Politicians achieved little in Bali last month. The UN conference on climate change gathered nearly 190 countries for two weeks of wrangling and haranguing, resulting in little more than a decision to come up with a plan to replace the Kyoto Protocol in two years.
Still, there were some interesting developments.
For one thing, China and India emerged as loud voices in the debate, leading the call for better access to clean technologies to help power their growth. The two countries are part of G77, a group of developing nations that pushed for new guidelines on transferring relevant technology from rich to poor states.
The proposal includes increasing protection for intellectual property rights so that companies can participate in the transfer mechanism knowing that they can profit from the transaction.
This only makes sense. China and India are already a strong draw for cleantech investors and companies. They offer cheap labor and resources, allowing companies to manufacture cleantech components at low cost and on a large scale. This in turn helps make these technologies economically viable to deploy.
But cost advantages are always temporary. Cheap labor cannot exist forever. Luckily for China and India, they have other charms. They are already among the world’s top carbon emitters. They need clean technologies – energy-efficient buildings, renewable energy sources, water filtration – more than anyone else on the planet. China’s leaders in smog-covered Beijing know the consequences of rampant economic growth better than most.
Bali has shone the spotlight on technology transfer. With any luck, it will help the companies on the cutting-edge of cleantech – almost invariably located in the rich world; North America, Europe, Japan and Singapore – realize the massive opportunity that the emerging giants represent.
Letting technology accrete here, where saving the environment is a necessity, will allow local firms to build their own knowledge base – while foreigners reap the financial rewards.
Eventually, Chinese or Indian companies will know best how to solve their own environmental issues. Today, Chinese cleantech companies are low-cost manufacturers of solar modules and wind turbines. In the future, they could build energy-efficient homes around the world and develop ways to power cars and buildings with renewable sources.
Capital and technology, with minimal interference from politicians, could remake a world that badly needs help.