China's functioning market for sulfur dioxide scrubbing technologies.

Countries' differing positions in technology transfer have been a barrier in climate negotiations. Developed countries want market-based solutions with effective protection of intellectual property rights, whereas developing countries look for external support and nonmarket solutions. Although China has shared common negotiation positions with other developing countries, it has actually relied heavily on markets to acquire foreign technologies. This paper systematically examines the case of sulfur dioxide (SO(2)) scrubbing technologies, with first-hand information from the author's field interviews, to explain why such a functioning market for technology could emerge in China. Existing studies focus mainly on technology suppliers or licensors and this paper adds to the understanding of consumers or licensees. Two factors should have made major contributions to the market's emergence: (i) the huge size of the Chinese market of SO(2) scrubbers, and (ii) the knowhow and maturity of the technologies. Market-based solutions of technology transfer might help large developing countries like China and India to efficiently acquire mature environmental technologies and satisfy their rapid development.