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Climate Technology Transfers in a Divided Climate World


Wind turbines on a foggy hillside, partly obscured by low clouds. The landscape is serene with muted earth tones under a gray sky.
(Image: Wikimedia Commons)

80% of global GDP is now linked with varying degrees of commitments towards national net-zero targets, as per Oxford Net Zero. Similarly the World Economic Forum reports how its Energy Transition Index recorded a 1.1% increase year-over-year, reflecting twice the average pace of the previous three years. It is clear that climate transitions are underway. At closer examination, however, there is deep inequality and fragmentation underneath this transition.


To critically explore global climate technology transfers, a number of considerations are necessary. Firstly, examining the limitations of North-South frameworks, then focusing on China —the single biggest player in climate technology production today—and its forced technology transfer model. Lastly, it is important to highlight China’s role as the main force in driving technology adoption in several countries. This can be seen through examples from Pakistan, Brazil, and Egypt, each of whom showcase a different model of technology transfers.


Climate Technology Transfers Defined


Climate technologies are defined by the United Nations Framework Convention on Climate Change (UNFCCC). These technologies are those that have the capacity to reduce greenhouse gas emissions or help adapt to climate change impacts. These include hard technologies such as solar panels and drought resistant crops as well as soft technologies like strategic practices to enhance energy efficiency.


Climate technology transfers can, therefore, be understood as the sharing and dissemination of knowledge and information with regards to climate technologies between countries. Article 10 of the Paris Agreement, “Technology Transfer and Development”, builds on this understanding of climate technologies and their transfers. It sets up specific ways to finance these transfers, encourage early adoption in the developing world, and foster collaboration at all stages of technology development. Thus, at their core, transfers are meant to support access to these tools and skills in places where they are needed the most. 


Drivers of Unequal Access


The International Energy Agency’s (IEA) 2024 Global Energy Outlook finds that there is an urgent need to ramp up clean energy investments in emerging economies, excluding China, which is already advancing rapidly in this field. These emerging markets and developing economies (EMDEs) account for just 15% of global clean energy investments. While low purchasing power explains part of this, a more systematic barrier is the exorbitant expenses that EMDEs have to incur to acquire, operate and maintain these technologies.


An April 2025 report, “The Cost of Capital” by the Columbia Center on Sustainable Investment, indicates that there is plenty of capital available to finance sustainable technologies. Global savings, in fact, amounted to $30 trillion in 2023. However, EMDEs struggle to access these funds.


Traditionally, cost of capital refers to the expected rate of return coming out of a combination of debt and equity in a project. This cost is often expressed as a base rate and a premium. The premium includes a systematic part that accounts for macroeconomic, legal, and political factors and an unsystematic part that is linked to the risk associated with that specific project. This unsystematic part can become unreliable when it is based more on perceived than actual risk.


The Columbia report argues that there is a bias in the calculation of the systematic part of this premium. Countries like India face a very high cost of capital—almost 300 basis points above Italy, the US, and the UK—despite boasting a lower GDP to debt ratio and a high rate of GDP growth. (In 2023, India’s growth rate was 6.3% compared to 2.1% in the US).


The analysis demonstrates that wealthier countries—those with a higher GDP per capita—benefit from higher credit ratings and thus, lower costs of capital. While part of this advantage is related to these countries’ ability to borrow in their own currencies, which limits the exposure to risk that comes from dealing with currency exchange rates, the study notes that credit worthiness in lower income countries is undervalued. EMDEs face higher financing costs even if their actual credit risks are no different than those of richer countries. 


Economic theory also seems to be at odds with credit agencies’ ratings. The Solow-Swan and Lewis models demonstrate this. ‘Conditional convergence’ provides evidence that poorer countries can grow faster than richer countries given similar characteristics such as savings and access to technology and is a major idea under the former. This idea was initially demonstrated by Robert Barro in his econometric studies on per capita income data in the 90s.


The 2021 Journal of Development Economics article “The New Era of Unconditional Convergence,” goes even further and calls the period from the 1990s to today as an era of unconditional convergence since poor and middle income countries have, on average, grown faster than the developed world. This is not just India, China, and the Asian Tigers (Hong Kong, Singapore, South Korea, Taiwan) but in fact all developing countries as a group. Such levels of growth are at odds with how credit rating agencies tend to rate these countries.


The 1954 Lewis model can also be used to show a similar conclusion. This model argues that there are two sectors of interest: subsistence and industrial. The former is characterized by surplus labor and low productivity, while the latter commands higher wages and productivity. The industrial sector grows by absorbing labor from the subsistence sector. Applied to climate technologies, Lewis may have argued that low-income countries with surplus labor would yield high-productivity growth once technologies transfer over. 


If lower labor costs coincide with markets with high potential for technology effectiveness, such as wind corridors or plentiful sunlight, this high-productivity makes even more sense. Furthermore, Lewis may agree with the need for the UNFCCC definition of technology transfers because he believed that merely extracting money from these countries would limit long-term profitability. Meaningfully building local capacity to fully adopt technologies would be the right way for a green transformation. Credit agencies ratings often do not reflect this.


Clean energy systems like solar require a lot of money upfront to build. If borrowing costs are high, then the levelized cost, or the total cost of producing electricity from solar (spread out over its lifetime), looks more expensive than electricity from fossil fuels. This is true even though fossil fuel plants use older, more polluting technology. As a result, countries may delay switching to clean energy, which slows down the global effort to reduce emissions.


Beyond Capital: Other Barriers


The tragedy is that even if capital markets were better, that may still not be enough. In a 2016 article Bernard Colas, senior fellow at the Centre for International Governance Innovation, writes that there are government-driven and resource-based factors that limit the transfer of clean technologies. 


Under government-driven barriers, Colas argues that EMDEs often fail to provide adequate intellectual property rights protections to companies looking to establish themselves in said countries. Registering patents in one country does not guarantee any protection in another country. In Brazil, for example, registering a single patent with the National Institute for Industrial Property may take upwards of 8 years. A company looking to transfer its technology to Brazil may not be willing to wait that long. 


Governments also limit the use of grant-back clauses. These are provisions under license agreements that mandate that the licensee must license back any improvements or developments that may be made on the basis of the original license. Some countries will declare such clauses null and void under certain conditions. In China these may be void if they only provide the improvements to the licensor exclusively. 


There are also some countries which hold ideas of compulsory licensing where the government may allow the use of certain patents even without permission from the owner. This is typically justified under a need to protect public interest, however, the downside is that it may limit innovation within the country. 


Resource-based limitations simply refer to issues where countries lack the legal and political writ to implement their laws. For example, if intellectual property rights are implemented in an unreasonably slow or inefficient way, it may make companies reluctant to conduct business there. 


International climate finance also falls short. Pledges are often generous in words but small in delivery. The collapse of the Just Energy Transition Partnership in Southeast Asia is a notable example. The project was set up to help Indonesia move away from coal power towards cleaner energy sources. Though, while $20 billion were pledged, only 5% was actually disbursed, as per a CastleAsia report. Indonesian officials started viewing this as largely worthless and this perfectly showcases international climate finance’s limited delivery.


There are also issues within Institutions like the UNFCCC. Although they frequently conduct extensive needs assessments, only a fraction of total planned projects are funded. In a report by climate reporting agency African Climate Wire, for instance, it was found that only 21 African projects have been financed under the UNFCCC in the past 15 years. The gap between the rhetoric for technology transfers and actual implementation is clear, even under the ambit of global collaborative institutions. North-South transfers have clear limitations.


Given these barriers, EMDEs have not relied on North-South transfers. Most infamous is China’s approach to force technology transfers. While this is not replicable for every country. It does open the door to South-South or China-South transfers.


China’s forced technology playbook: gains and losses 


In their 2018 article titled “Forced Technology Transfer Policies: Workings in China and Strategic Implications”, Prud’homme, Zedtwitz, Thraen, and Bader present a typology of three sets of policies that China has adopted.


First are a set of ‘Lose the Market’ policies where firms must transfer their technologies in order to access the lucrative Chinese market. Firms will often oblige in order to maintain their market share over their competition. This is true in the case of “New Energy Vehicles”, where the authors argue that companies risk losing footing to the state-supported joint-ventures between other foreign firms and their Chinese counterparts. 


Alan O Sykes, professor of international law at Stanford, also highlights how these corporate structure requirements help Chinese firms bargain for newer technologies (technology transfer). The uncertainty that comes with a firm’s position in the market for frontier technologies makes this a strong motivation, since the companies have to compromise as a means to survive.

 

Second are ‘No Choice’ policies. This is where intellectual property cases are awarded to Chinese firms even though, given the merits of the case, the foreign firm should have won a more favorable ruling. Firms continue to patent in China in spite of losing the ability to completely appropriate their licenses. This is because they want to continue to maintain their freedom to operate. It is a defensive move to stop other firms from patenting their technology and blocking them from using their own inventions. 


A by-product of this set of policies is that certain firms build and own their own plants and do not participate in joint-ventures. These innovation islands limit any possible spillover technology transfers to China. A 2023 Global Policy Watch report, however, shows that although firms are afraid of unlawful judgments, this may be changing. Golden Elephant Sincerity won an appeal with the Chinese supreme court after suing a Chinese firm for copying its intellectual properties.


Lastly, “Violate the Law” policies are those that compel foreign firms to transfer technologies in line with existing rules that can be planned around. China, for example, has fair use laws with regards to patents. These compel foreign firms to let local ones use their technology. In some cases, local firms have even refused to pay licensing fees in cases where they felt that the foreign firm was abusing its power. Under such an aggressive policy, firms are unlikely to transfer over their most advanced technology. As a result, this undermines China’s goal of adopting advanced technology. The technology transfer, thus, is also undermined.


The aforementioned policies show two things: Firstly, while it is clear that these policies are coercive to foreign companies, it has been the foreign player’s choice to interact with what China has to offer. Secondly, the study above seems to show that despite China’s impressive growth in this space, policies that overstep fair appropriations to foreign companies seem to limit China’s technology path. They especially slow down the adoption of the most advanced, or ‘frontier’ technologies, which are key to maintaining a competitive edge in the climate technology market. This is a problem since, as previously mentioned, involvement in early stages of technological development is important to transfer effective technology to the developing world. 


A Friendlier Model: Goldwind


Chinese wind turbine maker, Goldwind, can act as a ‘good’ model for collaborative technology adoption. Its history of friendly collaboration and support for research and development are key takeaways.


The firm grew out of a research center in 1989 that licensed technology from Danish and German firms to install wind power plants in China, as noted by Tsingshua professor Zhang Liang. One of these German companies was Vensys. A Trade and Competitiveness report by the World Bank shows that in 2008, after several years of friendly partnership, Goldwind acquired a 70% stake in Vensys that gave it legitimate and meaningful access to the firm’s intellectual property. This likely played a role in hastening Goldwind’s global dominance. Prud’homme et al also note that Goldwind chose not to pursue state-supported joint-ventures and instead pursued licensing that greatly compensated its foreign partners. In 2016, the World Bank reports, it partnered with Apple on wind power projects in China, too. 


Goldwind did not rely on its government strong-arming foreign companies to reveal their intellectual property. Instead it licensed progressively more advanced technology from foreign firms on the road to developing its own. This was done in a way that benefited its foreign partners too. In fact, Goldwind acquired German turbine-maker Vensys in a friendly takeover in 2008 after being a long-term licensee. On its growth path, Goldwind also invested in educating its workforce, often through training abroad. 


Of course, the company’s growth was not entirely self-reliant. It benefited from favorable government policies. Prud’homme et al note how China’s National Wind Concessions Program and renewable energy targets, for example, guaranteed revenue streams and demand for clean power. Subsidized access to public research was also a key driver for its innovation. Goldwind has been a dominant player in the Chinese domestic as well as the global wind power market, for some time now. As of May 2024, a Bloomberg report places it as the largest provider of wind power installations. 


Collaborative approaches seem to offer a path towards meaningfully acquiring and developing the most advanced technologies, while avoiding the pitfalls of forced technology transfers that stymy innovation.


China and South-South Cooperation


In the past, we have witnessed China playing a financier role in the developing world. However, this is changing. In a testimony before the US-China Economic and Security Review Mission, Kate Logan, Director of Climate Diplomacy at the Asia Society Policy Institute, notes how loans from the Chinese Development Bank and the Export-Import Bank of China—the two main Chinese lending institutions—totalled only $737 million for non-fossil fuel energy between 2021 and 2023. This is a stark reduction from the annual amounts of $15 billion between 2013 and 2020.  


China’s energy engagements today are increasingly driven by exports of clean technologies and investments in manufacturing capacities abroad. In 2024, China exported $177 billion in clean energy technology. Logan also highlights how investments in overseas manufacturing were $58 billion.


Drawing on Logan’s analysis, we highlight three examples from the Global South that show different ways countries are engaging with clean energy from China: Pakistan, Brazil, and Egypt. We choose them to show distinct approaches as well as to highlight perspectives from different parts of the globe (Asia, South America, and Africa). 


Pakistan: Bottom-Up Adoption


Pakistan was the third largest importer of Chinese solar panels in 2024, importing 17 GW of panels in, as Beth Gardener writes for Yale360. To put this into context, Pakistan’s total installed power generation capacity was about 44 GW in 2023. The country represents a bottom-up, consumer driven transition towards renewable technology. This change is driven less by a desire to fight climate change and more by a need to cope with an increasingly expensive and persistently unreliable grid power system. Besides scheduled power outages called load shedding, grid power prices have risen by about 155% over the last few years, also highlighted by Gardener.


Pakistan’s adaptation is bottom-up because it begins from consumers and is based on the ground realities they face. It is unrelated to any government strategy aimed towards reaching any abstract net-zero emissions targets.


Brazil: Building Local Capacity


Brazil offers a contrasting approach to technology adoption that is less consumer-led and more state-driven. 


After an initial surge in Chinese imports of electric vehicles, Brazil responded in two ways. The Rio Times reports that it imposed tariffs on these imports and invited China to invest in local manufacturing. Out of the total $19 billion investment in Brazil’s auto industry, China in fact, represented only $3 billion. 


By linking market access to domestic production, Brazil has leveraged foreign investment to build jobs, skills, and supply chain capabilities. This mirrors the joint-venture strategies China once used to absorb foreign expertise.


Egypt: A Regional Launchpad


Egypt offers a third model, using its strategic location and trade agreements with 22 African nations to position itself as a regional hub for Chinese clean energy technology. In May 2025, Egypt signed more than 30 agreements worth $1.8 billion with Chinese partners. These include joint ventures to produce and assemble EVs, build charging infrastructure, develop energy-efficient management systems, and invest in energy storage. By combining infrastructure investment with technology transfer, Egypt aims to strengthen both its domestic energy transition and its role as a gateway for Chinese technology across Africa.


Shared Lessons and a Break from the North–South Model


These examples stand in contrast to the limitations of traditional North–South technology transfer, which hinges on scarce concessional loans, intellectual property barriers, and foreign aid. In the North–South model, recipient countries typically have little leverage over the terms of transfer and are constrained by higher costs of capital. By comparison, the South–South partnerships with China outlined above demonstrate how developing countries can use trade, investment, and joint ventures to secure affordable technologies, attract manufacturing capacity, and build domestic expertise. 


While even these are no silver bullet, the shift highlights the potential for more equitable and mutually beneficial arrangements in the global energy transition, provided they are designed to strengthen local capabilities rather than create new forms of dependency.


The story of climate technology transfers reveals both the pitfalls of older North–South models and the opportunities that new forms of cooperation present. Traditional approaches have been constrained by credit rating biases, intellectual property barriers, and the chronic underdelivery of international climate finance. While China has forced technology transfers in a way that few other countries can, this has not been without its pitfalls. It has slowed innovation and limited meaningful technology transfers. Goldwind’s case shows that there is a collaborative path forward that would be easier to adopt. 


At this point in climate technology development, many countries have already shown their own paths forward. The varied experiences of Pakistan, Brazil, and Egypt show how South–South partnerships, particularly with China, can generate momentum through consumer-driven adoption, strategic industrial policy, and regional hub-building.


The challenge now is to ensure that such transfers do not reproduce new dependencies or inequities. If the global energy transition is to be both fast and fair, technology transfers must evolve from transactional exchanges to long-term collaborations that empower EMDEs.



Edited by Tatenda Dlali


Adil Ashraf writes on climate issues for Political Pandora’s Climate Department. He is a Local Government Budget Analyst in Maryland, where he contributes to budget development and performance management. He holds a Master of Public Administration from Syracuse University with a concentration in Public Policy Data Analysis.


Originally from Pakistan, Adil is deeply passionate about sustainability and equitable transitions. His experience spans fundraising for climate initiatives as well as working on sustainability projects across both the public and private sector.

 


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Keywords: Climate Technology Transfer, Global Energy Transition, China Renewable Energy, Clean Energy Investments Emerging Markets, Pakistan Solar Panels, Brazil EV Manufacturing, Egypt Renewable Energy Hub, South-South Climate Cooperation, UNFCCC Technology Transfer, International Climate Finance Gaps, Developing Countries Energy Policy, Goldwind Wind Turbines, Forced Technology Transfer China, Green Technology Adoption, Renewable Energy Inequality, Intellectual Property Barriers Climate Tech, Climate Finance, Cost of Capital, Collaborative Technology Transfer Models, Global Climate Technology Policy

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