovative products. Solutions, if needed, should be sought in policies that aim to overcome these insufficiencies. Even without access to technology, some domestic policies could have a high direct pay-off, for instance a reduction in energy subsidies that reduce the private incentive to deploy cheap but effective abatement technologies. Grant subsidies from developed countries to encourage developing countries' access to specific IPR-protected carbon abatement technologies may actually distort the market and result in the acquisition of not very cost effective carbon abatement technology. Instead, support should compensate low-income developing countries for the overall economic burden of carbon abatement while preserving the countries' incentive to minimise the costs of that abatement.

Who Gains from TRIPS Agreement

Source: Global Economic Prospects and the Developing Countries (2002), Chapter 5 Intellectual Property: Balancing Incentives with Competitive Access, at Page 133

The International Bank for Reconstruction and Development / The World Bank 1818 H Street, NW Washington, DC 20433

[Quotation]

Yang and Maskus (2001) studied technology licensing. The figures in the last column of table 5.1 update their results of estimating the impacts of international variations in patent rights on the volume of unaffiliated royalties and licensing fees (a measure of arm’s length technology transfer) paid to U.S. firms. Japan had a large absolute response, reflecting the importance of licensing in the Japanese economy.

However, large impacts were also discovered in the Republic of Korea, Mexico, Brazil, and Indonesia. Indeed the analysis suggested that licensing volumes would double in Mexico and India, and would go up by a factor of nearly five in Indonesia.