Major Economies Business Forum:
Perspectives on Technology
Key Messages
The commercial adoption of cost
cost-effective low-emitting
emitting technologies will be one of the most importantfactors in reducing greenhouse gas emissions, especially over the longer term.

Commercial transactions in technology development and adoption, including those implemented withinternational support or through offset programs, are critically important in accelerating technology
diffusion. International climate--related
related technology activities should complement and reinforce this role.

Enabling frameworks for wider commercial use of clean technologies, including recognition of
intellectual property rights, are a necessary prerequisite to technology development and commerce.

The operating environment for technology is often overlooked. Technology activities should extend toenabling frameworks, building infrastructure and efficient energy systems, training, and capacitybuilding.

The activities of the proposed Technology Executive Committee and the Climate Technology Centre andNetwork should be technology neutral.

Governments should take note of the experience of the Asia
Asia-PacificPacific Partnership, which has a strong
private-sector component.

An overly bureaucratic Technology Mechanism may not attract private sector participation.

Introduction
Improving technology is of key importance inaddressing climate change, supporting sustainably
development, promoting secure energy supplies,and encouraging continued economic growth anddevelopment in developed, emerging, anddeveloping economies.
Business has enormous experience in technology
development and commercialisation. The halting
progress of the climate talks has stalled manybusiness plans. Technology choices and investment
plans, in particular in the energy sector, will reachacross decades. Politicians must move quickly tocreate the right frameworks and systems that allow
business to develop and deploy useful solutions andto avoid the lock-in of current higher emission
technologies.
While opportunities exist today, based on
improving energy efficiency and accelerating
deployment of existing technologies, efforts areneeded to promote rapid improvement in rates ofinnovation if the globe is to achieve deep long-termemissions reductions.

Many low-carbon technologies are already at hand,and a major challenge is to find ways to accelerate
the commercial use of those technologies, to build
local skills and capacity, to develop systems thatallow integration of alternate technologies, andlower their cost through experience.
Existing technologies can make a start, but they are
not capable of achieving deep, long-term global
emissions reductions at an acceptable cost. New
and in some cases revolutionary energy and othertechnologies, many still years if not decades overthe horizon, will have to be developed and adopted
commercially along with the infrastructure tosupport them. But there is a great deal of
uncertainty about how fast, or even if, thesetechnologies will progress. An accelerated program
to improve the performance and lower the costs ofadvanced technologies can, if successful, expand
the range of economically and politically viable
policy options available to decision makers.
The importance of technology can be expressed
quite simply by using the so called Kaya Identity(Figure 1).
Figure 1. The Kaya Identity

The challenge is immense, and there are no quick
and easy answers. Focusing on roles can assist
business, governments, and institutions to step up
to the climate change challenge. BizMEF represents
companies with almost endless practical technologyexperience—and the group is more than willing toshare views and discuss the next useful steps. At theend of the day, it is technology that will deliver
economic growth and decouple it from emissions.
Strong companies will be able to invest resources indeveloping and commercialising even better climatechange solutions.

Importance of technology
How rapidly advanced energy technologies develop
and are adopted commercially will be one of themost important factors in determining how quickly
and at what cost greenhouse gas emissions can bereduced.

December 7, 2010

Every community strives to increase its wealth topursue a range of important priorities. Increasing
wealth will increase greenhouse gas emissions
unless steps that reduce energy intensity andcarbon intensity of the economy are introduced.
Technological change is a powerful tool for

2|Pagedecoupling economic growth from emissions
growth. Developed regions and less developed
regions are at different points on the technology
curve, especially on deployed technology andinfrastructure. In part this reflects legacy markets
and national circumstances. Therefore two points
are of particular interest:
1. how to deploy existing technologies; and2. how to facilitate further development ofcurrent technologies and innovation andcommercial use of new technologies?
As a group that represents millions of companies
throughout the world, we strongly emphasize therole of commercial transactions in technology
development and adoption, and the need for UN
Framework Convention on Climate Change(UNFCCC) activities on technology to recognize,complement, and leverage this role. On a daily
basis, businesses throughout the world engage invery concrete activities, both in home markets andfurther afield, to facilitate the full technology supplychain. These investments are major drivers forenhanced energy efficiency.
Thus the business community has invaluable hands
on experience, not only of specific technologies, butalso of supporting processes that assist technology
development and diffusion. With this in mind,
business encourages our respective governments toconsider the following during their meetings anddiscussions on a new climate change framework.

Policies must
technologies

facilitate

ratherthanpick

Climate change is a long-term challenge that willneed to be addressed over many decades. Some
issues are immediate and should be addressed on anational basis, through national or regional policies;
other issues will need long-term management andinternational cooperation. The international climate
negotiations will not be able to, and should not,deliver detailed regulatory systems. What businessasks for are predictability and the enabling
conditions needed for practical and effective
policies at the national level.
December 7, 2010

The market can only function if basic market
conditions are at hand. Overall this requires
establishing appropriate enabling frameworks that
include: rule of law; honoring contracts; just andimpartial judicial systems; stable fiscal and policy
regimes; free and open markets; and protection of
intellectual property rights (IPR). IPR in particular isa critical foundation for technology research,development, and commercial adoption, and should
be maintained. Innovation and global deploymentof cost-effective efficiency and low-emission
technologies are essential to achieve global climatechange goals as well as to maintain thecompetitiveness of companies and the necessary
incentives
forinvestment,growth,andemployment.
In this context, retaining a strong IPR regime andother commercial market-based mechanisms isimportant to maintain incentives for private sector
investment in research and development, andultimately commercial adoption of advanced
technologies. IPR and commercial, market
opportunities are a key driver of investment in R&D,
innovation, and dissemination of the results.
Effective IP protection allows innovators to capture
the value of R&D activity and stimulate investment
in innovation. Effective IPR policies that ensurepredictability and legal certainty for all stakeholders
are vital to facilitate joint ventures, licensing
agreements and other commercial arrangementsthat are effective methods for technology diffusion,innovation sharing and the exchange of know-how
and best practice. IPR has become a high-profile
issue in the negotiations, especially in thetechnology transfer discussions. Some havechallenged the IPR regime, arguing that IPR is abarrier to technology transfer and thus to climatefriendly economic growth.
However, this is not the case. Strong IPR, theremoval of trade and other market barriers, and thedeployment and dissemination of technologies go
hand in hand. IPR is not a barrier to technology
transfer but a necessity for developing thetechnologies worth transferring, and to facilitate
the day-to-day transfer and dissemination of such
3|Pagetechnologies through procurement, joint ventures,international cooperative business arrangements aswell as licensing and basic, market-based sales.
Adequate tools and processes exist—outside therole and responsibility of the UNFCCC—to assure
this today and to evolve in the future. The UNFCCC
should avoid deliberations and measures to address
IPR.

implementation and outcomes, not technologies(except as they provide guidance to feasibility).
Governments should allow the widest range oftechnology flexibility to allow the market to be able
to find the best solutions. We need politicians torealize that through innovation, the current
performance of all technologies may improvesignificantly in unpredictable ways.

Any technology can only perform effectively if it isfitted into a system. It is therefore not just about
technologies as devices, but the systems in which
they operate to provide the processes, goods, andservices on which economies depend. Energy
efficiency, for example, is as much about systems
management as it is about the efficiency of
individual pieces of equipment and appliances.

The efficient allocation of resources using markets
and trade is therefore pivotal for business. A
particular point for consideration is the catch-allphrase “Environmentally Sound Technology” (oralternatively “Climate Friendly Technology”). Fromthe perspective of business, it is unclear what thephrase EST means or implies and what role
governments will have in defining it. There is a riskthat the definition governments settle on could
unnecessarily
restrict
technology
choices.
Technology should be a bottom-up process—countries should be able to pursue technologies
that meet their national needs and circumstances
and that are politically and socially acceptable.

This applies for investment in buildings, production
technologies, and national/regional infrastructure.
All nations share this particular challenge.
Developed nations that have relatively highmarginal carbon dioxide reduction costs need
improvement of infrastructure, in particular energy
infrastructure, to reduce emissions, and must
replace existing capital stock at the end of its
economic life. Least developed regions that areabout to build up basic infrastructure can leapfrog
and make useful upfront choices by learning fromdeveloped regions.

What a Technology Mechanism should focus on

The role of public investment and management ismost prominent in the context of infrastructure.
Therefore we urge politicians and climate change
negotiators to focus on these basic requirements.
Besides physical systems, such as pipelines andtransmission lines, infrastructure also includes
human capacity, such as education in essential skills
and the ability to formulate effective policies in atimely fashion. Once these are in place further
private investments in technology solutions can beutilized far better.

Negotiators appear to have concluded that aTechnology Mechanism will be part of the post2012 agreement, though they have not agreed yet
on its scope, functions, or composition. We fullyrecognize that such an institutional vehicle can be a
key part of building constructive relations between
partners and nations. Rightly designed, thismechanism can indeed form a useful stepping stonethat will increase transparency and thus support
business engagement and market performance.
There are many suggestions under consideration
proposing exactly how to construct it. BizMEF
partners are interested in discussing withgovernments how the Technology Mechanism will
work and what appropriate role the business
community can have.

Governments should point the direction by setting
reasonable, clear, and realistic goals. Reduction
goals should be set based on reduction potentials,
considering existing and realistically foreseeabletechnologies. The focus should be on

Further, it is not clear if the Technology Mechanism
will focus on diffusion of existing technologies only,or if it will have an R&D aspect. No doubt the fulltechnology value chain should receive attention,
but a program focused on technology R&D would

December 7, 2010

4|Pageneed a different structure. Governments are
discussing commitments relating to increased R&D
funding. As important as these are, they should beconsidered separately. The group recommends thatthe institutional structures of the Mechanism focus
on:



assessment of needs;
identification of gaps and capacity; andpotential solutions that if established could
promote accelerated adoption of existing
technologies.

In particular some proposals in the formal
negotiation texts suggest roles for the Technology
Executive Committee (TEC) and the Climate
Technology Centre and Network that seem toconflict in some cases with the technology
neutrality criteria. All technologies face various
constraints and challenges, many of which may beovercome through innovation.
Capacity building is necessary. Individual nations
have different circumstances in which particulartechnology requirements must be shaped. In thesecases focused capacity building and training isneeded. Many developing countries in particular
are ill-prepared to accept certain advanced, lowcarbon technologies. While financing appears to bea big focus, the Mechanism’s activities shouldextend to enabling frameworks, training, andcapacity building. Project definition, selection andfinance should not be included in the mechanism.
Leave technology choices to the market. However,the choice of particular technologies must align as
closely as possible with research into potential
technologies, developed in dialogue with business,
recognising that ultimately, technology choices
must be left to the market. And if the problem is acomplete lack of market and infrastructure andother underpinnings, the focus of the technology
mechanism must be on how to create a local
market. In any case close dialogue with business isneeded—any business will readily share knowledge
that will enable them to reduce risk and improvethe value added of their particular investment.

December 7, 2010

Learn from valuable experience with existing
public-private partnerships. Another importantmatter is how we can learn from useful existingmodels. For example experience of the Asia PacificPartnership (APP) should be included in the work,
particularly the partnership with the private sector.
While APP is not a perfect analog for theTechnology Mechanism, it provides a good casestudy of what works and what does not. APP’s
sector-specific approach and focus on public-private
partnerships may be a good model that drives
practical solutions.
Avoid burdensome bureaucracy. Last but not least,
the Technology Mechanism should avoid thebureaucracy
thatundermines
theCleanDevelopment Mechanism. The decision process
should understand and reflect the realities ofbusiness decision timelines. This is absolutely key as
experience shows that wrong choices upfront
rapidly crystallize into routines and values that canbe extremely difficult to change. Therefore we also
recommend that the Technology Mechanism starts
out as focused and simple as possible. It is better tobuild a light but well functioning vehicle that can be
developed as experience and track record emerge,than to develop an overweight creature that will
never be able to fly. Business will be able to spot
such a bad case immediately - and useful time andinvestment opportunities will be lost.

Composition
CommitteeofTechnology

Executive

Business believes that the TEC should be composedof a workable number of representatives fromnational governments, drawn in a balanced fashion
from developed and developing nation and regions.
TEC should draw on the vast range of existing
institutions and players for technology advice,including relevant government ministries andagencies, intergovernmental institutions (e.g.,International Energy Agency and International
Renewable Energy Agency), sectoral and multisectoral business associations, professionalsocieties, and others.

5|PageWe do not believe that a small, unrepresentative
handful of “business” appointees drawn from alimited pool with a limited range of views andexperience could represent adequately the breadthof available information or be familiar enough withthe dynamics that drive the modern global

economy. Such a narrow panel of experts could
imply a business consensus where none exists. A
key to success will be the ability of TEC to tap in to
the full range of ever-changing technology
information that is available from existing channels.

Australian Chamber of Commerce and Industry
Australian Industry Group
BUSINESSEUROPE
Canadian Council of Chief Executives
Confederation of British Industry
Confederation of Indian Industry
Dansk Industri
Confindustria
Federation of German Industries - BDI
Iniciativa para el Desarrollo Ambiental y Sustenable – IDEAS (Mexico)
Korea Chamber of Commerce & Industry
Mouvement des Entreprises de France
Nippon Keidanren (Japan Business Federation)
US Chamber of Commerce, Institute for 21st Century Energy
US Council for International Business

About BizMEF
The Major Economies Business Forum on Energy Security and Climate Change (BizMEF) is a partnership of major
multi-sectoral business organizations from major economies. Modeled after the government-to-government
Major Economies Forum, BizMEF is a platform for these groups to:promote dialogue and exchange views on climate change and energy security across a broad spectrumof business interests including major developed, emerging, and developing economies;highlight areas of agreement among participating organizations on the most important issues forbusiness in international climate change policy forums; and

share these views with governments, international bodies, other business organizations, the press, andthe public.

Organizations that have participated in BizMEF meetings represent business groups in Australia, Brazil, Canada,
China, the European Union, Denmark, France, Germany, India, Italy, Japan, Kenya, Mexico, the United Kingdom,
and the United States. Collectively, BizMEF organizations represent more than 25 million businesses of every
size and sector. Because BizMEF partnering organizations represent a broad range of companies andindustries—including energy producing and consuming companies as well as energy technology and service
providers—the partnership is able to provide robust and balanced views on a range of issues.
For more information on BizMEF, please visit our website at: www.majoreconomiesbusinessforum.org.

December 7, 2010

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