Chapter 15 The clean development mechanism and technology transfer to China

Purpose The purpose of this study is to analyse the role of the clean development mechanism (CDM) established by the Kyoto Protocol in channelling foreign technology to China. Appraising the experience of CDM remains of key importance when drawing lessons for the post-2012 climate regime. Methodology/approach Descriptive analysis of the sources and the determinants of foreign technology transfer based on the examination of 1,355 registered projects. Econometric analysis of the probability of having a foreign supplier of technology in any project. Findings The prominence of German firms as technology providers and the absence of a strong relationship between technology suppliers and credit buyers. The econometric analysis finds that project size and cost, project location, credit buyers’ and consultants’ characteristics, as well as technology diffusion are all relevant factors in determining the probability of having a foreign supplier of technology. Research implications China is a particularly interesting case for analysing technology transfer in CDM projects since, after a slow start, the country has become the largest and most dynamic CDM recipient worldwide. Furthermore, the analysis of CDM projects may offer some insights into the complex web of technological links between Chinese and foreign firms. Practical implications The transfer of emission-saving technologies to developing countries is expected to play a major role in addressing environmental problems worldwide. Originality/value This study analyses the sources and determinants of international technology transfer in CDM projects in China, and offers some insights into how the characteristics of the major players and the links between them affect this phenomenon.