No. 2023-14 - Intellectual Property Rights, Climate Technology Transfer and Innovation in Developing Countries

Abstract:

Does the current international Intellectual Property Rights (IPR) system inhibit or promote climate technology transfer and innovation in developing countries? This study summarises insights from a systematic review of the theoretical and empirical literature and 20 semi-structured interviews with key innovation experts (entrepreneurs, IP officials, and policy makers) in four developing countries (Bangladesh, Kenya, India, and South Africa). We identify three areas where IPR systems may matter: (1) climate technology transfer from foreign countries, (2) indigenous innovation by domestic inventors, and (3) follow-on adaptive innovation building on imported technology. Our results show that the relevance of IPRs in the climate context is likely overstated and the discussion focus on IPRs is often perceived as distracting rather than helpful. Inventors in developing countries are frequently not aware of IP systems. There is insufficient evidence that weak IP systems hinder (climate) technology diffusion when market opportunities are sufficiently high. Further, most mitigation technologies needed in developing countries are old, low-tech, or nature-based, and IP protection does not play a significant role. Instead, demand-pull policies fostering the diffusion of existing solutions (e.g. policies for creating climate-supportive innovation ecosystems) rather than the invention of mitigation technologies appear more relevant. Adaptation technologies differ, as local needs are more specific and foreign inventors (especially from developed countries) have little incentive to develop these solutions. Indigenous innovation creating original solutions tied to local needs may be needed fill this gap in the development of relevant technologies. Our results show trade marks and utility models, instead of patents, have great potential to motivate indigenous and follow-on adaptive innovation that meets the local needs. While the current debate from literature focuses on technology transfer from developed countries, recent technology trends highlight the increasing importance of climate technology innovation and transfer originating from developing and emerging economies. Trade policy could play a more significant role for these technologies than IPRs. We do not find any clear rationale in favour (or against) weakening the current TRIPS regime, for example, by expanding IPR waivers to climate technologies. The study concludes with proposals of how policy in developing and developed countries can promote climate-friendly development.