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Simple steps, effective actions: Understanding technology needs assessment

A UNDP/GEF Handbook on methodologies for technology needs assessments

ICCEPT for the UNDP-GEF 1st Draft, 1 August 2002

Please send your comments to Yamil Bonduki, UNDP-GEF National Communications Support Unit at [email protected] no later than 30 August 2002


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Simple steps effective actions: Understanding technology needs assessment A UNDP/GEF Handbook on methodologies for technology needs assessments Contents 1. Introduction and preliminary issues Introduction Why technology needs assessment?

Why this handbook? What this handbook provides Methodologies for TNA – what they are and what they are not Who this handbook is for

2. Overview of TNA processes and implementation Institutional arrangements and stakeholder engagement Implementation actions 3. Description of the TNA process and activities

Preliminary overview of options and resources Identifying priority needs – determination of criteria for technology assessment Selecting technologies, prioritising sectors Identifying barriers Defining and selecting actions Pulling it all together – preparation of synthesis report

4.0 TNA and adaptation options 5.0 Reference sources and technology information


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1. Introduction and preliminary issues 1.0 Introduction This handbook, developed by the UNDP-GEF with input from a wide range of multilateral agencies and country experts, has been designed to provide a straightforward approach to technology needs assessment (TNA) that may be adopted and adapted by country teams undertaking TNA. Its primary purpose is to assist countries respond to the decisions of the UNFCCC on activities to enhance technology transfer, and to help ensure that lessons are learned from the ‘first mover’ nations for the benefit of all involved in this process. It has been designed to provide a clear description of what effective TNA is likely to entail, highlighting generic issues and drawing on case studies to provide examples. The report is structured as follows: • Part 1 (this section) provides an overview of the context for and origins of the

handbook, and of its purpose. It also provides an introduction to the concept of a ‘methodology’ for TNA and describes whom the book is targeted toward.

• Part 2 considers the parallel processes involved in preparation of TNA; stakeholder/institutional issues and the activities required to implement the assessment’s findings.

• Part 3 considers in detail the activities required in the assessment process. • Part 4 discusses the particular issues in considering adaptation options (to be

developed). • Part 5 provides a brief review of technologies and a detailed review of technology

information sources (to be developed). A range of case studies are used to illustrate various aspects of this work (to be added). The handbook should not be seen as a self contained activity or a finished product. It is intended that the handbook should be updated and allowed to evolve, and that it will be used alongside a range of workshop and training activities on TNA, which is itself one aspect of a wider portfolio of activities to enhance technology development and transfer. 1.1 Why Technology Needs Assessment? Technology needs assessment (TNA) consists of an evaluation of the opportunities available to countries to reduce greenhouse gas (GHG) emissions and climate vulnerability and to contribute to other policy goals – on the basis of the technologies, practises and reforms that might be implemented in different sectors. It is a means to an end; it can inform and assist in a range of activities to improve and accelerate the uptake and development of new technologies – in this instance for climate change mitigation and adaptation – in all countries. Thus TNA is not a stand alone activity; rather it is a development of the work most countries have already carried out for their National Communications and through other activities to enhance technology transfer.


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Many countries already have extensive plans and programmes in place to enhance technology transfer. TNA is a means by which assessment of development and climate response needs and opportunities to be brought together and integrated. In addition to country activities, technology transfer (defined as the flow of experience, know-how and equipment between and within countries) has long been a priority under the United Nations Framework Convention on Climate Change (UNFCCC). Article 4.5 of the Convention requests annex 1 parties to take steps to assist parties, in particular developing countries, in the process of technology transfer. At the first Conference of the Parties (COP) to the UNFCCC, the Subsidiary Body for Scientific and Technical Advice (SBSTA) requested the Inter-governmental panel on climate change (IPCC) to undertake an assessment of the issues surrounding technology transfer. The subsequent report, Methodological and technical issues in climate change1, discusses a wide range of activities to enhance technology transfer. The importance of assessing technology needs, as part of a combination of activities to enhance technology development and transfer, has been explicitly recognised and agreed by the COP, and measures have been put in place to enable and assist countries undertaking TNA. By decision 4/CP.4 the COP urges non- annex 1 countries to submit their prioritised technology needs, especially those relating to key technologies to address climate change. Decision 2/CP.4 directed the Global Environment Facility (GEF) to provide funding to developing countries to assist with this process of technology needs assessment (TNA). There are now 60 countries in the process of assessing their technology needs under through the Implementing Agencies of the GEF. These activities are commonly referred to as ‘top ups’. Parties adopted in decision 4/CP.7 a framework to enhance the implementation of Article 4.5 of the Convention, in order to facilitate and advance technology transfer activities. The framework encompasses five integrated components: technology information, technology needs assessment, capacity building, enabling environments & mechanisms. TNA is the first step in the implementation of this framework. Work is under way in many countries on adaptation strategies. Countries are elaborating current and future vulnerability, adaptation assessments, and national adaptation programmes of action (NAPA). These studies include an adaptation options analysis as well as the identification of the barriers and opportunities for implementation, including technological issues. At present the issues that surround adaptation present distinct challenges relative to mitigation – these are returned to in chapter 4. Thus, technology transfer is of high importance in the context of both the UNFCCC and country development activities. And technology needs assessment forms an important part of an integrated set of activities to improve technology development and transfer.

1 IPCC 2000


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1.2 Why this handbook? This handbook has been produced in response to a survey undertaken by the UNDP of countries undertaking top ups, and in the light of a workshop on the subject convened by the UNDP-GEF and UNFCCC in Seoul, Republic of Korea. The UNDP survey found that countries are at different stages of implementation and that whilst some are well advanced others are experiencing difficulties. The survey found that:

• Technology transfer is an increasing priority • Objectives, approaches and activities vary widely, perhaps reflecting the limited

amount of guidance available in the early stages • There is a need for a practical and integrated approach for assessing technology

transfer It was further found that in order to improve the quality and consistency of technology needs assessment it is important that countries explicitly follow a consistent, coherent and transparent approach. Without this there is a danger that countries may:

• Focus on the wrong sectors and/or push projects on the basis of predetermined priorities

• Gather data without a clear understanding of its relevance and relative importance • Carry out detailed studies on technologies without a clear picture of how these

suit relative needs and priorities • Engage with stakeholders without a clear understanding of goals

In May 2002 UNFCCC and UNDP-GEF convened a workshop in order for country experts and multilateral organisations to discuss methodologies and issues for TNA. This workshop confirmed that countries vary widely in their stage of development in the TNA process and in their approaches to it. A number of core conclusions and recommendations stand out:

• Most of the countries started their top-ups without methodological guidance and therefore used improvised methods; however these provide a useful reference point for future work.

• The proliferation of studies and papers on methodologies for technology transfer, some of which appear quite complex, can act as a barrier to effective TNA.

• Further studies are unlikely to be helpful at this stage. Instead, the core elements involved in TNA need to be laid out in a simple manner in order to allow countries to implement straightforward and coherent approaches to the problem.

• It is possible to learn the lessons of the countries most advanced with this process, to the benefit of those that are at an earlier stage – but as yet there is no clear vehicle for doing this.

• The concept of a ‘methodology’ suggests to many a mechanistic approach, which is likely to struggle to accommodate the wide variety of country circumstances –


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in developing consistent and comparable approaches to TNA it is important to be clear that there is no ‘one size fits all’.

• TNA is a means to an end – improved technology transfer – and not an end in itself, it is therefore important to simplify and accelerate the process where possible, particularly in countries that have made limited progress to date.

• Identification and evaluation of information sources is an important obstacle. As a result of both the survey and the workshop the UNDP and UNFCCC, together with other multilateral agencies and national experts, decided that the provision of a ‘handbook’ or user guide, alongside training and other capacity building activities, could be of considerable benefit to countries less advanced with TNA activities. 1.3 What this handbook provides The handbook provides the following:

• A straightforward approach to TNA that countries can apply as part of integrated

technology transfer processes. This must be tailored to individual circumstances, but generic issues are laid out

• Examples of ‘real-world’ success, in the form of case studies from countries that are well advanced with TNA (to be developed)

• An introduction to key technology options, and to the means by which needs, technologies and resources may be evaluated – considering both mitigation and adaptation options

• A reference list of technology information sources (to be developed) The handbook has been designed for maximum clarity and accessibility. It is short and conveys key issues; it is not a detailed reference manual or ‘academic’ paper. A number of organisations have looked at methodological issues in technology transfer, including those that surround technology needs assessment. The relevant reports are listed in the reference section (see UNEP/Riso xxxx, UNEP 1998, various approaches cited in Zou 2002, CTI 2002, IPCC 2000). However, few of these have looked in detail at climate response needs assessment processes and activities2 – most are concerned with the wider picture of technology transfer in its entirety, which can add complexity, and some are not addressed specifically to climate technologies. The handbook does not attempt to compare or contrast existing approaches, neither does it choose or advocate any particular approach. Rather, generic issues in ensuring that TNA is carried out in a coherent and consistent manner are explored, drawing upon relevant sources including CTI and UNEP, the UNDP National Communications Support Unit and survey of countries undertaking top ups, and upon discussions and country presentations from the Seoul workshop.

2 The main exception is CTI 2002, however whilst we draw upon this useful report as appropriate, we also incorporate insights from a wide variety of other sources.


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1.4 Methodologies for TNA; what they are and what they are not The concept of a methodology for technology needs assessment is simply a clear and consistent description of a set of activities that can help to ensure that TNA is undertaken in an effective and efficient manner. Thus in essence a ‘methodology’ in this context is simply an outline or overview of a step-by-step approach to a particular problem. This does not mean that TNA can be reduced to a simplistic or necessarily linear approach (where one step must be followed by another); there are linkages and feedbacks between all of the steps and activities described here. It is possible to identify a wide range of methodological issues for countries seeking to improve and augment the development and transfer of technologies. It is therefore important to be clear that this handbook is primarily concerned with one aspect of the technology transfer process; technology needs assessments. As described above, these consist of an evaluation of the opportunities available to countries to contribute to climate and other policy goals – on the basis of the technologies, practices and reforms that might be implemented in different sectors. This is not to suggest that TNA is any more or less important than any of the other activities that can improve the flow of technologies and know-how into and within countries, indeed needs assessments only make sense when viewed within this wider context. It is also the case that a variety of approaches to technology needs assessment are available; several studies have considered, either explicitly or implicitly, the TNA process. In most cases this is set within a wider context – methodological issues in the broader technology transfer process. These studies entail varying degrees of complexity, in part as a result of the extent to which they focus solely on TNA, or also deal with wider issues. It is not the purpose of the handbook to provide a discussion of different approaches and their merits; rather it is to set out a viable and consistent approach in a manner that is useful for countries undertaking work in this specific area. Finally, it is important to be clear that in describing an approach, or methodology, for TNA the handbook does not set out to prescribe a single, inflexible means by which TNA may be delivered. Country circumstances differ widely and steps, sectors and options that apply in some countries may be entirely inappropriate in others. This diversity of circumstance is often captured in the expression ‘one size does not fit all’. However, there are many steps and considerations that are common to all and the approach set out in the handbook explicitly allows for a variety of opportunities and obstacles. The methodological issues set out here are designed, as far as is practicable, to help countries to modify and adapt the processes involved to suit particular circumstances. 1.5 Who this handbook is for The handbook is for professionals working within non-annex-1 countries to prepare TNAs, most commonly under the auspices of the relevant government departments. It has also been designed to provide country stakeholders in other government departments,


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NGOs and relevant industries (both private and public sector) with a guide to a process with which it is likely to be fruitful for them to engage. Finally, the handbook should also prove useful for professionals within multilateral agencies and donor countries, and for those private sector companies in all countries whose activities may contribute to transfer of climate technology.


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2.0 Overview of TNA processes and implementation Three types of activity are required for effective TNA. The first is concerned with the institutional arrangements for stakeholder engagement that facilitate the process, the second with TNA assessment processes and activities and the third with a process for implementation3. We now discuss each of these in turn, providing comments and suggestions for effective action. 2.1 Institutional arrangements and stakeholder engagement A variety of institutions and agencies have an interest in technology transfer. Providing a clear framework for interaction between and within institutions is important because effective technology transfer and development activities require that all relevant stakeholders are engaged and involved. Failure to engage with stakeholders can result in a number of problems:

• misrepresentation or omission of some sectors, options and opportunities • failure to consider the full range of benefits of and problems with options • difficulties in undertaking TNA (for example through lack of specialist

knowledge) • difficulties in implementing TNA recommendations, as stakeholders required for

implementation may misunderstand or object to proposed actions • opposition to proposed actions from other interest groups (such as other

government departments, NGOs and business groups)

Securing adequate stakeholder participation requires a structured and ongoing approach that involves all relevant parties at an early stage, makes the impacts upon them and their responsibilities clear, and continues to engage with all stakeholders throughout the assessment and implementation process. This sub-section therefore provides:

• A list of the main stakeholder groups by function • Discussion of the role of different types of stakeholder • Consideration of the role of the private and public sectors • Key steps in stakeholder engagement • Pitfalls and problems • Ways forward

3 This categorisation is based upon the description of TNA processes and implementation, and how they fit into wider activities for enhanced technology transfer provided by the Climate Technology Initiative (CTI 2002). A number of sources provide alternative discussions of methodologies and related issues in TNA, however the importance of these three strands of activity is uncontroversial and common to a range of methodologies (Zou 2002), so this categorisation is roughly adhered to here. Descriptions of activities and suggestions for how to undertake them include ideas drawn from a range of sources.


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Identifying stakeholders The list below provides a starting point for developing a list of stakeholders. It is important to note that the precise set of stakeholders is likely to differ between countries. Countries differ in terms of the structure and split of responsibilities in government departments, in terms of sectoral organisation, the public/private sector split in some sectors and in terms of resources and opportunities. For this reason we present key stakeholders in terms of their function, as well as the main actors that are likely to be involved. The list of stakeholders by function should include:

• Government Depts with responsibility for - relevant areas of policy – climate, energy, environment and others - regulation of relevant sectors – energy, agriculture, forestry etc - promotion and development of industry and international trade

• Industries and/or public sector bodies responsible for provision of utility services (energy, water, etc)

• Representative companies or bodies in other greenhouse gas intensive sectors (eg energy intensive industry)

• Companies and industry bodies involved in the manufacture, import and sale of climate response technologies

• NGOs involved with the promotion of environmental and social objectives • Institutions that provide technical and scientific support to both government and

industry (academic organisations, industry R&D, think tanks, consultants) • Country divisions of international companies responsible for investments of

critical importance to climate policy (eg the energy sectors) • International organisations and donors

(Case study illustrating stakeholders to be added) Stakeholder roles Defining roles and responsibilities is an important part of the process of stakeholder engagement. An overview of a process for engagement is provided below, and the respective roles of private and public sectors are discussed. However, it is important to ensure that strengths and expertise are utilised as effectively as possible, these are likely to lie within all of the above functions and the lead agency needs to make effective use of other members of the project team. It is important to note that in many instances there is likely to be both a core team of direct participants and a wider group of affected and interested parties. It is therefore important to distinguish between activities that will require direct and detailed input from the core team (for example resource assessment, technology costing, preparation of reports and other materials), and wider stakeholder consultation and engagement activities (workshops, public hearings, consultation papers). This discussion focuses on the core team. Identifying wider stakeholders requires less detailed comment as it is


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possible to allow them to ‘self-select’ by publicising consultation papers and holding public fora to encourage debate. It may prove effective if, following preliminary consultations, sub-teams or sectoral working groups are formed to push ahead in specific areas. This may have advantages in terms of manageability. However the extent and usefulness of this approach will depend on country circumstances, such as the capacities (human and financial) of different departments and sectors involved. It is also important to ensure that the TNA assessment process does not become ‘compartmentalised’ or fragmented at too early a stage; assessment must initially compare across all sectors and technologies. It is only once the TNA assessments are complete and implementation begins that it is likely to be appropriate for countries to divide up into action teams in priority areas. (box on tools by which stakeholder consultations may be handled to be added) Role of the private sector Technology transfer is a complex process that involves both public and private sectors. The extent to which governments are directly involved in technology transfer activity will vary by country – influenced by such factors as; the level of privatisation and liberalisation of utility sectors, the share of investment accounted for by bilateral and multilateral donors as opposed to direct foreign investment, and flows of goods and information within the private sector. In many cases the private sector is of paramount importance as it is the most significant vehicle for direct flows of capital, technology and know-how. Nevertheless, activities to identify country needs and priorities, and measures to enhance the flow of technology with social and environmental advantages are of necessity ‘public goods’. They benefit all citizens, and the issues and priorities involved cannot necessarily be captured through commercial decision making alone. They may also entail consideration of ‘external’ costs – such as environmental damage – which companies do not bear directly. As a result, primary responsibility for assessing opportunities for technology transfer to enhance social and environmental benefits lies with governments. In addition, governments, through regulation, information provision, incentives and direct donor relationships that lever private funds, provide the framing conditions in which companies operate. In many cases this may entail action to help overcome market failures and barriers and to internalise external costs. For these reasons, both a strategic overview by government to enable the right framing conditions to be put in place and effective engagement with the private sector are required for successful climate technology transfer.


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The engagement process The processes of stakeholder engagement have been characterised in terms of four steps4:

1. Identify stakeholders and consult key agencies 2. Convene meeting to explore objectives and scope 3. Establish core team and identify lead agency, lead technical institution and other

direct participants 4. Set out a process for ongoing stakeholder involvement

It is important that this sequence of actions is undertaken in an iterative and flexible manner. It should not be seen as a rigid sequence of steps, rather as a set of ongoing actions that inform and feed back to each other; for example it is likely that additional stakeholders could be identified at the first stakeholder meeting. Problems and pitfalls It is almost inevitable that a number of problems and difficulties will befall the stakeholder engagement process. Whilst it is clearly impossible to identify all of these in advance for every country, a number of generic issues can be identified:

• Active engagement of a relatively large number of stakeholders, some with competing interests and agendas, might give rise to conflict and some difficulty with decision making.

• It is also possible that some stakeholders will be able to drive the process to benefit their own interests – so called ‘capture’ of the process by interest groups.

• TNA could absorb a large amount of skilled staff time and resources in countries where these are both in short supply.

Ways forward A number of steps can be taken to ensure from the outset that the stakeholder engagement process works effectively, helping to avoid some of the above difficulties, these include:

• Measures to assist manageability – clear objectives, a small core team and self-selection by wider consultees.

• Establishing clear lines of command at an early stage, with a lead organisation agreed and charged with keeping the process on track in accordance with clear objectives.

• Defining clear objectives at an early stage. • Transparency in all decision making and consultation activity. • Ongoing involvement of all stakeholders. • Setting realistic goals for the scope of preliminary activity.

4 CTI 2002


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2.2 Implementation Effective implementation of the actions identified in TNA is critical – assessment is of little purpose if it results in little action. The stakeholder engagement activities described above are essential for effective implementation as stakeholders involved in implementation need to agree with the main findings of the TNA process. This is likely to require substantial ‘buy in’ from the private sector. However, it is equally important that the implementation process itself is carefully thought through and planned. A number of factors are likely to be essential:

• adequate resources • a clear and transparent implementation programme • clear ‘milestones’ by which success may be gauged • ‘fit’ with existing government and donor sponsored activities and plans • understanding of private sector investment priorities and constraints • effective ‘barrier busting’ policies where appropriate • ongoing engagement with stakeholders (particularly those responsible for

implementation steps) • flexibility and revision of plans and programmes in light of new information

and/or changed circumstances The main message of this chapter is that assessment activities will only give rise to effective technology transfer if the institutional arrangements and implementation activities are also dealt with effectively. Nevertheless, assessment activities lie at the heart of the TNA process, and it is to these that we now turn.


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3.0 Description of the TNA process and activities This section provides a detailed description of activities required to undertake TNA. This includes an overview of the processes involved and information about how to undertake each step. In general, activities that encompass the following considerations will be required:

1. Preliminary overview of options and resources 2. Identifying priority needs – determination of criteria for technology assessment 3. Selecting technologies, prioritising sectors 4. Identifying barriers 5. Defining and selecting actions 6. Pulling it all together

This list is similar to those developed by both the CTI and UNEP in work on technology transfer (Zou 2002). Country case studies also indicate that these steps mirror practical experiences. However it is important to be clear that our purpose here is not to prescribe a single, rigid approach – rather it is to lay out one view of the activities required for the TNA process, so that countries can adapt and adopt as appropriate. There are numerous feedbacks between and within each ‘step’, and the above should be viewed as a list of interrelated activities rather than a consecutive set of steps. The relative weight of each, and means by which each is pursued, will differ between countries. We now consider each step in turn. 3.1 Preliminary overview of options and resources Assessing technologies against country determined criteria requires a preliminary assessment of the current status of sectors and of technology and resource options. This data gathering exercise must be undertaken before detailed technology evaluation can be undertaken. It requires a view of four factors: 1. current circumstances of different sectors – technologies in use, GHG emissions and

financial conditions 2. potential for fuel switching and efficiency improvements by sector 3. country low carbon energy resources (eg wind speeds, solar insolation, biomass

residue resource) 4. suitability of different low carbon technologies (eg wind turbines, photovoltaics,

biomass fired cogeneration of heat and electricity)5 Many countries will be able to draw upon existing sectoral development plans and assessments, for example those carried out for National Communications, but additional work is likely to be required. And of course, the extent and nature of existing assessments will vary by country. It is important to note that the factors interrelate – for instance the 5 This list is oriented to mitigation as preliminary assessment of adaptation options is discussed in chapter 4.


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potential for efficiency improvements is partially determined by sectoral financial constraints. However is suggested that countries undertake simple assessments of each of the above factors in order to develop a preliminary view of where the greatest scope for improvement might lie, and of gaps in existing knowledge. It is important that countries take a view of both the status and potential for improvement in existing sectors (factors 1&2) and of absolute resource constraints and the suitability of a wider range of technologies (3&4). This allows countries to assess what is likely to deliver maximum benefit at minimum cost in the short term within existing sectors, but also allows them to assess promising options for the longer term or in emerging sectors. The extent and detail of these preliminary assessments should reflect country circumstances. In some countries detailed data may be available from existing sectoral analyses and resource studies, in others a lack of data may be the most significant finding. Where data is lacking, actions to remediate this might be identified as a priority activity. It is important that countries try to avoid overlooking opportunities and resources simply because particular options are better researched or have been exploited in the past. Countries are likely to find that the one or more of following sectors are relevant, and that some of the following technologies and resources offer benefits: Sectors

• Electricity production, transmission and use • Other energy supply sectors – natural gas, LPG and other domestic fuels • Transport • Forestry • Agriculture • Energy intensive industries • Waste management and recycling • Buildings and construction • Water management • Coastal defences

Technologies and resources

• Solar o PV, off-grid rural electricity, grid connected building integrated systems,

central station o active thermal for heating o active thermal for central station electricity generation o passive thermal

• Wind o Large scale electricity generation, off-grid rural electrification o Water pumping

• Hydro o large hydro


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o small scale (run of river and small dams) • Geothermal (heat and electricity generation) • Biomass

o residues and energy crops for domestic heating o residues and energy crops for electricity generation, cogeneration and

industrial process heat o biofuels for transport

• Efficient end use technologies o appliances for industry o vehicles o domestic and commercial heating, lighting and appliances

• Efficient technologies for fossil-fired electricity generation and transmission o Advanced central generation technologies o Decentralised generation technologies o Combined heat and power schemes (CHP)

• Industrial process efficiency • Improved building design

o Building insulation o Passive cooling and ventilation o Natural lighting

• Agricultural practices • Afforestation

This list is indicative and will not apply to all, and countries may also be able to identify options not listed. However it is hoped that it provides a starting point for more detailed work. The information from preliminary assessment provides the raw data for a more detailed consideration of technologies and sectors. Preliminary assessment reports should be prepared by countries; a summary of climate change response technologies could be compiled and broken down by sector. These may be sufficient to screen out the least relevant sectors and technologies. However, it is likely that many countries will still be faced with a multiplicity of options. The next stage is evaluation.


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3.2 Identifying priority needs – determination of criteria for technology assessment Identifying priority sectors, technologies and actions requires a view of the contribution that new technologies in different sectors might make to social, environmental and development goals. It also requires that the cost effectiveness of so doing, in terms of the (possible) higher costs of new and alternative technologies, is considered. This requires some means by which the different goals can be prioritised, such that trade offs between objectives, should they occur, can be dealt with fairly and transparently. Whilst it is not possible to provide an in-depth guide for each and every country the main issues in developing criteria and processes for technology and sector prioritisation are outlined here. At its most basic, a criterion for selecting technologies and/or sectors will depend upon three factors:

• contribution to development and wider policy goals • contribution to climate change mitigation or adaptation • market potential and costs

Each of these factors can only be assessed on the basis of a wide range of ‘sub-factors’, examples of which are outlined below. It should be noted that these are examples rather than definitive lists and that the relative weight of each is likely to differ between countries and sectors:

Key steps – preliminary assessment activity

• Compile an overview of existing data sources for technologies and sectors

• Identify data gaps and the steps that might be needed to remediate them

• Identify the main sectors and technology options

• Prepare preliminary assessment report, to include;

o current circumstances of different sectors – technologies in use, GHG

emissions and financial conditions

o potential for fuel switching and efficiency improvements by sector

o country low carbon energy resources (eg wind speeds, solar insolation,

biomass residue resource)

o suitability of different low carbon technologies

• Circulate preliminary assessment report to stakeholders


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• Development benefits o Job & wealth creation for the poor o Capacity building (human, physical, environmental) o Use of local resources o Economic and industrial efficiency improvement o Reducing harm to the environment (non climate impacts)

• Contribution to Climate Change o GHG emissions reduction potential o Adaptation potential o Enhancement of CO2 sinks

• Market Potential

o Capital and operating costs relative to alternatives o Commercial availability o Social acceptability and suitability for country conditions o Replicability and potential scale of utilisation

Determining the weight and importance of each of these factors is partly a political decision, affected by country priorities. It will also be affected by country circumstances; social, environmental and economic. Countries may decide to apply differential weighting to the various factors or to weight all factors equally. The purpose of this section is therefore to provide some examples of how to go about making decisions and assigning weights, not to predetermine country specific concerns and priorities. Three sources of opinion must feed into the weighting and assessment process:

• independent expert assessments/judgements • government assessments/judgements • stakeholder consultation

Effective assessments, with the buy in of all stakeholders, will utilise a combination of all three. Whilst the most transparent method is to draw upon stakeholder inputs, this alone may not fully reflect expert knowledge or government priorities. We deliberately avoid prescribing the mix of these three activities as this is a matter for countries to determine. However in all cases the following steps will be required:

• agreeing a list of the factors that are to be included in the assessment criteria • weighting factors if and as appropriate • agreeing the process of assessment (stakeholder, expert, & govt roles clearly

defined) • listing the sectors and technologies that will be assessed • publication of the findings of the priority assessment process

A variety of approaches to assessing technologies (within this broad framework) exist – these include; multi-criteria analysis, cost benefit assessments (CBA), risk benefit


analysis (RBA) and so on. All of these are techniques for prioritising technologies and weighting the criteria by which they are to be assessed. It is not the purpose of this handbook to discuss the relative merits of different approaches – there is a wide literature on that already. It is important that countries choose an approach that is appropriate for their circumstances. In many cases a straightforward and inclusive approach to technology prioritisation is likely to be the most effective – simplicity can help ensure that stakeholders will be engaged; thus assisting in the implementation of TNA action plans. And whatever approaches countries use they are only as good as the data that is fed into them. But country circumstances differ widely and in some cases the data and the scale of the decision making problem will justify a sophisticated approach. (case study on the development of evaluation criteria to be added)

Key steps – determination of evaluation criteria

• State the objectives of the evaluation criteria - to provide a means by which

technologies and sectors may be evaluated, based upon a range of sub-factors

under the following headings;

o contribution to development and wider policy goals

o contribution to climate change mitigation or adaptation

o market potential and costs

• State the process by which evaluation criteria are to be decided, and how the

following are to be included in the process;

o independent expert assessments/judgements

o government priorities

o stakeholder consultation

• Provide a discussion of the weighting of each criterion, to include whether

weighting is required, and the potential means by which weights will be

incorporated into decisions (CBA, RBA, etc)

• Agree the steps above with core stakeholders

• Define and agree evaluation criteria

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3.3 Selecting technologies, prioritising sectors Once countries have a selection criteria and process for evaluation defined, and preliminary studies of options and resources have been undertaken, it is possible to begin the process of evaluating technologies and sectors. The preliminary assessment reports need to be presented to the decision making stakeholders (the core team defined in 2.1 above) for prioritisation. Preliminary assessment undertaken as above will allow countries to come at the process of selection and prioritisation from two related, but distinct, directions:

• Firstly countries will have a view of the sectors with potential to benefit from technology development and transfer – and/or of the need for further data

• Secondly countries will have a view of the technology options and resources available to them – and/or of the need for further data

It is important that countries consider the needs and opportunities identified in sectoral assessment priorities alongside the technology options. In this way it will be possible to select sectors where action is appropriate/needed and technologies for delivering this. A relatively straightforward technique to help with this process is technology ranking by stakeholders/experts. This should involve the stakeholders identified through activities set out in section 2.1, and stakeholder, expert views and government priorities must be adequately reflected. Engagement with the ranking process may be carried out through a series of workshops or via alternative media such as the internet. As discussed above, a number of techniques exist by which technology ranking can be carried out and by which the assessment factors can be weighted (decision analysis, CBA, RBA etc). One tool that is compatible with all of these is to develop a simple matrix of technologies and assessment factors – based upon the criteria set out in section 3.1. Technologies may be ‘scored’ by stakeholders according to the scale of their contribution to various policy goals. An example of a technology ranking matrix is provided below, and how this process might be carried out in practice is illustrated in case study x (Ghana). Figure 1 Example of technology ranking matrix

Ranking of contribution to climate change and other policy goals, and economic viability Technology GHG

mit’n

Adaptation benefits

Other env’t impacts

Contribution to competitiveness & economic efficiency

Job creation potential

Cost effectiveness

Market potential

Social acceptability


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• Technologies ranked (for example) on a scale of 1 – 5, where 5 indicates a strongly positive or ‘high’ contribution to the goal in question, 1 a strongly negative or ‘low’ contribution.

• Factors may or may not be weighted to reflect their importance (see 3.1, above) and various criteria may be applied to ensure adequate contribution to key goals.

• Totals for each technology option provide an indication of technology rank. Some countries may wish to limit the extent to which simplistic techniques are used to account for complex, sometimes hard to quantify, factors. This is a matter for countries to decide. Ranking exercises can help to ensure that stakeholder priorities are understood and reflected, and can inform the selection process. However, it is important to note that this cannot provide all of the answers; in many cases judgements will still be required; for example, it is extremely difficult to make judgements that cut across highly diverse sectors – how is the energy sector compared to coastal management? Inclusion of the ranking matrix should not be interpreted as suggesting that the problems and uncertainties involved in technology and sector selection and prioritisation can be reduced to a simplistic and mechanistic process. The TNA should start with a broad view of technologies and sectors. However, the number of technologies and sectors that countries address through implementation activity will vary according to the capacities of countries. The TNA should therefore identify priorities for implementation. In many cases it may be appropriate for implementation plans to target a limited number of options in the first instance – perhaps just two priority sectors. These can be identified as part of the TNA assessment, but only once a broad view of technologies and sectors has been delivered. In selecting priority areas countries may wish to take into account two distinct types of technology transfer and development opportunity: • It is likely that most countries will be able to identify ‘win win’ options that deliver

both climate and other objectives, and are available at low (even negative) costs. The reason for this is that there is a wide variety of technologies that offer lower costs, higher efficiency and better environmental performance than older, or more established alternatives. This is true in almost all countries (developed and developing) in end use domestic and industrial appliances, where energy efficiency can be improved considerably, and in many countries in the transport and electricity sectors, where more efficient and cleaner technologies are available, but not widely adopted. In many cases market barriers inhibit the uptake of cost effective options – an issue returned to below.

• In the longer term, new options will become available and the relative merits and

economics of different technologies and developments in different sectors will change. Countries may wish to invest some resources in the development and/or demonstration of technologies that are not currently ‘win win’ but offer particular promise for contributing to climate and other goals in the longer term.


It may also be the case that countries wish to concentrate efforts in areas where there is scope for government action to remove barriers; these are considered in the next section. (Case study on technology ranking exercise to be added)

3Tootst

Key steps – technology assessment and prioritisation

• Evaluation should include a range of views to reflect;

o Expert assessments

o Government priorities

o Wider stakeholders

• Technologies can be evaluated against a range of criteria, using the data from

the preliminary assessment process. This should cover;

o the sectors with potential to benefit from technology development and

transfer – and/or of the need for further data

o the technology options and resources available – and/or of the need for

further data

• Evaluation needs to consider a broad range of options, but identify a smaller

number of priority areas for implementation actions

• A ranking matrix can help to ensure each technology is assessed against each

criterion in a transparent way.

• A report should be produced that states;

o all of the technologies and sectors assessed

o the criteria used for evaluation

o the stakeholders involved

o the outcome – priority sectors and technologies

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.4 Barriers he broad view of options and sectors described above should also be related to the bstacles and barriers that might be restricting uptake. There is a considerable literature n the market barriers that can prevent or reduce the uptake of new and more efficient echnologies. Some of these are specific to climate response technologies, and some pecific to developing countries, but many are generic and affect the adoption of new echnologies in all countries.


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In some instances policies result in market barriers – for example where regulation acts to disadvantage new technologies or polluting practices are subsidised. In other cases market barriers arise from market structures – for example where monopoly powers result in entry barriers. However in many cases the nature of the marketplace can disadvantage new technologies. Finally, where the full costs of polluting technologies are not reflected in prices – that is, pollution costs are externalised – cleaner technologies may not be able to compete. The main categories of barriers are as follows:

• Policy o Regulations and standards that preclude new technologies o Distorting market interventions such as subsidies for polluting industries o Regulated markets that create disincentives for new technologies o Planning system issues

• Market structure o Monopoly powers that reduce incentives to innovate and erect barriers to

new entrants o Dominant (oligopoly) interests that erect barriers to new entrants and may

discourage innovation

• Market o Split incentives (where investors are not the consumers of more efficient

technologies – the classic example being the ‘landlord-tenant’ case, where the landlord is responsible for building investments that could improve energy efficiency but has no incentive to do so as is not responsible for energy costs)

o Access to capital (where new technologies are capital intensive, even if operating and lifetime costs are low, potential investors may lack the financial resources required to bear the ‘upfront’ cost)

o Information barriers (this may take several forms; the simplest is where potential purchasers are ignorant of new technology possibilities. They may also be faced with multiple and conflicting information and have limited ability/time to absorb it, and choose a known option in preference to a new alternative)

o Externalisation of pollution costs In all of the above categories, policies can address market barriers. A detailed discussion of this subject is beyond the scope of this handbook, the reader is referred to xx (insert list of potential sources). However a number of key points stand out:

• In many cases regulatory reform can assist in the removal of barriers, without any requirement for financial intervention – this includes the modification of unhelpful regulations in some instances, tighter regulatory standards in others.


• In other cases relatively modest financial interventions are likely to be involved – for example in information provision and pilot/demonstration schemes.

• The need for substantial redirection of funds is limited to the removal of subsidies for polluting sectors (which could also have profound distributional, economic and employment consequences) and/or financial flows directly subsidise climate change response technologies or to help overcome barriers due to access to capital.

• Collaboration with the private sector will help in many instances, for example voluntary agreements can reduce the need for new regulation and encourage compliance, and modest subsidies may be able to secure improved financing terms from private lenders, assisting potential purchasers in accessing capital.

• Internalisation of external costs, for example through carbon taxation, can encourage the uptake of climate friendly technologies. However it will not, of itself, address each and every barrier and is therefore unlikely to be a sufficient policy measure alone.

‘Barrier busting’ therefore requires a range of carefully tailored policy measures, there is no one policy that can tackle all barriers and market failures. It is recommended that TNA first identifies a broad range of potential barriers; detailed policies to remove barriers may then be considered in more detail for the priority sectors identified for implementation actions.

3At 3Os

Key steps – barrier assessment

• Identify generic barriers to increased deployment of new technologies by

sector, to include the following categories (described above);

o Policy

o Market structure

o Markets

• Identify specific barriers to priority sectors identifies in step 3.3

• Identify ‘barrier busting’ policy measures

• Revisit priority sectors identified in step 3.3 in the light of barrier assessment

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.5 Policy options ddressing barriers is only one aspect of policies which may be put in place to enhance

echnology transfer. (discussion of policy options to be inserted)

.6 Defining and selecting actions nce technology and sector priorities have been identified, barriers assessed and

takeholders assembled, countries can define a programme of action to enhance


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technology transfer. This will benefit from the inclusion of all the implementation steps discussed in 2.3. Priority actions are likely to fall into the following categories: • Capacity building. Human and ‘soft’ or ‘information’ capital must be built first. This

should include enhancing indigenous data on resources and options, and enhancing public and private sector understanding of climate response options.

• Barrier busting. Governments can improve information flow to the private sector, and collaborate with industry to improve the uptake of new technologies. There will be a role for regulatory and fiscal reform, as discussed above.

• Direct interventions. Direct state/donor purchase of new technologies is likely to be limited in the climate response area, but pilot and demonstration schemes may lever additional private funding.

• A case can be made for supporting the development of new technologies, not yet commercially viable, that could bring low cost benefits in future – this will also assist countries in building human capital.

• Securing funding for activities in 1 – 3. • Detail priority actions in a technology transfer action plan It is important also to ensure that the implementation issues as described in 2.3 above are built into the plan – institutional factors are as important as the ‘substance’ (policies, measures, target technologies) of the proposed activities. Three aspects mentioned in 2.3 are worth reiteration:

• That ‘delivery checks’ and alternative actions are built into the action plan in order that countries can adapt to changing opportunities and/or unforeseen difficulties

• That countries ensure that full regard is given to existing policies and

programmes: o ensuring that conflicting policy actions do not undermine or cancel out

gains from climate response transfer plans o ensuring that complementary policy actions are identified so that both

climate response and other policies benefit from available synergies

• That action plans are developed with full stakeholder cooperation and agreement The technology transfer action plan must also be presented as part of a wider report that sets out how and why key areas are to be prioritised, and actions have been decided. This is the subject of the final part of this chapter.


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3.6 Pulling it all together – preparation of a synthesis report Each step set out above needs to be combined into a coherent whole that allows actions to be pursued and provides an overview of the basis upon which decisions have been made. This will require the compilation of a synthesis report, the main points this should include are summarised in the box below. It is important that all stakeholders view this report as the beginning of an ongoing process, that must integrated into wider technology transfer activities, to improve the flow of climate response technologies. Nevertheless it is hoped that the processes and practicalities set out in this chapter and chapter 2 help to ensure that such a report can be produced and taken forward constructively.

Key steps – technology transfer action plan • Produce an action plan that takes account of the following;

o Priority technologies and sectors

o Capacity building measures

o Barrier busting measures

o Direct interventions

o Securing funding

• And includes;

o delivery checks and alternative actions

o full regard to existing policies and programmes

And is developed with full stakeholder cooperation and agreement


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NB to be added - Case studies (to be inserted into the text as boxes, as appropriate)

Key steps – synthesis TNA report

• The report should include:

o A preliminary summary of climate change technologies, broken down

by sector where appropriate

o An evaluation of sectoral needs and opportunities

o A statement of data gaps

o Statement of criteria and process for technology evaluation (to include

development, climate change and market considerations as described

above)

o An overview of the assessment of technologies according to the agreed

priorities

o List of priority sectors and key technologies for preliminary action

o A review of key barriers and steps to overcome them, with reference to

existing plans and programmes

o A technology transfer action plan (this may include capacity building

and data gathering if these are of critical importance or are key

barriers), with activities and actors clearly defined, and milestones by

which success is to be assessed

o A list of stakeholders and programme for continued stakeholder

engagement


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4.0 TNA and adaptation options to be completed in August/September

1. Understanding adaptation – methodologies, impact scenarios, inherent uncertainties

2. Issues and considerations unique to adaptation – uncertainty about impacts, uncertainty about timescale, limited data on options, limited experience with implementation

3. Progress to date with assessing adaptation requirements and options 4. Adaptation options that are ‘no regrets’ and/or offer mitigation synergies

and synergies with other goals (e.g. biomass crops for remediation of land, mitigation and protection of watersheds and land in the face of climate impacts)

5. Key conclusions and recommendations


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5.0 Technology review and information sources Identification of main ‘climate friendly’ technologies and practices • Assessment of resources and costs • Assessing relevance for meeting energy needs efficiently • Defining strategies for development and use • Analysing options for intervention and capacity building, including education and

training in key sectors (Description of NGO, commercial, academic, govt, multilateral info resources to be inserted).


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References CTI 2002, Methods for climate change technology transfer needs assessments and implementing activities: Experiences of developing and transition countries IPCC 2000, IPCC Special Report: Methodological and technological issues in technology transfer UNEP/Riso xxxx, Guidelines for Mitigation Studies UNEP 1998, Handbook on methods for climate change impact assessment and adaptation strategies UNEP 1999, Economics of Greenhouse Gas Limitations: Methodological Guidelines Zou 2002, Tools and methodologies in assessing technology needs (nb to be completed)

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