economic perspectives on international technology transfer in environmentally sound technologies

Transferring environmentally sound technologies (ESTs) to developing countries is a primary means of addressing issues of local ecological sustainability and global climate change. This chapter reviews the essential determinants of, and roadblocks to, effectively expanding such transfers. We pay particular attention to the roles played by formal intellectual property rights (IPRs), which are supposed to facilitate international technology exchanges through such market mechanisms as foreign direct investment and licensing. While there is general evidence to support this view, for various reasons the effectiveness of IPRs may be limited in the realm of ESTs. Moreover, IPRs raise the clear possibility that owners of patents in new and critical technologies could limit international access through restrictive licensing terms and potentially anti-competitive behavior. The chapter analyzes available policy alternatives, ranging from nuanced changes in the legal scope of IPRs in the global system to innovative international funding mechanisms, such as prizes and green technology funds.