“Promoting innovation and development of climate-friendly technologies in developing

countries: Case Study of Agricultural Adaptation”

H. Wright, September 2010, MSc Thesis

Centre for Environmental Policy, Imperial College, London

Aims and ObjectivesOriginal Rationale: Research the possibility for ‘innovation

prizes’ for climate technology and aim to scope out possible technologies that could benefit from innovation funding.

Broadened the scope to the full range of mechanisms that could be used promote technology transfer; such as public-private partnerships and barrier removal.

Focused on adaptation of agriculture to climate change; of particular importance to developing countries and the rural poor.

Establish a list of criteria that could be used to identify and select adaptation technologies for public funding, which could then potentially be used in a 'multi-criteria analysis' (MCA) of technologies.

Background

History of the ‘technology transfer’ debate in the UNFCCC; the need to develop local capacity for innovation. Cannady (2009) argues innovation is not a ‘one-way flow’.

Climate Technology Program and plans for 30 CICs (Climate Innovation Centres) to encourage R&D collaboration.

CGIAR (Consultative Group on International Agricultural Research) could arguably offer a useful example of effective international R&D collaboration (Correa, 2009).

Stakeholder Interviews

NGOs/Civil Society Policy-Makers, Scientists and Experts

Industry/ Companies

Developing Country NGOs/ Community Leaders

GVEP (Global Village Energy Partnership)

DFID AdapCC Manager, CafeDirect, UK

CEO, Green Enviro-Watch, Zambia

Tomorrow's Company (UK)

Author of GEO, UNEP (DEWA)

M-PESA Product Manager, Vodafone

Beyond Boundaries, Nepal

Head of Climate Change, Conservation International (US)

Dr Saleemal Huq (IIED) Director, Imperial Innovations, UK

Indian Youth Climate Network

IFOAM (International Federation of Organic Agriculture Movements)

Sir Gordon Conway (Imperial College)

Founder, Onergy, Sunderbans region of India

Practical Action, UK Crop Scientist, Australia

Chief Executive, IDE-UK (International Development Enterprises)

Dr Thomas Downing, Stockholm Environment Institute (Oxford)

The Innovation Chain

Grubb (2004) identifies three main categories of international mechanisms to promote innovation and development:-

• Funded international RD&D Programmes

• International public-private partnerships for incubation and acceleration

• International agreements on strategic deployment and barrier removal.

Climate Adaptation – E.g. use of mobile phone technologies

MPESA, mobile banking project with Vodafone, increased resilience because...“Kenya had massive drought last year... it enabled a support network” (Vodafone, Pers. Comm, 2010).

Increased access to microfinance.

Piloting ‘microinsurance’ in Kenya, allowing farmers in insure seeds and fertilisers.

Enables emergency response and access to weather forecasts.

Agricultural Adaptation

Seed varieties, irrigation, improved farming techniques (agricultural development).

Avoid ‘maladaptation’ e.g. over-irrigation

Participatory process; “ownership” is key (CafeDirect, Pers. Comm, 2010).

Conservation farming techniques have synergies with mitigation; SOC.

Organic farming? Peak oil and peak phosphate in the next 50 years.

Food security and equity issues: access to food

Strategies in Agriculture:

Positive for Adaptation (+) Negative for Adaptation (-)

Positive for Mitigation (+)

-Mitigation that sequesters carbon and prepares for drought (IPCC, 2007), e.g. low tillage.

-Mitigation e.g. multi-purpose trees, or mangrove planting, that

increase resilience to flooding and provide income.-Adaptation that returns residue to fields to improve “water-holding capacity that also sequesters carbon” (IPCC, 2007) e.g. composting, biogas digesters. -Adaptation with irrigation or fertilisation that increases biomass cover may increase carbon-sequestration.-Water efficiency or harvesting; also reduces impact of flooding/drought.

-Small-scale energy generation from local biomass/solar; frees

people from dependence on kerosine fuel/grid electricity which

“exhibit volatile prices and can be cut off by extreme weather

events” (IIED, 2009).

-Mitigation in usage of biomass or biofuel, or hydro power, that is sensitive to climate extremes (IPCC, 2007).

-Mitigation in biofuel production (or

biochar) that may compete with food

production (or displace indigenous

populations).-Mitigation in large-scale agroforestry to generate C-credits, that may compete with food production (or displace indigenous populations).-Use of alternative buildings materials instead of cement that are not resistant to flooding.

Negative for Mitigation (-)

-Adaptation that increases use of N-fertiliser but increases N20 emissions (IPCC, 2007).

-Adaptation with increased animal husbandry may increase

emissions (except where dung used for inorganic farming).-Building of energy-intensive cement infrastructure to protect against flooding.

-Increased dependence on fossil-fuel intensive inputs that are unsustainable over the long term/vulnerable to price fluctuations.

Other potential negative externalities (-)

-GM crops increase yields but monoculture may increase use of herbicide, promote ‘rogue’ weeds, and kill soil bacteria (Guardian 2004).-Agroforestry/biofuel plantation that destroys a wildlife sanctuary (Pers. Comm., TC)

-Irrigation that is poorly managed leading to falling water tables or salinisation (DFID, 2004).

Potential Conflicts and Synergies of Adaptation and Mitigation:

Case Study: Treadle vs Diesel PumpsAdvantages of treadle pumps: - Possible to claim carbon credits (displacing diesel); - Not dependent on fluctuating fuel prices; - Less chance of over-irrigation of groundwater;Disadvantages of treadle pumps: - Requires 4 hours of manual labour per day (usually women), so farmer cannot apply their labour elsewhere; - Goes to a depth of 7-9 metres compared to 20+ metres for diesel pump (groundwater may be below this depth); - Farmers can rent the diesel motorised pump to neighbours.

•IDE-UK explained this is why “people are jumping to diesel” (Pers. Comm, 2010).•The Chief Executive of IDE-UK believed an innovation prize for a low-cost SOLAR pump would be an excellent idea; “put a rocket up some of our engineers” (Pers. Comm, 2010).

Prioritisation of Criteria by Stakeholders

Order of Prioritisation for Criteria:-

Social impact, i.e. pro-poor; Environmental impact (general sustainability); General applicability of the technology (scalability and replicability);

Number of people or countries affected by the climate impact; Financial self-sustainability and implementation strategy/business plan;

Economic efficiency; or cost-effectiveness;Likelihood of climate impact; Economic development (livelihood) impact; i.e. job creation;Level of capacity/experience of the applicant;

Secondary benefits other than climate change adaptation; 'no regret' measures;

Genuine ‘innovative’ element/degree of innovation; Carbon neutrality;

“From the following list; which priorities/criteria do you think should guide the identification of technologies for adaptation to target with funding?”

Stakeholder comments on potential conflicts of adaptation and mitigation

“...it is difficult to finance adaptation projects with the credits for mitigation” (GVEP, Pers. Comm, 2010).

“For poor communities adaptation is a greater priority... Making everything carbon-neutral is unjustifiable” (Practical Action, Pers. Comm)

“Where adaptation is for poor vulnerable communities the emissions are so small they are not worth worrying about” (Saleemal Huq, Pers. Comm,’10).

“...if you’re talking about a developing country that is really vulnerable and adaptation involves some emissions – it’s very hypocritical to ask for no emissions” (Conservation International, Pers. Comm)

“If there is a synergy between adaptation/mitigation we should exploit it but there's an equity issue” (O’Sullivan).

“In Africa... you need to help people adapt, whereas in China they are going up that growth curve... so you need a different focus... it depends which geographical area you are looking at” (Bahns, Pers. Comm, ‘10)

R&D and Global SubsidiesGlobal R&D expenditure for renewable energy amounted to $1,755m in 2008, while $1,658m was spent on R&D related to fossil fuels (of which CCS made up $218m) (IEA, 2010)

Fossil fuel consumption subsidies worldwide were $342Bn USD in 2007 and $557Bn in 2008... In addition, subsidies provided to producers were in the order of $100Bn per year; total fossil fuel subsidies were almost $700Bn per year, or 1% of global GDP (IEA, 2010).

That far exceeds the level of subsidies that go towards renewable energy internationally, which are about $27Bn per year (GSI, 2010).

Agricultural subsidies in OECD countries were about $400Bn in 2008 (IEA, 2010)... this subsidy amounts to 1.3% of GDP in OECD countries which is roughly six times the value of all official development aid (WRI, 2006).

“Treadle pumps cost $100 in Africa but $25 in India... due to huge tariffs on steel imports...it is a historic policy issue” (IDE, Pers Comm).

Fossil fuel subsidies compared

AMCs and Innovation Prizes

Stakeholder response to AMCs: “right up our street... a private sector model that would fit us well” (IDE, Pers. Comm, 2010) ... But “requires capacity already there at market-defining scale” (Downing, Pers. Comm, 2010)

• 63% of respondents felt an ‘innovation prize’ would “definitely” or “probably” be an effective way to support innovation in climate-friendly technology. Yet all 3 industry respondents felt an innovation prize was “probably not” an effective way to support innovation.

Almost all respondents agreed the private sector needs to play a greater role in developing climate-friendly technology; but many respondents recognised the crucial need for government to push the private sector with “regulations and subsidies” (IDE, Pers. Comm ‘10)

• “it is not so much about inventing them but deploying them at scale – scaling up existing technologies” (Pers. Comm, 2010).

Additional issues – Adaptation financeLoans for Adaptation:

“the farmer gets inputs on loan – then the rainy season causes floods and crops to get submerged; there is nothing the farmer can create – how does he pay back the loan?” (Musumali, Pers. Comm, 2010).

“outrageous... there is no justification for even concessional loans for countries that are extremely vulnerable” (NGO, Pers. Comm, 2010)

“there is a difference between micro-finance (recycling money to expand the activity) compared to loans where the activity is expected to generate money to pay back – which by definition takes away from the core activity” (Pers. Comm, 2010).

Additionality to ODA (overseas development assistance):

“historical responsibility is not being fulfilled” (NGO, Pers. Comm, 2010).

“difficulty about where the line is because there's a gradation from development to adaptation” (Conway, Pers. Comm, 2010)

Recommendations and Wider Implications

• Public-private partnerships (PPPs) could be utilised for incubation and commercialisation of technology, including with AMCs (Advanced Market Commitments) such as prizes. PPPs could be introduced where there are mutual interests, such as building resilience of companies’ supply chains.

• DFID may need to further consider the potential conflicts of adaptation and mitigation in some areas, where adaptation for the poorest should be prioritised, as well as enabling potential synergies.

• There is urgent need for progress in the WTO Doha Development Round to include consideration of climate issues and the potential effect of agricultural subsidies and tariff imports upon developing countries adaptive capacities.

• A developing-country orientated 'Climate Change Technology Innovation Strategy' should be introduced, building upon pilot CICs, including addressing IP rights. CGIAR could provide a useful model for international collaboration on R&D for climate-friendly technology.