{"id":1330,"date":"2024-07-04T17:39:44","date_gmt":"2024-07-04T10:39:44","guid":{"rendered":"https:\/\/mcsolutions.vn\/?p=1330"},"modified":"2024-07-04T17:56:27","modified_gmt":"2024-07-04T10:56:27","slug":"trade-and-fdi-channels-of-low-carbon-technology-transfer","status":"publish","type":"post","link":"https:\/\/mcsolutions.vn\/ja\/trade-and-fdi-channels-of-low-carbon-technology-transfer\/","title":{"rendered":"Trade And FDI: Channels Of Low-Carbon Technology Transfer"},"content":{"rendered":"<div data-elementor-type=\"wp-post\" data-elementor-id=\"1330\" class=\"elementor elementor-1330\">\n\t\t\t\t<div class=\"elementor-element elementor-element-fa5d2f3 e-flex e-con-boxed e-con e-parent\" data-id=\"fa5d2f3\" data-element_type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-4d24708 elementor-widget elementor-widget-text-editor\" data-id=\"4d24708\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<style>\/*! elementor - v3.21.0 - 26-05-2024 *\/\n.elementor-widget-text-editor.elementor-drop-cap-view-stacked .elementor-drop-cap{background-color:#69727d;color:#fff}.elementor-widget-text-editor.elementor-drop-cap-view-framed .elementor-drop-cap{color:#69727d;border:3px solid;background-color:transparent}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap{margin-top:8px}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap-letter{width:1em;height:1em}.elementor-widget-text-editor .elementor-drop-cap{float:left;text-align:center;line-height:1;font-size:50px}.elementor-widget-text-editor .elementor-drop-cap-letter{display:inline-block}<\/style>\t\t\t\t<p><span style=\"font-weight: 400\">International trade and foreign direct investment (FDI) are two of the most important channels for international diffusion and technology transfer. Let&#8217;s learn more deeply with MC Solutions in the article below.<\/span><\/p><h2><span style=\"color: #339966\"><b>Importance of Trade and FDI for Technology Transfer<\/b><\/span><\/h2><p><span style=\"font-weight: 400\">International trade and foreign direct investment (FDI) are crucial channels for spreading technology around the world.\u00a0<\/span><\/p><p><span style=\"font-weight: 400\">Companies involved in international trade tend to be larger, more productive, and more technologically advanced than those operating solely domestically.<\/span><\/p><p><span style=\"font-weight: 400\">Whereas trade offers the ability to quickly move technology embedded within physical products, FDI offers the potential to transfer physical products and the knowledge, skills, and processes to produce or operate them. \u2018<\/span><\/p><h2><span style=\"color: #339966\"><b>Channel for Technology Transfer<\/b><\/span><\/h2><p><span style=\"font-weight: 400\">Technology can be transferred through multiple transmission channels that can be categorized into seven types:\u00a0<\/span><\/p><ol><li><span style=\"font-weight: 400\"> Importation of intermediate and capital goods through international trade\u00a0<\/span><\/li><li><span style=\"font-weight: 400\"> Movement of capital and knowledge through inward and outward FDI, including joint ventures\u00a0<\/span><\/li><li><span style=\"font-weight: 400\"> Movement of people through migration or through business, travel, and educational purposes\u00a0<\/span><\/li><li><span style=\"font-weight: 400\"> Licensing for the use of foreign technologies (for example, patents, copyrights)\u00a0<\/span><\/li><li><span style=\"font-weight: 400\"> Collaboration on international research\u00a0<\/span><\/li><li><span style=\"font-weight: 400\"> Integration into GVCs, benefitting from knowledge and technology transfer between buyers and suppliers\u00a0<\/span><\/li><li><span style=\"font-weight: 400\"> Diffusion of codified and disembodied knowledge through the Internet and other media\u00a0<\/span><\/li><\/ol><p><span style=\"font-weight: 400\">This article focuses on the first two such channels: low-carbon technology transfer through international trade and through FDI.\u00a0<\/span><\/p><h2><b><span style=\"color: #339966\">Trade And FDI as Channels Of Low-Carbon Technology Transfer\u00a0<\/span><\/b><\/h2><p><span style=\"font-weight: 400\">International trade and FDI can introduce cleaner, more energy-efficient products and services. They can also foster environmental practices among domestic firms and, in some cases, even lead to technology leapfrogging.\u00a0<\/span><\/p><p><span style=\"font-weight: 400\">However, they can also introduce polluting\u00a0 technologies. The debate on whether trade creates &#8220;pollution havens&#8221;\u00a0 with relaxed environmental standards remains open.<\/span><\/p><h3><b>1. Trade as a Channel of LCT Transfer<\/b><\/h3><p><span style=\"font-weight: 400\">Trade offers a fast track for transferring technology. Unlike other methods, trade physically moves products that already have technology built-in. Even the biggest cargo can be shipped around the world in just a few weeks.\u00a0<\/span><\/p><p><span style=\"font-weight: 400\">This allows developing countries (often referred to as the &#8220;South&#8221;) to benefit from the vast pool of knowledge accumulated through research and development (R&amp;D) in more industrialized countries (often referred to as the &#8220;North&#8221;).\u00a0<\/span><\/p><p><span style=\"font-weight: 400\">By participating in global markets, developing countries can gain access to a wider range of intermediate goods and capital equipment that would be too expensive or impossible to produce domestically.<\/span><\/p><p><span style=\"font-weight: 400\">Importing low-carbon capital goods (machinery) has traditionally been considered the most robust channel of technology transfer via trade because it increases productivity and the likelihood of generating positive environmental and innovative externalities.\u00a0<\/span><\/p><p><span style=\"font-weight: 400\">Further analyses suggest that importing intermediate goods can be equally impactful. In light of the urgent need to scale up deployment of LCTs across all countries, including those with limited technological capacity, trade offers the quickest mechanism for delivering and deploying LCTs.<\/span><\/p><p><span style=\"font-weight: 400\">Global trade of these 107\u00a0<\/span><span style=\"letter-spacing: 0.3px\">low-carbon technologie<\/span><span style=\"font-weight: 400\">s has plateaued since 2011, a potentially worrying sign for climate change mitigation. Exports have risen nearly 20-fold\u2014from US$43.6 billion in 1990 to an estimated US$809.9 billion in 2017 (image below).\u00a0<\/span><\/p><p><img decoding=\"async\" src=\"https:\/\/mcsolutions.vn\/wp-content\/uploads\/2024\/07\/Total-value-of-Low-Carbon-Technology-export-1990-2017.png\" alt=\"Total value of Low-Carbon Technology export\" \/><\/p><p><span style=\"font-weight: 400\">Despite strong year-on-year export growth in the early 1990s and 2000s,\u00a0<\/span><span style=\"letter-spacing: 0.3px\">low-carbon technology<\/span><span style=\"font-weight: 400\">\u00a0trade has actually failed to grow in value terms in three of the past six years. Bilateral trade volumes have fluctuated by product and country pair, with no clear pattern of continued decline or growth.\u00a0<\/span><\/p><p><span style=\"font-weight: 400\">If one uses installed capacity of RE as an indicator of\u00a0<\/span><span style=\"letter-spacing: 0.3px\">low-carbon technology<\/span><span style=\"font-weight: 400\">\u00a0trade volumes, the steady rise in installed capacity would suggest more production, and potentially trade, of these products albeit at lower prices. This increase, however, would include only a subset of the 107 LCT products.<\/span><\/p><p><span style=\"font-weight: 400\"><img decoding=\"async\" src=\"https:\/\/mcsolutions.vn\/wp-content\/uploads\/2024\/07\/Low-Carbon-Technology-export-growth-versus-growth-of-all-export1990-2016.png\" alt=\"Low-Carbon Technology export growth versus growth of all export,1990-2016\" \/><br \/><\/span><\/p><h3><b>2. FDI as a Channel Of LCT Transfer<\/b><\/h3><p><span style=\"font-weight: 400\">Technology transfers through FDI are often considered more knowledge intensive than those through trade because of the longer-term and deeper engagement in the receiving country.\u00a0<\/span><\/p><p><span style=\"font-weight: 400\">Increasingly, research finds that FDI-receiving countries benefit strongly from direct and indirect knowledge spillovers between foreign and domestic firms.\u00a0<\/span><\/p><p><span style=\"font-weight: 400\">Multinational firms that invest around the world tend to share certain characteristics: they are technologically advanced and operate at higher international standards, including using management systems that monitor and actively seek to reduce environmental impacts.\u00a0<\/span><\/p><p><span style=\"font-weight: 400\">In the case of high-tech sectors\u2014where many\u00a0<\/span><span style=\"letter-spacing: 0.3px\">low-carbon technologie<\/span><span style=\"font-weight: 400\">s would be considered\u2014FDI spillovers are found to have even more impact.<\/span><\/p><p><img decoding=\"async\" src=\"https:\/\/mcsolutions.vn\/wp-content\/uploads\/2024\/07\/FDI-as-a-Channel-Of-Low-Carbon-Technology-Transfer.png\" alt=\"FDI as a Channel Of Low-Carbon Technology Transfer\" \/><\/p><p><span style=\"font-weight: 400\">Furthermore, FDI is a crucial source of financing for the deployment of LCTs. FDI into renewable energy (RE) is most often invested to develop downstream power production facilities and other infrastructure assets, rather than into the manufacturing processes that could lead to more knowledge and skills spillovers in the domestic economy.\u00a0<\/span><\/p><p><span style=\"font-weight: 400\">FDI isn&#8217;t without its drawbacks. It can hinder the growth of domestic companies, force less competitive businesses to close, and allow foreign firms to dominate certain industries in developing economies by controlling prices (monopoly rents).<\/span><\/p><p><span style=\"font-weight: 400\">Foreign direct investment (FDI) is crucial for developing countries aiming to transfer low-carbon technology to their domestic industries. This fosters production of cleaner products and paves the way for sustainable economic growth.\u00a0<\/span><\/p><p><span style=\"font-weight: 400\">However, measuring the exact impact of LCT-focused FDI is challenging.\u00a0 While tracking renewable energy (RE) investments offers the most straightforward approach, data collection remains limited, especially in developing countries.\u00a0<\/span><\/p><p><span style=\"font-weight: 400\">Here, the key players driving RE investment are often not national governments, but rather local authorities, community initiatives, and large corporations.<\/span><\/p><h2><span style=\"color: #339966\"><b>Conclusion<\/b><\/span><\/h2><p><span style=\"font-weight: 400\">\u201cThere is an urgent need to facilitate the transfer of technology to developing countries,\u201d said Ceyla Pazarbasioglu, Vice President for Equitable Growth, Finance and Institutions at the World Bank Group.\u00a0<\/span><\/p><p><span style=\"font-weight: 400\">\u201cThis requires getting energy prices right, building human and institutional capital, supporting LCT investment through de-risking mechanisms, and introducing policies that support the uptake of LCT. But it can be done. It is possible to limit global warming with existing LCT\u2014provided it is deployed on a massive scale to developing countries.\u201d<\/span><\/p><p><span style=\"font-weight: 400\">International institutions and donor countries need to explore all possible strategies for combating climate change.\u00a0<\/span><span style=\"letter-spacing: 0.3px\">Low-carbon technology<\/span><span style=\"font-weight: 400\">\u00a0transfer is an underutilized approach that could help developing countries get on a path to a low-carbon future.<\/span><\/p><p><span style=\"font-weight: 400\">See more: <\/span><a href=\"https:\/\/mcsolutions.vn\/ja\/how-global-companies-are-leading-on-climate-change-solutions\/\"><span style=\"font-weight: 400\">How Global Companies Are Leading on Climate Change Solutions<\/span><\/a><\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>","protected":false},"excerpt":{"rendered":"<p>International trade and foreign direct investment (FDI) are two of the most important channels for international diffusion and technology transfer. Let&#8217;s learn more deeply with MC Solutions in the article below. Importance of Trade and FDI for Technology Transfer International trade and foreign direct investment (FDI) are crucial channels for spreading technology around the world.\u00a0 [&hellip;]<\/p>","protected":false},"author":3,"featured_media":1331,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[37],"tags":[51,20,33],"class_list":["post-1330","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-climatetech","tag-climatechange","tag-climatetech","tag-sustainable-strategy"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/mcsolutions.vn\/ja\/wp-json\/wp\/v2\/posts\/1330","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mcsolutions.vn\/ja\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mcsolutions.vn\/ja\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mcsolutions.vn\/ja\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/mcsolutions.vn\/ja\/wp-json\/wp\/v2\/comments?post=1330"}],"version-history":[{"count":26,"href":"https:\/\/mcsolutions.vn\/ja\/wp-json\/wp\/v2\/posts\/1330\/revisions"}],"predecessor-version":[{"id":1413,"href":"https:\/\/mcsolutions.vn\/ja\/wp-json\/wp\/v2\/posts\/1330\/revisions\/1413"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mcsolutions.vn\/ja\/wp-json\/wp\/v2\/media\/1331"}],"wp:attachment":[{"href":"https:\/\/mcsolutions.vn\/ja\/wp-json\/wp\/v2\/media?parent=1330"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mcsolutions.vn\/ja\/wp-json\/wp\/v2\/categories?post=1330"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mcsolutions.vn\/ja\/wp-json\/wp\/v2\/tags?post=1330"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}