Intellectual property rights protection and the international transfer of low-carbon technologies through trade and foreign direct investments - Working Paper 17-CER-05

We examine the effect of Intellectual property rights (IPR) protection on the two main channels of international transfer of low-carbon technologies i.e. trade in low-carbon capital goods, and foreign direct investments (FDI) by firms producing low-carbon technologies. Our data describes cross-country transfer through these channels between developing and developed countries in eight climate-related technology fields from 2006 to 2015. At the world level, we find that strengthening IPR protection increases transfer in six technology fields (solar PV, solar thermal, wind power, heating, lighting, and cleaner vehicles), while the effect is statistically insignificant in the others. However, when focusing on non-OECD countries, we find that a stricter IPR does not influence trade in low-carbon capital goods but is a significant determinant of inward FDI for most low-carbon technologies. These results have important implications for climate negotiations on North-South technology transfer. (authors)