5. THE UN FRAMEWORK CONVENTION ON CLIMATE CHANGE
5.4 Obligation to transfer finance and technology
5.4.2 Transfer of technology
105 Nevertheless, article 4(4) of the Convention represents some victory for small island states. It provides that ‘developed country Parties and other developed Parties included in Annex II shall also assist the developing country Parties that are particularly vulnerable to the adverse effects of climate change in meeting costs of adaptation to those adverse effects.’ This serves as an additional protection for developing states that have peculiar circumstances that make them more vulnerable to climate change. While developing state parties are to receive funds to meet their obligations under article 4(1) of the Convention, vulnerable developing states will receive additional support towards the expenses incurred for climate change adaptation. The Convention is, however, quiet on the exact limits of such assistance.
106 developing states.232 The transfer of technology also received recognition in the UN Convention on the Law of the Sea233 and in the Convention on Biodiversity.234
If developing states must undertake climate change action, they must have access to climate technologies and at reasonable cost. The transfer of technology, therefore, became one of the central provisions of the UNFCCC.235 Initial proposals, championed by developing states, had requested for the transfer of technology on ‘concessional and preferential terms… and assured access’ to developing states.236 In line with the duty to be at the forefront of combating climate change, article 4 (5) provides:
The developed country Parties and other developed Parties included in Annex II shall take all practicable steps to promote, facilitate and finance, as appropriate, the transfer of, or access to, environmentally sound technologies and know-how to other Parties, particularly developing country Parties, to enable them to implement the provisions of the Convention.
This provision is to the effect that developed states are to supply developing state parties with the necessary technological resources for fulfilling their obligations within the Convention.
The transfer of technology has various aspects. This includes ‘direct purchases, licensing, franchising, foreign direct investment, joint ventures, sub-contracting, cooperative research arrangements, exchange of scientific and technical personnel, science and technology conferences/trade shows/exhibits, open literature, information exchange mechanisms, and official development assistance.’237 An effective transfer of technology will therefore include various key players, including governments and private stakeholders, to ascertain that the needed technology is transferred.
The transfer of technological resources assists developing states in pursuing their developmental objectives while protecting the climate system.238 It prevents a situation where efforts directed at preserving the climate system becomes an additional burden or an
232 Article 4(p) of the Declaration on the establishment of a New International Economic Order adopted by the General Assembly during its 6th special session, 9 April – 2 May 1974, A/RES/3201(S-VI) UN A/9559.
233 Articles 202 and 203 of the United Nations Convention on the Law of the Sea 10 December 1982 U.N. Doc.
No. A/CONF.62/122.
234 Article 16(1) of the United Nations Convention on Biological Diversity 5 June 1992 31 I.L.M. 818.
235 Statement of Ghana on behalf of G-77 Set of Informal Papers Provided by Delegations, Addendum 15, INC/FCCC, 4th Sess., Provisional Agenda Item 2 (1991) U.N. Doc. A/AC.237/Misc. I/Add.15 3.
236 Development and International Economic Cooperation: Environment, Draft Resolution submitted by the Chairman United Nations General Assembly A/44/862 Forty-fourth session Agenda item 82(f), reprinted in Center for International Environmental Law ‘Selected international legal materials on global warming and climate change’ 5(2) American University International Law Review (1990) 513, 627.
237 Friedrich Soltau Fairness in International Climate Change Law and Policy (2009) 197.
238 Alberts (n230 above) 65.
107 impediment to the industrial growth of these states. This provision gives a practical expression to the connection between, and the interrelatedness of, environmental protection and economic development. With the transfer of technology, developing states can adopt efficient use of energy and enhance a climate-friendly path to development.239 By offering finance and technology to developing states, state parties are able to foster collective climate change action and ensure economic growth for developing state parties.240
Financial and technology transfer is directly related to the provision of article 3 on equity and differentiated responsibilities. This approach considers the comparative difference in the capacity of state parties to tackle the climate change problem and places emphasis on those who have the capabilities to bear the cost. It redistributes rights and responsibilities in a way that guarantees that existing inequalities are not further entrenched. Instead, the transfer of finance and technology ensures that an additional burden is not placed on those who already struggle to meet basic developmental needs. Developing states should continue to focus their resources on meeting their overriding needs for socio-economic growth.241
It is necessary to note that developed states are, generally, opposed to the transfer of technology. Instead, they argue for technology cooperation.242 Developed states view technologies and the patents surrounding them as matters for the private sector and protected under intellectual property rights.243 It is, therefore, not surprising that there is a slight difference in the wording of article 4(3) dealing with the transfer of finance, and article 4(5) on the transfer of technology. While article 4(3) is direct and provides that ‘developed country parties…shall provide new and additional financial resources’, article 4(5) is couched in more general terms that make the obligation less mandatory. Article 4(5) notes that ‘developed country parties… shall take all practicable steps to promote, facilitate and finance, as appropriate, the transfer of, or access to, environmentally sound technologies’ (emphasis mine). In other words, the Convention does not require that an actual transfer must take place.
It is sufficient that efforts were made. This is worsened by the absence of any implementation mechanism for the provision of technology under the Convention.244
239 Zhou (n178 above) 2.
240 Verhoosel (n229 above).
241 Article 4 (7) and 3(2) of the UNFCCC.
242 Bodansky (n170 above) 530.
243 Soltau (n237 above) 197; Verhoosel (n229 above) 50.
244 Although the Convention creates a subsidiary body for scientific and technological advice, this body has no responsibility to ensure the transfer of technology to developing state parties.
108 The use of the term ‘as appropriate’, makes the transfer of technology a relative obligation.245 It has been noted that such framing gives room for individual states to decide how they want to implement a given provision.246 It leaves the provision opened to the discretion of the contracting party and creates legal uncertainty with respect to the extents or limits of such obligation.247 The fulfilment of the obligation to transfer technology is made dependent on the
‘appropriate’ situations in each state, which may include the state of its technological development, the socio-political situation within the state, national law, etc.248 Once any of these conditions is absent, it becomes easy for a developed state party to claim that the circumstances are not appropriate for the transfer of technology and thus avoid their obligation under the Convention.
In order to further entrench the transfer of finance and technology to developing states, article 4(7) of the Convention states:
The extent to which developing country Parties will effectively implement their commitments under the Convention will depend on the effective implementation by developed country Parties of their commitments under the Convention related to financial resources and transfer of technology and will take fully into account that economic and social development and poverty eradication are the first and overriding priorities of the developing country Parties.
This provision conditions the fulfilment by developing state parties of their obligation upon a successful transfer of finance and technology by developed state parties. In other words, the commitments of developing states under the Convention only arises when developed states fulfil their duty to assist developing states with necessary finance and technology. Without these resources, developing state parties are under no obligation to carry out their responsibilities under the Convention. Such obligations remain non-binding and the need for economic development will remain the issue of greatest significance to developing states. It is, therefore, important that developed states maintain a sense of global solidarity in the provision of finance and technology necessary for climate change action in the developing world as this would enhance climate change adaptation and mitigation globally.
245 Zhou (n178 above) 43.
246 Myron H. Nordquist, Satya Nandan & Shabtai Rosenne United Nations Convention on the Law of the Sea 1982: A Commentary vol. IV (1982) 63.
247 Verhoosel (n229 above) 59.
248 Zhou (n178 above) 43; ibid at 65.
109 Even in the absence of article 4(7), a developing state party would be entitled to suspend its commitments under the Convention in the absence of the transfer of finance and technology by developed state parties. Article 60(2) of the Vienna Convention on the Law of Treaties (Vienna Convention) states that ‘a material breach of a multilateral treaty by one or more of the parties entitles the other parties… to suspend the operation of the treaty in whole or in part or to terminate either in the relations between themselves and the defaulting state, or as between all parties.’249
What then is a material breach? Article 60(3) (b) of the Vienna Convention describes material breach as ‘the violation of a provision essential to the accomplishment of the object or purpose of the treaty.’250 Since developing state parties will be limited in their ability to undertake their responsibilities without financial and technological assistance, it follows that the failure to transfer finance and technology is a material breach of the terms of the UNFCCC. Developing state parties would therefore be entitled to suspend their obligations, relying on article 60(2) of the Vienna Convention.
Gaetan Verhoosel has, however, cautioned that the answer may not be so easy.251 This is because, as earlier seen, the obligations on finance and technology transfer are couched in words that make it difficult to ascertain the extents of these obligations and thus determine when there is a breach. How do you decide that there has been a breach of the provision for financial transfer when the Convention gives no minimum sum as the benchmark for financial transfer to developing states? Although the Convention uses words like ‘new and additional’
and ‘incremental’ with reference to the transfer of funds, the history of the Montreal Protocol shows that state parties rarely agree on the meaning of these terms.252
In conclusion, the provision for the transfer of finance and technology from developed to developing states serves as an expression of the principle of equity in the UNFCCC. It serves as a guarantee that the historical responsibility and present capabilities of signatory states play a role in the allocation of obligations under the treaty. However, the Convention fails to couch this obligation in concrete terms. The wordings of the Convention are intentionally vague and make it difficult to ascertain when there has been adequate compliance. It is, therefore,
249 Article 60(2) of the Vienna Convention on the Law of Treaties, May 23, 1969, 1155 United Nations Treaty Series 331, 346.
250 Article 60(3)(b) of the Vienna Convention.
251 Verhoosel (n230 above) 61.
252 Ibid.
110 unsurprising that there has been a significant disparity between the number of agreements and policies promising transfer of finance and technology and the actual volume of finance and technology that has been transferred.