Economic Instruments . I countries with economies in transition, as well as in non-Annex I countries. Barriers to International Initiatives Technology transfer of modern industrial capacity to non-Annex I countries and Annex I countries with economies in transition is being impeded by disagreements over intellectual property rights and a lack of available capital and hard currency. Other barriers include a lack of capacity and basic environmental legislation, and institutional factors in the host countries. There are currently legal and treaty impediments to implementing cooperative actions among firms to reduce greenhouse gases.
Many countries have anti-trust laws to prevent price collusion and monopolistic behavior by firms.
Within the World Trade Organization, there is concern about environmental protection as a potential restraint on free trade. These restrictions need to be examined to determine how environmental benefits, like GHG reductions, can be achieved by firms without compromising the intended goals of these rules. As the private sector takes on a larger role in addressing GHG emissions from industry, there will need to be greater transparency of these actions through reporting and verification mechanisms involving third parties such as non-governmental organizations, and governmental and international agencies. This upgraded replacement would be cost-effective if it occurred at the time of normal capital stock replacement.