Technology Transfer and the Clean Development Mechanism
The case of the Indian pulp and paper industry

Climate change is a major challenge to current and future societies and requires tremendous efforts in limiting greenhouse gas emissions by both industrialized nations and developing countries. Building on the United Nations Framework Convention on Climate Change (UNFCCC 1992) the Kyoto Protocol presents an important first step in the process of setting internationally-binding emission targets for industrialized countries for the period of 2008-12 (UNFCCC 1997). In order to allow countries to achieve these targets at low costs, three international market-based instruments were introduced: International Emission Trading between countries (IET), Joint Implementation (JI) and Clean Development Mechanism (CDM). While the former two mechanisms focus on emission reductions in industrialized countries, the CDM is the only mechanism aimed at reducing emissions in developing countries which is, due to their currently low technological standards and high expected growth rates, crucial for the success of any effort to mitigate global climate change.
In our research, we first review the literature on the technological gap between the Pulp and Paper Industries in Europe and India in order to get insights into the necessary technology transfer. Furthermore, we analyze the current CDM activities occurring in the Indian pulp and paper industry. To this end, we analyze all the Project Design Documents submitted to the UNFCCC and categorize the different projects. In addition to this project-level analysis, we looked at the relation between firm size and CDM activities by coupling the project-level data with industry data. In the whole analysis, we focused on the question whether the CDM already triggers international technology transfer. This is especially important today because there are currently many debates going on about the achievements of and future alternatives to the CDM. We contribute to the debate from a scientific perspective by looking in detail at one industry, namely pulp and paper, and the potential for technology transfer under the current CDM scheme. We chose the Indian pulp and paper industry as our research case for three reasons:  first, India’s fast growth as a rapidly developing country, second, India’s efforts to foster the CDM and, third, the pulp and paper industry’s large potential for cutting greenhouse gas emissions.

Contact Persons: