ECOPLAN 1 Climate-Policy Induced Technology Exports – Potential and Risk Technology Transfer and Investment Risk in International Emissions Trading Summary and policy recommendations Brussels, 30 November 2006 Dr. Urs Springer, Ecoplan (Switzerland)

ECOPLAN 2 Linkage  Norway and Switzerland: Linkage likely and feasible  Great challenges for linkage to schemes in North America and Japan  No global uniform carbon market in the near future. Better prospects in the long term  Development of emissions trading schemes: –Coordinate development and harmonize key elements –Limit number of policy instruments Summary and policy recommendations

ECOPLAN 3 CDM and technology transfer  Kyoto mechanisms encourage technology transfer to developing countries  Europe is a major supplier of key technologies for a low-carbon future  Improve institutional framework for the flexible mechanisms (CDM EB, sectoral baselines, etc.)  Provide investment certainty beyond 2012 Summary and policy recommendations

ECOPLAN 4 Permit supply from JI/CDM and investment risks  Joint Implementation: –Actual potential overstated by bottom-up studies –Best conditions: New Zealand, Scandinavia. –Eastern Europe: Large potential, but higher risks  Clean Development Mechanism: –Best conditions: Asia and South America (India and China in Top 5) –Large potential (64% in China and India), negative cost options  Investments in GHG abatement follow different pattern than FDI  Substantial transaction costs and other investment barriers  Capacity building worth while even in countries with relatively bad general investment conditions Summary and policy recommendations

ECOPLAN 5 Global GHG market  Low carbon price based on technological potential of JI & CDM  Higher price with strict additionality (no negative cost options)  Transaction costs and risk do not reduce investment substantially, but alter flow of investment and project mix  Restrictions on hot air required for functioning carbon market  Kyoto mechanisms foster technology transfer and reduce compliance costs  Limit (and harmonize?) ceilings on use of flexible mechanisms Summary and policy recommendations

ECOPLAN 6