**3.1. Theoretical discussions on the functions of international and national institutions in technology diffusion**

considering India as a potential region for investment as they do not see any market in India

Interestingly, in contrast to hybrid vehicles and LEDs, the results of the case study on PV in India suggest that IPRs are not an essential barrier for the diffusion of the technology in India (Case Study 6). It maintains that mature production technology for silicon cells is available on the market without licenses since related patents have expired. Moreover, an increasing number of Indian firms are planning on producing the entire PV value chain and are expanding

The results of the case studies on IGCC and CCS indicate that technological barriers are dominant for technologies at the innovation stage (Case Study 2 and 7). Financial and institu‐ tional barriers are not relevant for the technologies at the innovation stage. As for CCS, Case Study 7 states "As CCS is not market mature and does not have any commercial examples in operation, this report cannot address CCS system transfer." As for IGCC, Case Study 2 states "It might be premature to comment on IPR issues related to IGCC, since this technology is not

Thus far, Section 2.3 discussed technology-specific barriers. Another barrier, which this paper could not address this time, are country-specific barriers. It is recognized that in order to design proper policy instruments and institutions, understanding of barriers that are specific to a certain country or region is equally important. With this regard, Case study 10 is an exception among the selected case studies in highlighting several differences between India and China as to how these two countries overcome barriers to diffuse wind power technologies. It demonstrates that "there are two key differences in the policy support mechanisms currently used in China and India; 1) China's recent reliance on local content requirements to encourage locally sourced wind turbines, which does not exist in India; and 2) India's use of a fixed tariff price for wind power, versus China's reliance on competitive bidding to set the price for most of its wind projects." In addition, it discusses key differences on corporate strategies between two Chinese and Indian wind turbine manufacturing firms. This type of comparative studies are much needed in order for us to have better understanding of barriers in the diffusion of

**3. Roles of institutions to overcome identified barriers in diffusing clear**

Section 2 presented the barriers commonly observed in the developing countries as well as the technology-specific barriers. Section 3 explores roles of institutions to overcome these barriers in diffusing clear energy technologies in Asia. Section 3.1 addresses theoretical discussions on the functions of international and national institutions in technology innovation. Section 3.2 attempts to match the barriers in technology diffusion identified in Section 2 with the functions

at present."

206 Environmental Change and Sustainability

into other areas, such as thin film technology.

considered to be commercial globally".

clean energy technologies.

**energy technologies in Asia**

of national and international institutions.

*2.3.3. Barriers for technologies at the innovation stage: IGCC and CCS*

There are theoretical explorations about the roles of institutions in changing a system in the area of innovation economics and innovation theory. For Joseph Schumpeter, who is the patron of innovation economics, an evolving institution is an important factor for economic growth. Inspired by Schumpeter, scholars in innovation theory attempt to define functions or roles of institutions in changing a system. Borrás, for example, defines that they are 1) competencebuilding and generation of incentives including production of knowledge, diffusion of knowledge, financial innovation, alignment of actors, guidance of innovators; 2) generation of incentives and reduction of uncertainty including appropriation of knowledge, reduction of technological diversity; and 3) establishment of limits and reduction of uncertainty including reduction of risk and control of knowledge usage (Borrás 2004). Another example is a study by Suurs and Hekkert. According to Suurs and Hekkert, there are seven functions of institu‐ tions including 1) entrepreneurial activities; 2) knowledge development; 3) knowledge diffusion; 4) guidance of the search; 5) market formation; 6) resource mobilization; and 7) legitimization (Suurs and Hekkert 2009).

There are also research initiatives that attempt to understand the roles of institutions in diffusing clean energy technologies both at the national and international level, although the focus of research is geared toward the national level rather than the international level. At the international level, a study conducted by de Coninck et al. is an example of such research (de Coninck et al. 2008). This study classifies technology-oriented agreements (TOAs) addressing climate change into four broad categories including 1) knowledge sharing and coordination; 2) research, development and demonstration (RD&D); 3) technology transfer; and 4) technol‐ ogy deployment mandates, standards, and incentives (de Coninck et al. 2008). According to a more recent study by Benioff et al., there are three roles of international institutions for innovation and transfer of clean energy technologies including research, development, and demonstration (RD&D) cooperation, enhancement of enabling environment, and financing facilitation and support (Benioff et al. 2010).

It is important to note here that the roles of institutions differ along the technological devel‐ opment of clean energy technologies. At the early stages of technological development, institutional support for the empowerment of research groups is needed to demonstrate and deploy technologies (Suzuki 2012). As the case studies on CCS and IGCC indicated in Section 2, the technologies at the innovation stage require strong R&D efforts to remove technological barriers in order to move forward to the next stage. At the innovation stage, the empowerment of network between international and local research groups is needed to enhance the R&D efforts, especially with a stronger initiative from the public side (Benioff et al. 2010; Morey et al. 2011; UNFCCC 2009).

At the advanced stages of technological development, institutional support as well as policy arrangement for the involvement of the actors in the private sector such as project developers, equity investors, manufactures, and commercial banks is essential in technology diffusion (GtripleC 2010; Carmody et al. 2007). Providing economic incentives for the private sector are an important measure to improve investment conditions and encourage its participations. Therefore, clean energy and carbon finance vehicles may be also effective to introduce technologies at the advanced stage. For example, the economic policy instruments such as CDM may take an instrumental role. If they are designed well, the schemes under discussion for the post-Kyoto regime such as the bilateral carbon crediting mechanism and the sectoral or program-based crediting mechanism can be also a good policy candidate for technology diffusion. At the national level, an introduction of a feed-in-tariff program has received greater attentions among the developing countries, while other economic instruments such as subsidy, emissions trading, and renewable energy certificate scheme can be also recognized as possible policy options. The investment schemes such as co-investments and loans or risk guarantees may help to reduce risk associated with investment from the private sector (Suzuki 2012). In addition, such an arrangement for building a partnership between the private and the public (Public-Private Partnership: PPP) may leverage the interests of the private sector in developing technologies that would not be attracted to clean energy technologies otherwise.
