Compensating developing countries for use of environmentally sound technologies
Context: In some cases, developing countries have demanded compensation from developed countries for the difference in investment costs between environmentally sounder technology and the existing alternative in use.
Counter Claim: In the long run, this is not a desirable procedure, since it exacts an opportunity cost in terms of resources available in the developed countries for development aid. The long-run objective should rather be to phase out such special deals because, although they may be represented as add-ons in, the short-term, they will inevitably eat into development aid in the long-term, and they may retard the build-up of endogenous innovation capacity in respect of the technologies involved.
Subjects: Technology Environment
Type Classification: E: Emanations of other strategies