Connecting countries to climate technology solutions
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Enhancing financing for the research, development and demonstration of climate technologies

Author:
Technology Executive Committee
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In recent years, climate technologies have been deployed on an unprecedented scale around the globe. Renewable energy technologies especially are now often competitive with fossil fuel options. But the global average temperature continues to rise. 2016 was the hottest year on record and the global temperature is almost 1°C above pre-industrial levels. To achieve the Paris Agreement’s objectives, we need to deploy climate technologies on a much greater scale. Researching, developing and demonstrating (RD&D) climate technologies is one part of the solution. Effective RD&D programmes improve the performance and reduce the cost of climate technologies, and yield new ones. Through such programmes, countries also modify technologies to local conditions, which will help them achieve their nationally determined contributions in a cost-effective manner. These programmes can also have significant social and economic value, supporting countries to develop capacities for undertaking the long-term technological transformation to a low-emission and climate-resilient future. Since its inception, the Technology Executive Committee (TEC) has explored how countries and the international community may enhance climate technology innovation, including RD&D. In this paper, the TEC continues this work by exploring how we may enhance financing for RD&D of climate technologies. It notes that R&D spending for renewable energy and agriculture technologies has been rising broadly, although it only accounts for a small share of global R&D expenditures. In recent years, though, renewable energy R&D finance has plateaued. The paper highlights that the private sector often plays an important role in the RD&D of climate technologies. Private R&D spending likely exceeds public funding for renewable energy while in agriculture the opposite seems to be true. It also notes that mechanisms exist for international R&D collaboration on agriculture and energy, but the scale of those efforts is small (either in global coverage, scope or resources). No information was found on RD&D expenditures for adaptation technologies. Based on the urgency of addressing climate change and RD&D financing trends, the paper notes the importance of RD&D financing for climate technologies, in addition to enhancing enabling environments and building capacity for deploying climate technologies. Governments may accelerate efforts to meet climate challenges by increasing public expenditure for climate technology RD&D. Indeed, in recent years some countries have pledged to significantly increase their clean energy R&D budgets. The paper notes that to stimulate private RD&D spending for climate technologies, governments can provide a clear policy signal of a long-term national commitment to reduce greenhouse gases and build resilience to climate change and support enabling environments that accelerate private investment. The working paper also highlights the importance of international collaborative RD&D programmes focused on climate technologies. By complementing national activities, these programmes may play a key role in supporting countries to accelerate climate action by drawing on comparative strengths and sharing the cost of investment. While some collaborative RD&D programmes exist, these could be enhanced both in scope and scale, paying attention to developing country needs. The paper also notes that UNFCCC bodies can support efforts to enhance financing for climate technology RD&D.

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