Advancing Affordable Access to Climate Technologies for Clean Transition and Sustainable Industrialization in Developing Countries

The clean transition toward net zero is often constrained by inadequate finance and access to affordable climate technologies, especially for developing countries. While the Group of 20 (G20) has been at the forefront of efforts to take steps to address the financial challenges, the generation and diffusion of climate technologies must also receive due attention. 

Climate technologies include solar photovoltaic modules, wind turbines, green hydrogen, lithium-ion batteries, carbon-capture-storage and utilization (CCSU), and more. Some of the policy tools that industrialized and newly industrialized countries exercised to build their productive capacities, such as local content requirements and flexible intellectual property rules, have since been sanctioned in multilateral trade fora. Nevertheless, these tools will be instrumental in sustainable industrialization for a clean transition and inclusive development, as even high-income countries have begun to use them.

In a new Think20 (T20) policy brief, Rachel Thrasher, Nagesh Kumar, Elizabeth Sidiopoulos, Kevin P. Gallagher and Faizel Ismail discuss key barriers to generating climate technologies and their affordable access by developing countries to advance a clean transition and sustainable industrialization. The authors make key policy recommendations for consideration of the G20 leaders under the Brazilian Presidency.

Policy Recommendations:

• G20 countries should actively build consensus toward structuring global intellectual property rules in a way that facilitates climate and development goals.
• At a national level, G20 countries should maximize existing flexibilities under the Agreement on Trade-Related Aspects of Intellectual Property (TRIPS) to increase access to climate-related technologies while developing these industries simultaneously at a multilateral level. 
• The G20 should support new data gathering about patent-protected climate-related technologies and draw from lessons learned during the COVID-19 pandemic to increase the supply of those technologies. 

In this context, examining how to foster the supply and diffusion of clean technologies for sustainable industrialization is important. Specifically, multilateral trade rules and free trade agreements may undermine the ability of developing countries to develop new technologies and access them. The G20 can advance global consensus-building and action toward fostering innovation and diffusion of climate technologies by expanding policy space for building productive capacities toward a clean transition.