European Union has exported €400 million through the Kyoto Protocol

The European Union private sector is exporting technology worth almost 400 million euros to developing countries as a consequence of the Kyoto Protocol. The result was presented today during the final conference of the European Commission TETRIS project on technology transfer and investment risks in international emissions trading.

The number clearly indicates that there are economic benefits associated with participation in the Clean Development Mechanism (CDM). The CDM is the project-based emissions trading tool that allows for trading of greenhouse gas emissions with developing countries which are not mandated to reducing their emissions.

ECN and Natsource have examined the projects that had been approved by the UN-body that governs the CDM, on January 1st, 2006. At that time, 63 projects had been registered, implementing technologies such as hydropower, wind energy, reduction of non-CO2 greenhouse gases, and bioenergy. The projects were implemented in 20 countries, among which India, China and Brazil featured prominently.

Value of investment per technology-exporting Annex-B country used for CDM projects in million euros.

Technology transfer of hardware equipment, the projects’ most robust result, was seen especially in wind energy, the non-CO2 greenhouse gas projects and in some cases in hydropower. The bioenergy projects used local technology. In addition to hardware technology transfer, almost half of the 63 projects also claimed to transfer technology through knowledge transfer and capacity building.

The largest investment value of hardware technology transfer was in hydropower and wind energy. The largest exporting countries of those technologies were Spain (235 million euros), France (92 million euros) and Germany (35 million euros). In total, 470 million euros was exported, of which 390 million euros from the EU. The other countries were Japan and Switzerland. The United States, despite not having ratified the Kyoto Protocol, benefits from it through export of equipment worth 50 million euros.

Currently, the number of projects has risen with almost a factor 8 to 450 registered projects, featuring a wider group of technologies and host countries. Whether the value of technologies transferred to developing countries has risen accordingly, is uncertain and requires further investigation.