Joëlle Noailly, Graduate Institute, Geneva

While the developed world is trying to transition to a more carbon-neutral energy mix, developing countries are struggling to secure sufficient energy to meet basic human needs. The International Energy Agency (IEA 2012) states that, “Over 1.3 billion people are without access to electricity and 2.7 billion people are without clean cooking facilities. More than 95% of these people are either in sub-Saharan African or developing Asia and 84% are in rural areas.” In this context, the diffusion of low-cost clean energy technology from developed to developing countries is essential and remains a challenge.

The topic of clean energy technology diffusion was discussed on 26-27 May 2016 at the Graduate Institute (Geneva, Switzerland) during a scientific workshop on “Climate policy innovation and the access to clean energy technology in developing countries” organised by Prof Liliana Andonova and Dr Joëlle Noailly from the Centre for International Environmental Studies at the Graduate Institute with the support of the INOGOV COST Action and the Swiss Network of International Studies (SNIS). The workshop conveyed 20 academic experts from various countries and interdisciplinary backgrounds to share views and experience on clean technology diffusion to developing countries.

The workshop reviewed barriers to the diffusion of low-cost clean energy technologies to developing countries and to the governance mechanisms (policies and international cooperation) that can help unlock diffusion and improve energy access. While there is a wide recognition that innovation is an essential element of the transition toward a green economy and sustainable development, there is considerably less understanding on what processes and institutions can facilitate wider and more equitable access to clean technologies. The workshop identified four main channels to facilitate such diffusion: environmental policy design, strengthening local institutions, trade policies and global governance.

Designing environmental policies for developing countries contexts

Policy support for clean energy technologies is critical given the market externality intrinsic to this sector: in the absence of a price on pollution, economic agents always have too few incentives to invest in clean technologies. Hence, environmental policies, such as carbon pricing or command-and-control regulations, are justified to encourage clean technology innovation and adoption. Yet, there are reasons to believe that the policy instruments that worked in developed countries may be less effective in developing countries contexts.  Market incentives may only work poorly in countries where a large part of the economy falls under the informal sector. Implementation issues may hinder command-and-control instruments as monitoring and enforcement is particularly difficult in developing countries (Harrison et al, 2015).

In this context, academic literature has emphasised that the role of information policies and social learning may be more important than for developed countries (Blackman, 2010).. As an illustration, Adejonwo-Osho, (2016) presented evidence during the workshop that awareness programs and product demonstration – such as the Oando initiative – helped to encourage rural households to switch from predominant use of kerosene to LPG for cooking. A study by Srinivisan and Carratini (2016) also shows that peer-group effects are effective in helping to diffuse clean cooking fuels in India.

Building stronger local institutions

More generally, domestic policy support for clean energy technologies is difficult in developing country contexts due to weak institutions. The workshop sessions on fossil-fuel subsidies and investments particularly emphasised this problem. Chelminski (2016a and 2016b) concluded that reforming fossil-fuel subsidies in Indonesia proved particularly difficult in the absence of political determination and sound macro-economic policy making. A broad study by Anadon et al (2016) also emphasised that reforming existing institutions to promote clean energy innovation and technology adoption is possible, but requires re-orienting existing innovation systems towards sustainable development in a manner that considers all innovation stages and decision-making at the outset. Case studies conducted by Harley (2016) showed that building strong local capacity and innovation systems geared towards creating local champions were effective to increase the adoption of solar-powered irrigation in agriculture in South-East Asia.

Trade liberalisation

The role of trade is often discussed in relation to environmental concerns in developing countries. A recurrent concern is that trade liberalisation could lead to creating pollution havens if developed countries are moving their dirty activities to developing countries (Levinson and Taylor, 2008). At the same time, lowering trade barriers may play an important role in facilitating the international diffusion of technologies, thereby mitigating potential pollution haven effects. Regarding low-cost clean technologies in particular, Srinivisan (2016) shows for instance that trade agreements with top-exporters of energy-efficient lighting technologies (such as China in the case of CFLs) were an effective means of facilitating the transfer of these technologies to low and middle-income countries. The role of trade is worth emphasising further in policy circles. Current patterns of liberalisation of environmental goods and technologies show different levels of ambitions across countries, and this could imply different speed of diffusion of clean technologies (Elsig and Surbeck, 2016).

Global governance for clean energy technologies

Finally, the workshop called for developing a new research agenda to examine the role of international clean energy governance. What governance structures currently exist to support the UN Secretary General and other policymakers in advancing a clean energy transition? What role could a regime complex for clean energy governance play? While Andonova and Chelminski (2016) provide a first systematic data analysis on the range of international organisations and initiatives engaged in clean energy governance, further research is needed on the impact and overall effectiveness of the current regime complex government arrangement in the clean energy domain, where there are relatively weak formal provisions and a plethora of funding initiatives, policy support and direct implementation through transnational partnerships.

Further information:

The discussion and results presented during this INOGOV workshop provided inputs for the Green Economy programme of the United Nations Environment Program (UNEP), the main policy partner of the project. Several of the papers presented at the workshop were published as UNEP Working Papers in Autumn 2016.

Link to Video of Workshop:  https://www.youtube.com/watch?v=zczbKd00mSE

 

References:

Adejonwo-Osho , O. (2016) Barriers to the diffusion of clean energy technologies in Nigeria: Case study of the Oando low cost LPG Initiative, Unpublished manuscript, University of Lagos.

Anadon, L. D., G. Chan, A. Harley, K. Matus, S. Moon, S. L. Murthy and W. C. Clark  (2016) Making Technological Innovation Work for Sustainable Development, PNAS,  113 (35) 9682-9690.

Andonova, L. and K. Chelminski (2016) Emergence of a regime complex for clean energy: the critical role of legitimacy. Under review.

Blackman, A. (2010) Alternative Pollution Control Policies in Developing Countries. Review of Environmental Economics and Policy, 4(2): 234-253.

Chelminski, K. (2016a) “Redefining Success in the Fossil Fuel Subsidy Reform in Indonesia”, CIES Research Paper No 44 and UNEP Working Paper, July.

Chelminski, K. (2016b) Lessons from Indonesia’s Fuel Subsidy Bonfire. Op-ed in Climate Home, June 14. http://www.climatechangenews.com/2016/06/14/lessons-fromindonesias-fuel-subsidy-bonfire/

Elsig, M. and J. Surbeck, F. (2016) Who is really serious about the green economy? An empirical assessment of green goods liberalization in developing countries, to appear as

World Trade Institute Working Paper.

Harley, A. (2016) Powering Agriculture with Sunshine in South Asia: An Analysis of Solar Powered Irrigation in Bangladesh, India, Nepal and Pakistan, Paper presented for the INOGOV workshop on  “Climate policy innovation and the access to clean energy technology in developing countries”, May 26-27 2016, Geneva

Harrison, A., Hyman, B., Martin, L., & Nataraj, S. (2015). When do Firms Go Green? Comparing Price Incentives with Command and Control Regulations in India (No. w21763). National Bureau of Economic Research.

IEA. 2012. Modern energy for all: World Energy Outlook. IEA/OECD: Paris.

Levinson, A. and Taylor, M. S. (2008), Unmasking the pollution haven effect. International Economic Review, 49: 223–254.

Srinivisan, S. (2016) The light at the end of the tunnel: Impact of policy on the global diffusion of fluorescent lamps, CIES Research Paper No 45, July and UNEP Working Paper.

Srinivasan S., Carattini S. (2016) Adding fuel to fire? Social spillovers and spatial disparities in the adoption of LPG in India, CIES Research Paper no. 48, Geneva.

 

Photo: Flickr/Jeff Attaway.

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