International technology agreements
141. There appears to be growing support for the idea that
Kyoto-plus should focus on technology and research and development.
Professor Scott Barrett of Johns Hopkins University notes that
such a technology-based approach has worked for ocean oil pollution
where, after years of trying unsuccessful procedures, standards
for ships to separate ballast water and oil were agreed.
These standards have been followed by others, such as double hulls
for new tanker ships. The features of this approach are (a) that
compliance is easily verified, (b) each state has an incentive
to protect its own waters from pollution, and (c) as more countries
ratified the agreement, the bigger the incentive tanker owners
had to comply because of the need to have access to as many ports
as possible. Professor Barrett asks if a similar approach cannot
be adopted for Kyoto-plus. International agreement on
R & D in low or zero-greenhouse gas technology might help
to lower future costs of these technologies at a rapid rate. In
the same vein, the bigger the scale of the technological innovation,
the lower the costs of adopting it. In some cases, adoption of
the technology by a major player, for example, the US or Europe,
will provide major incentives for other countries to adopt the
same technology in order to gain access to the markets of the
US and Europe. Vehicle technology is a case in point. As major
purchasers, technological standards set by large importers would
require that those technologies are adopted in the exporting nations.
Moreover, technology standards are compliant with the WTO rules.
Finally, incentives for technology transfer to the developing
nations would be built into the agreement.
142. The International Energy Agency (IEA) has estimated
that the R & D expenditure needed, if carbon-free energy is
to become economically viable through the use of solar photovoltaics,
biomass and carbon sequestration, is around $400 billion.
This is a little over 1% of current global annual GDP. This might
be compared to the costs of the 1963-72 US Apollo programme that
put man on the moon. The Apollo programme cost around 2.5% of
US GNP in about 1970, or 1% of then global annual GNP.
The IEA renewable energy programme would therefore cost about
the same now as the Apollo programme did then1%
of world GNP. Spread over 30 years, this $400 billion would
amount to around 0.03% of world GNP each year. Moreover, such
an R & D programme would be a true global public good: one
in which everyone would have a share of the benefits. An agreement
of this kind would have the potential to overcome the major obstacles
that currently inhibit further progress on tackling climate changethe
need to find incentives to get the United States and the developing
countries to join others in the quest for low carbon energy futures.
The US is already investing heavily in such technology. The developing
world would gain substantially by acquiring it. We offer these
thoughts as an illustration of what international negotiators
might now consideran agreement on technology and
143. We do not pretend to have worked through in any detail
proposals of the kind outlined above. The important issue is
to wean the international negotiators away from excessive reliance
on the "targets and penalties" approach embodied in
Kyoto. We acknowledge that this approach could work, provided
there was a powerful enforcement mechanism. The problem is that
countries are not going to agree to such an enforcement mechanism,
as the compliance negotiations over the Kyoto Protocol have already
shown. Existing international institutions such as the United
Nations simply do not have credible threats for participants to
secure compliance. Hence there should be urgent progress towards
thinking about wholly different, and more promising, approaches
based on a careful analysis of the incentives that countries have
to agree to any measures adopted.