Publication by Woo Jin Lee, Irma Juskenaite and Rose Mwebaza
The 2030 Agenda for Sustainable Development and the Sustainable Development Goals (SDGs), the Paris Agreement, and a number of important agreements call on the United Nations (UN) to strengthen a relationship with the private sector to develop and transfer climate technology in global action on climate change. The Technology Mechanism (TM) is anchored in the UN Framework Convention on Climate Change as a key enabler for the attainment of the Goals of the Paris Agreement. The growing interest for collaboration with the private sector sets new ambitions for the UN Climate Technology Centre and Network (CTCN). The active engagement of the private sector is critical for successful technology transfer and successful innovation. This paper reviews and analyses the role of the private sector in facilitating technology transfer in CTCN’s Technical Assistance. Furthermore, the shared interest for partnership between the CTCN and the private sector was evaluated by analysing in-depths interviews with major CTCN stakeholders. Based upon this analysis, several recommendations are made on how to enhance public–private partnerships in order to strengthen private sector participation in climate technology transfer activities with a special focus on technology–push and market–pull innovation.
1. Introduction
To achieve an effective, long-term global response to climate change and to promote sustainable development, technology innovation is becoming more critical in delivering environmentally and socially sound, cost-effective, and better-performing climate technologies at a larger and more widespread scale [1]. The Climate Technology Centre and Network (CTCN) was established as part of the Technology Mechanism (TM) (the United Nations Framework Convention on Climate Change (UNFCCC) Technology Mechanism consists of two bodies: Technology Executive Committee (TEC) and the Climate Technology Centre and Network (CTCN)) in 2013 to address these issues with technology under the United Nations Framework Convention on Climate Change (UNFCCC) governance [2]. With the mission to connect developing countries to climate technology solutions, knowledge, and financing, more than 320 technology transfers are underway in more than 100 countries in various sectors.
While it is undeniable that the public sector still plays a key role in developing and supporting markets for climate technologies, there is a growing interest and commitment from the private sector to collaborate with different partners in promoting early deployment to create new markets through technology provision, financial support, and regulations to overcome particular barriers to deployment. The Hudson Institute confirms that private financial flows from all donor countries to aid-recipient countries account for 85% of their economic engagement with developing countries, whereas government (public) aid represents only 15% of the total engagement, the reverse of some 40 years ago [3]. Moreover, 92% of renewable energy financing is coming from the private sector [4], and recent research also shows climate technology investments far outpace, at five times, those of venture capital (VC) market rate from 2013 to 2019 [5]. New, innovative climate technologies are constantly being introduced to offset the impact of everyday activities, which causes climate change to turn into big business and the private sectors are taking notice.
This is the reason why a number of agreements including the 2030 Agenda for Sustainable Development and the Sustainable Development Goals (SDGs), and the Paris Agreement recognise and call on the UN to cultivate a strengthened relationship with the private sector. By providing its three core services of Technical Assistance, knowledge sharing, and collaboration, the CTCN matches national officials from developing countries with technology experts and financiers from its network. The analysis of the value proposition for the private sector undertaken as part of this study showed that, as of now, similar organisations in the market do not offer the exact services as the CTCN for private companies. They only offer the possibility for networking, learning, or technical assistance, but not the full package, thus putting CTCN in a niche position.
Thus, in this paper, in order to map the private network members’ interest and participation in the CTCN’s activities, we primarily identified various roles of the private sector as implementor, incubator, and investor in different stages of climate technology transfer especially during the CTCN Technical Assistance, based on a staged innovation model established in our previous work [6]. In addition, the shared interest for partnership between the CTCN and the private sector was evaluated as our secondary research by analysing in-depth interviews with current and potential network members, in addition to other partners successfully working with the private sector like the United States Agency for International Development (USAID). Based on the research methods of mapping and interviews, recommendations for enhanced public–private partnership (PPP) are proposed for climate technology transfer innovation by tailoring each role of the private sector in technology–push and market–pull innovation.
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