Explaining Differences in Sub-National Patterns of Clean Technology Transfer to China and India∗

The Kyoto Protocol’s Clean Development Mechanism (CDM) is capable of incentivizing the international transfer of environmentally sound technologies. Given that both countries are expected to have similar incentives when managing the distribution of technology transfer within the country, why does the sub-national patterns in allocation of projects with technology transfer differ across the two countries? Using comparable political-economic data compiled for China and India, we offer an explanation for these differences. In China, where the government regards the CDM as a tool for achieving sustainable development, technology transfer is concentrated in provinces that need it the most and are most conducive to receiving transfers (i.e., economically less developed, yet heavily industrialized provinces). In India, where the government takes on a “laissez faire” approach to the CDM, neither level of economic development nor that of industrialization affects clean technology transfer. In this regard, although the incentives are similar, the capacity to pursue them are not comparable. We test these hypotheses using data on CDM technology transfer across Chinese provinces and Indian states during a six-year period from 2004 to 2010. ∗This article was written during a research stay funded by an ERP fellowship of the Studienstiftung des deutschen Volkes. Patrick Bayer gratefully acknowledges this generous funding and is thankful for the hospitality of Columbia University. He is also thankful for a postdoctoral fellowship at Washington University in St. Louis from the German Academic Exchange Service (DAAD). We thank Valerie Pinkerton and Sung Eun Kim for comments on a previous draft. †Corresponding author. Department of Political Science. Washington University in St. Louis, One Brookings Drive, St. Louis, MO 63130, USA. Email: [email protected].