Comments of Japanese Government to "The framework for capacity-building in NON-ANNEX I parties"

General Comments
	Japan has been implementing actively technology transfer addressing climate change through economic cooperation, in particular through official development assistance (ODA) and other official financing schemes. Furthermore, the private sector in Japan is also moving forward in its transfer of technologies through its business operations, focused on industry- and energy-related technologies such as energy conservation and fuel substitution technologies. The government is also actively promoting technology transfer by the private sector through its support and guidance measures.
	Japan intends to continue this promotion of technology transfer and hopes to use such experiences to make active contributions to the framework for the promotion of technology transfer.
	Japan's experience has proven that successful technology transfer, while being a complicated process, first begins with the cooperation of multiple stakeholders in both the developed and the developing country and requires efforts over an extended period for the technology transfer to take root. As pointed out in the consultative process, there is no "one fit for all measure" nor "magic bullet" for promoting technology transfer.
	Technology transfer as provided for under the United Nations Framework Convention on Climate Change (UNFCCC) is the subject discussed so much. It is necessary to move quickly to decide upon a possible framework that enables effective and meaningful actions. On the one hand, in view of the complex nature of technology transfer, we should not make a quick-fix framework just to meet a deadline. We should instead adopt a step-by-step approach, making what we can do a reality, then reevaluating the situation and improving the setup over time.
	With regard to financial source and financing mechanisms, Japan believes that it is most effective to, upon working out the bilateral and multilateral efforts which have been made since the entry into force of the Convention, undertake an evaluation of the situation, and improve any points to be improved. Through the consultative process since COP4, there have emerged specific areas for consideration, such as technology needs assessments, technological information, enabling environments, and capacity building. In addition to the continued implementation of already-existing support efforts, it is necessary to examine areas of improvement and then go on to take actions which are considered feasible.
Basic Position
(1)	Evaluation of activities to date (Chairman's notes, three regional workshops, IPCC special report ) The three regional workshops have contributed greatly to the consultative process. In addition, we believe that the IPCC report included appropriately-balanced analyses of a broad range of items. The results of these activities could, along with the Chair's notes, form the basis for analyses to be undertaken in the future.
(2)	Scope of targeted technology transfer The target in advancing technology transfer should be broad in scope for the following reasons:
	(a)	No clearly-defined criteria have been established for determining whether a given instance of technology transfer is one as defined in Article 4.5.
	(b)	Technology transfer is conducted under a broad variety of stakeholders and the degree to which each instance of technology transfer is connected to climate change may also vary. Thus it is not feasible to determine whether any given instance of technology transfer is one as defined in Article 4.5.
	(c)	Once the kinds of targeted technology transfer are defined too narrowly, cases of useful technology transfer being held back or prevented can be foreseen.
	(d)	Both mitigation technologies and adaptation technologies are important to be transferred. It is vital to keep the balance between those two in the light of countries/region's needs.
	(e)	There are many kinds of mitigation technology and adaptation technology which are beneficial not only for climate change but also for economic development in their ability to boost energy efficiency, strengthen the robustness of the agriculture and forestry sectors, and so on. There should be broad-based promotion of technology transfer of this sort.
(3)	Basic points when considering possible elements of framework for the advancement of technology transfer
	(a)	Bottom-up, country-driven approach Technology transfer needs is to be identified and formulated, adopting a bottom-up approach, by those who work in technology transfer in the field and know much about their problems and needs of each country/region/locality.
	(b)	Needs assessment It is necessary to conduct an assessment of each country/region's circumstances and its needs, and to follow these up by adopting appropriate approaches.
	(c)	Insofar as there exist no means of quantitatively measuring the degree to which technology transfer has been achieved, it is both impossible and meaningless to evaluate countries' efforts in one set manner.
	(d)	In consideration of the fact that measures to promote technology transfer are already underway in developed countries and that the content and setup of these approaches are quite varied, it is necessary to incorporate flexibility into the framework so that a framework would not constrain the efforts currently being undertaken.
	(e)	It is not uncommon to take a long time before efforts to promote technology transfer actually bear fruit. Furthermore, for those efforts to take root, it is crucial for the recipient country to undertake sincere self-help efforts.
	(f)	Technology transfer is a complex process involving a large number of stakeholders and thus it is necessary to allow a large number of stakeholders to participate in the process.
	(g)	The private sector has a significant amount of resources relevant to technology transfer, including both technological know-how and human resources. Furthermore, in light of the fact that regeneration and dissemination within the country is possible via the process of commercialization and industrialization, the partnership of the private sectors in developed and developing countries is important in technology transfer. For this reason, the framework should bring about incentives to promote technology transfer by the private sector and not diminish the motivation of the private sector to participate.
	(h)	The role of the government in the promotion of technology transfer by the private sector is important. Consideration could be given to various things such as the provision of information, the use of publicly-funded export credits and the like, harmonization of the term limits of patents, and the like. However these should be effected taking into consideration the conditions particular to each country.
	(i)	Technology, as similar to capacity building, is not finalized only in a design plan. Wide- ranging related technologies and know-how in adjacent areas, institutional arrangement and human resource for quality control, supply of parts and materials, basic social infrastructure such as electric power supply and telecommunications supporting technology, wide ranging qualified human resources from the top of design to the down of production line and construction site are essential. Enhancing a piece of those resources do not give fruit of technology transfer, development of all those resources in a balanced manner. Efforts of both developed and developing countries should be allocated for this purpose, taking into account necessary environment and conditions thoroughly.
	(j)	Know-how and techniques at manufacturing sites often serve as highly cost efficient climate change mitigation measures, rather than cutting-edge technology, which brings with it associated costs for related technology and social infrastructures. Appropriate balance should be struck.
	(k)	Transferring cutting-edge technologies often faces difficulties in maintenance and dissemination, thus transferring appropriate technology that fit the situation of the transferred site is important.
	(l)	Bilateral assistance rather easily fits the country driven needs. In addition, donor country takes advantage of well-matching recipient needs and donor supply, and of securing the resources for assistance. For this reason, bilateral assistance should play an important role. Coordination between bilateral assistance is inevitable to keep the balance of distribution of assistance and achieve efficient implementation.
Comments on proposed elements of framework
(1)	Technology assessment and needs assessment
	-	Needs assessment is a fundamental element. Needs should be surveyed, investigated and prioritized to fit each countries' circumstances.
	-	To promote effective and substantial technology transfer, needs for technology transfer should be placed in the national development plans covering economic development, sustainable development and technology development in a consistent manner. For these purposes, required resources for receiving technology transfer should be allocated.
	-	Prioritization of needs assessment should take into account various factors including the magnitude of effects and cost effectiveness in climate change abatement, priority in development agenda, condition and circumstances in recipient partner, and capacities for receiving assistance.
	-	Needs are to be assessed by the developing country itself on a country-driven basis in principle. It is important that the developed country assists the developing country to assess its needs, where necessary and appropriate.
	-	Assistance could be provided through either bilateral or multilateral channels. Coordination among those channels is vital to avoid duplication and to take into account the balance of geographical distribution. It is more desirable to keep coherence of methodology, scope and items to some extent in the assessment.
(2)	Technology information
	-	Information on ESTs, such as overview, environmental performance and adaptability of EST in various circumstances in developing countries should be developed with enhanced accessibility and quality.
	-	On the other hand, technologies have been continuously developed and evolved, and commercialization and diversification to fit the needs have been carried out in the private sector. It might be useful to cover the new information, however, it is difficult to make a complete set of information covering whole range of technologies. In addition, heavy burden to private sectors may disturb information collection. It is necessary to keep the balance between coverage, completeness and practicality.
	-	Environment performance evaluation for each EST is important. To achieve this, it is essential to establish objectivity of the evaluation through full international consideration and coordination on methodology and its application.
	-	Information on good practices of past and on-going technology transfer and assistance projects for technology transfer is also essential. It is significant that such information is collected and accumulated with high accessibility through some mechanism. Japan has carried out a large number of technology transfer project at the governmental level and is ready to provide information on good practices
	-	However, several existing institutions and organizations have already collected and provided such information to some extent. It is important to use such available information sources to a maximum, and then to consider what information is needed ,and see whether and what new mechanism of information collection is necessary.
	-	For considering development and provision of information, current activities taken by the secretariat of the Convention as well as CTI should be taken into account.
	-	Japan would like to seek for clarification on the idea of "one stop shop" stated in the Chairman's note
(3)	Enabling environment
	-	Enabling environment which targets to remove various barriers in the recipient country is quite essential to promote technology transfer substantially. As summarized in the IPCC special report, barriers in enabling environment relates to various areas including governmental decisions such as legal institution, regulations and codes, policy and planning, subsidies, taxation, etc. and social factors such as investment risk, trade and commercial practices, intellectual property rights and its practice, etc.
	-	For enabling environment, sequence of efforts consisting of identification of barriers, analysis of identified barriers, considering options for improvement and implementation of selected options should be addressed, and primarily the recipient country's government should play an independent and key role to address them.
(4)	Capacity building for technology transfer
	-	Framework for capacity building should be basically considered by the group of capacity building. From the point of view in technology transfer, only necessary information focusing on actual needs and on specific aspects which may require coordination with technology transfer should be provided to capacity building consultative process.
	-	According to the result from consultative process for technology transfer, the following two areas should have priorities;
		●	Capacity building should be promoted for activities related to possible elements of framework on needs assessment, technology information and enabling environment.
		●	The Kyoto mechanisms are expected to have a potential to promote technology transfer especially in private sectors. Capacity building for formulating projects of the Kyoto mechanisms in developing countries and EITs should be encouraged.
(5)	Mechanism for promoting technology transfer
	-	It is no doubt that dialogues and assistances taken in existing bilateral and multilateral mechanisms have been played and will play an important role for technology transfer basically. In addition to this, it should be taken into account the large potential for the Kyoto mechanisms of which details will be determined.
	-	Regarding the role of the GEF, as stated in the Japanese submission of 1999, new guidance to the GEF was given at the COP4 and the guidance should be evaluate in the GEF reviews to be held every four years, therefore it is too early to discuss on the role of the GEF for technology transfer.
	-	It is useful to consider the idea that the Party may report the activities related to technology transfer of Article 4.5 through its national communication, and, based on this, information is compiled to be utilized for promoting technology transfer after the in-depth expert review. In this case, such information should be analyzed in an objective and scientific manner, and actual barriers and their solutions should be identified in a concrete, fair and practical manner. It should be stressed that there is no quantitative and objective methodologies for measurement of effects of activities related to technology transfer. The role of such framework should be to encourage the Parties by identifying good practices rather than to try in vain quantify effects and achievements of their activities. It is important to promote this in cooperation with the GEF, OECD/DAC as well as OECD/CTI.

(end)