UNFCCC requiring a new Patent Regime?

With more and more reports showing the increasingly close dangers of climate change due to global warming, delay is no longer a viable option in deciding policy matters of the United Nations Framework for Climate Change Convention (UNFCCC). The need for a global framework on fair and effective methods of controlling climate change is undeniable and that is what the UNFCCC, together with its Kyoto Protocol, seeks to establish. However, as past experience has shown on almost all global forums, it’s been extremely difficult for north and south countries to see eye to eye. The latest UNFCCC rounds at Bonn have proven to be no different with continued debate centered around the interests of developed countries as against those of developing countries. Although not always on the priority list of most countries, climate change is one of the most pressing problems of our times. The current situation with regard to climate change has mostly been brought about by environmental damage over the years, a majority of which has come from the now developed countries and it would be unequitable to require that developing countries now put their own interests aside due to the past actions of already developed countries. If developing countries are to carry on with their economic growth in an environmentally friendly manner (i.e., sustainable development) it’s vital that they have access to climate-friendly technology at affordable prices.

A few of the key Articles of the UNFCCC include Art. 4.3 which states that developed countries shall provide financial resources including technology transfer needed by developing countries to meet their agreed full incremental costs of implementing measures; and Art. 4.5 which states that developed countries shall take all practicable steps to facilitate and finance transfer of and access to environmentally sound technologies and know how particularly to developing countries and shall support the development and enhancement of endogamous capacities and technologies of developing countries.

At a workshop held in the beginning of June this year, the Ad-hoc Working Group on Long-term Co-operative Action (AWG-LCA) under the UNFCCC, developing countries have called for new technology transfer mechanisms which would better enable them to adapt and develop technologies of their own to address climate change. As a general observation, developing countries also seem to be calling for a new and innovative financial architectural structure the generate the required money and resources for more mitigation and adaption activities. Most developing countries called for all funding for these activities to come from only within the UNFCCC. The background reason to this is because the World Bank is planning to establish a portfolio of climate investment fund called the Clean Technology Fund. The main focus in this would be on mitigation and not adaptation technologies. This fund sees its origins in initiatives mainly by US, UK and Japan. Developing countries and civil societies have not been involved in the creation of these funds. In order to ensure that the US driven Clean Technology Fund doesn’t become a parallel policy maker, many developing countries have also called for a multilateral fund for climate change financing.

The Kyoto protocol, which separated a set of developed countries, as Annex 1 countries, laid down that these Annex 1 countries would aid developing countries in two main ways – financial help, as well as aid with transferring of technology. Evidently most developing countries are of the opinion that these Annex 1 countries haven’t been very successful in either.
In their meeting on June 5 at a roundtable discussion, certain tangible proposals with regard to operationalising the transfer of technology were put forward by China, Brazil, India and Pakistan among other countries. Meena Raman has covered a good portion of the discussions which took place in her article. I’ll be putting down portions more relevant to this blog.

India pointed out that this was not just a question of transferring technology by itself, but in order to effectively bring about the required change, methods of generating new technologies as well as research, development and deployment were required. Speaking about developed countries, it said that governments could compensate private companies for the transfer of technology from private players in them. Drawing a distinction from purely market based transfer arrangements, a more suitable IPR regime was called for by India, stating that this transfer of technology arises out of a responsibility of parties under the Convention without any requirement of reciprocity. India put forward the idea of sharing IPRs vide a research consortium. India also stressed upon the need for a more open source approach for science and technology and/or global financing arrangements requiring global public procurement of IPRs. It pointed out that in the context of global climate change urgent steps such as these were required. USA argued that IPRs should be viewed as a source of creation and innovation and as such stronger IPRs would be more beneficial. According to India however, the benefits of private players and the public needed to be more evenly balanced. While the innovator shouldn’t be denied his rewards, it’s equally important that the public sector has access to the technology and is able to make optimal use of it. It viewed this not as replacing IPRs but rather as a balancing act which provided inventors/innovators with rewards while at the same time ensuring that the technology is put to optimal use as quickly as possible.

India also spoke about the lack of countries willing to take on the task of negative emission commitments. It said that unless some parties were willing to take on negative emission commitments, there would soon be buyers but no sellers of carbon credit on the market.
What some call the last remaining super-power of the world, USA stated that it was already meeting all its obligations under Art. 4. It went on to say that the current discussions should be more practical. Private capital is what governments should be looking towards for help. In response to the further action being taken by developing countries, it stated that they needed more knowledge of the actions being taken before they could think of providing funding, and calling for developing countries to report their actions in a measurable, reportable and verifiable manner. In response to India’s position on the IPR regime, it stated that IPRs were a source of innovation and creativity and as such a stronger IPR regime would be more beneficial to access to technology.

(I recall reading this somewhere and I can’t resist mentioning it, perhaps providing some context, that though the Clinton administration was actively involved in the drafting of the Kyoto Protocol, the ratification of the protocol was rejected twice by the US Senate. The 2nd time the Bush administration stated that it wouldn’t sign an agreement that could potentially harm the country’s economic progress and did not require developing countries like India and China to also agree to set reductions.)

Pakistan focused on the affordable accessibility of required technology for developing countries. It had a mixed opinion regarding the role of IPRs stating that while it facilitates the development of technology, it also provides monopoly pricing power which acts as a barrier in the spreading of this technology. It proposed certain additional measures which would speed up the process of allowing the technology to spread which included compulsory licensing for climate friendly technologies at low cost, reduction of the period of patents, as well as incentives for owners of technologies which would facilitate the introduction of a system of differential pricing.
China put forward that Environmentally Sound Technologies (ESTs) that needed to be transferred would be effective only when they were grouped together as a comprehensive package. This package would include hardware, software, intellectual property rights, human resources, financial resources as well as an enabling environment which could be provided by a regulatory framework. It called for a new innovative international mechanism for these ESTs comprising of an institutional arrangement, an innovative financial mechanism and performance assessment and monitoring.

It also proposed an intergovernmental body for the development, diffusion and transfer of ESTs as well as the establishment of a Multilateral Technological Acquisition Fund (MFTA) for climate technologies. This could be based on a public-private partnership framework by providing incentives for the private sector and providing favourable conditions for EST related export credits, subsidies, etc. In this regard, it also spoke about the removal of barriers such as technology export bans and other regulations.

Brazil emphasized the fact that this was not an ordinary market situation and that it’s important that countries realize that an ordinary “business as usual” strategy wouldn’t suffice. Speaking about patented technologies, it stressed upon action befitting the urgency of the matter of climate change and spoke about the possibility of introducing compulsory licensing along the lines of what was undertaken in the health sector. It also stressed upon the need for public-private partnerships in developing countries. It also called for the consideration of incentives to stimulate technology transfer within companies with a view to strengthening capacity in subsidiary companies located in developing countries. It concluded by saying that there was a need for a new coherent and comprehensive instrument for technology development and transfer; and mechanisms for measuring, reporting and verifying (MRV as mentioned in the Bali Action Plan) the effectiveness of technology transfer to developing countries as opposed to the measurable, reportable and verifiable actions themselves. (i.e., the actual effectiveness of the actions, as opposed to mere actions)

Yvo de Boer, executive secretary of the UNFCCC, states that the relationship of IP to environmental technology is not an area fully understood. He says that more clarity is required on the issue before any special IPR arrangements can be made and lists it as one of the important issues to be addressed by parties in the two year negotiating process up to Copenhagen. When compared to the health industry, as it often is with regard to essential technology being transferred, he says that in pharmaceuticals there are only a limited number of medications that apply to a life-threatening disease however thousands of technologies are to be deployed when it comes to climate change and energy.

Unfortunately, while there are some technologies in the public domain, many key technologies are patented. It’s been seen even the rights arising from technology that stems from government funded R&D are to a large degree allocated to the research institute. These research institutes more often than not prefer to diffuse these climate friendly technologies by way of licensing or royalty payments rather than free usage in the public domain. Coming to patented products, compulsory licensing is something that should be considered more seriously. If the damage that’s being caused / going to be caused by the climate change is as serious as some reports show, then individual commercial interests must give way to more concerted action for the public good. Patented technology shouldn’t come in the way of developing countries getting access to them at affordable prices. There have already been instances of developing countries not being able to adopt climate friendly technologies due to prohibitive pricing. It’s in these instances especially that compulsory licensing would play a vital role. As important as IPRs are, the seriousness of the situation needs to be examined. Governments need to realize that commercial interests of a few aren’t more important than the millions of lives that are at stake due to global warming and take the necessary steps.

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