As a result, whether IPRs promote technology diffusion or not cannot receive a general answer solely based on theoretical arguments. Fortunately, several empirical studies have tested the different hypotheses. General studies dealing with all technologies suggest that strict IPR enforcement have an average positive effect on the volume of foreign technology transfers to developing countries. This effect is clear when the recipient country is technologically advanced and open to international trade (Sampath and Roffe, 2012). In this case, strong local absorptive capacities enable effective transfers, but also create a serious threat of imitation for foreign innovators (Maskus 2000; Smith 2001; Hoekman, Maskus, and Saggi 2005; Mancusi 2008; Parello 2008). Because it provides a safeguard against such imitation, strong IP protection then facilitates technology transfers in the recipient country. There is also empirical evidence that it encourages the use of knowledge-intensive channels such as FDI and licenses instead of the mere export of equipment goods (Smith 2001).

Several studies confirm these insights in the specific case of climate-friendly technologies. Dechezleprêtre et al. (2013), Barton (2007), and Maskus (2010) show that patenting has not been a barrier for the transfer of solar PV, wind power, and biofuel technologies in emerging economies. See also the analysis of the wind sector by Kirkegaard et al. (2009), that of the PV sector by Dechezleprêtre et al. (2011), and the study of the transfer of integrated gasification combined cycle— the most efficient coal power technology—to India (Ockwell et al., 2008).

These results are driven by the fact that climate-friendly technologies mostly exist in mature sectors wherein numerous substitutes can compete at the global scale. In this respect, the situation for low carbon technologies is not comparable today with the pharmaceutical industry in which certain drugs have no substitutes or with information technologies in which the existence of technical complementarity and compatibility issues induce “blocking” patents. But, there is no reason why green technologies would be immune to similar difficulties for eternity. In particular, the discovery of a “breakthrough” technology in certain sectors (e.g., CCS, smart grids, and biofuels) can change the landscape.

The case of less advanced countries that lack technological capabilities is different. In these countries, strengthening IP rights is not the key issue (Haščič et al., 2012). Stronger IP protection may even induce less transfers– as the threat of imitation is not a serious deterrent for foreign firms – but could generate stronger monopoly rents for foreign firms (Maskus, 2000; Smith, 2001).

# **3.5 The Clean Development Mechanism**

The Clean Development Mechanism of the Kyoto Protocol (CDM) allows industrialized countries that have accepted emissions reduction targets under the Kyoto Protocol (Annex 1 countries) to develop or finance projects that reduce greenhouse gas emissions in other countries in exchange for emission reduction credits. While its primary goal is to save abatement costs, the CDM also provides technical and financial support for the diffusion of climate technology in non-Annex 1 countries<sup>8</sup> . If the technology used in the project is not available in the host country, the project leads _de facto_ to a crossborder technology transfer.

Several empirical studies have been conducted in order to assess whether the CDM has encouraged North-South technology transfer (de Coninck et al., 2007; Haites et al., 2006; Seres, 2007; Dechezleprêtre et al., 2008; Schneider et al., 2008). They conclude that roughly 40% of CDM projects induce a technology transfer. These transfer mostly concern technical equipment and/or know-how,

> 8 Note that the CDM did not originally have an explicit technology transfer requirement in the Kyoto Protocol. This was included later in the 2001 Marrakech Agreement.

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