The Role of Technology Policies in an International Climate Agreement

Prepared for The Climate Dialogue, Hosted by the Prime Minister of Denmark, September 2–3, 2008, Copenhagen, Denmark

Note

The Harvard Project on International Climate Agreements has agreed to help the Office of the Danish Prime Minister, in its role as incoming President of the 2009 Conference of the Parties, to prepare background papers and on-site briefings for a series of very high-level dialogues on climate change policy, hosted by the Prime Minister. These dialogues will each include about 25 participants, including CEOs of European and U.S. corporations, key officials from national governments and intergovernmental organizations, and leaders of major environmental NGOs. This paper on the subject of technology policies was prepared by the Harvard Project leadership for the second dialogue.

Achieving long-term climate change policy goals will require a remarkable ramp-up in the innovation and deployment of energy-efficient and low-carbon technologies.  This technological transformation must occur in an environment that is already experiencing substantial increases in investment.  The International Energy Agency forecasts more than $20 trillion of investment in the global energy infrastructure between now and 2030.  Some of this accelerated investment is evident in China, where one out of six coal-fired power plants is less than three years old.  But the investment is not universal; populations in least developed countries still suffer from lack of access to power and basic energy poverty that can inhibit advances along a variety of development measures.

Transitioning away from fossil fuels as the foundation of industrialized countries and as the basis for development in emerging economies and least developed countries necessitates a suite of policies to provide the proper incentives for technological change.  These policies will drive invention, innovation, commercialization, diffusion, and utilization of climate-friendly technologies.  Altering the orientation of $1 trillion per year in energy investments is no small task: the UNFCCC Secretariat recently estimated that investment in emission mitigation will need to be on the order of $200 billion annually by 2030 to return global emissions to current levels.  The critical role of developing and deploying climate-friendly technologies has drawn more attention to the impact of three categories of policies addressed in the three main sections of this paper: (1) international carbon markets; (2) technology transfer to developing countries; and (3) coordinated innovation and commercialization programs.