Promoting the Transfer and Development of Climate-Smart Energy Technologies in Uganda

This paper examines the potential of transferring climate smart energy technologies to Uganda. With increasing awareness of climate change, civil society groups with environmental agendas have not only proliferated, but also grown more active, outspoken, and visible in recent years. This element of social psychology is a reason why efforts to embrace climate smart energy technologies could have positive effects. Definitely, promoting the transfer and development of those technologies improves the energy efficiency and reduces the environmental deterioration. Also, it is clear that countries, individually and collectively, can liberalize and promote trade and investment in Climate Smart energy technologies. Previous studies argue that climate change will trigger changes in comparative advantages that lead to potentially new but long-term trade and investment opportunities. Traditionally, the developed countries of the West were the main exporters of climate- smart energy technologies but there has been some convergence between developed and developing countries in recent years, with the emergence of China as a major exporter of climate-smart energy technologies. The importance of rapid diffusion of efficient and clean technologies as a means to furthering sustainable development and climate resilient growth in developing countries can hardly be overstated. Through shifting towards climate smart energy technologies, Uganda can develop with less pollution and greenhouse gas emissions. With growing global concerns about the impact of climate change, studies have been carried out focusing on an important subgroup of environmentally sustainable goods and services, that is to say, climate-smart goods and technologies. In Uganda, most of those studies, however, approach the climate change from the technical point of view towards mitigating climate change impacts. In addition, there has been a research gap with regard to examining Uganda’s trade of climate smart energy technologies which contribute to mitigating climate change. This paper, therefore, investigates the transfer potential of climate smart energy technologies to Uganda to answer the main question “How can climate smart energy technology transfer be fostered to a developing country like Uganda at affordable prices without undermining entrepreneurship and investor confidence, and consequently, innovation and economic welfare?”. In particular, the study employs a gravity model with panel data for bilateral trade between Uganda and ninety six partners from the year two thousand seven to the year two thousand sixteen with an objective of identifying the determinants explaining Uganda’s trade in climate smart energy technologies. The estimation results reveal that economic size of the trading partners, labour force of the trading partners, real effective exchange rate between Uganda and her trading partners, and the quality of infrastructure of both Uganda and her trading partners play a major role in bilateral trade of climate smart energy technologies. Additionally, the paper applies the method using speed of convergence and the estimated gravity equation to answer whether Uganda has fully realized the potential trade of climate smart energy technologies. Accordingly, Uganda has strong opportunity for trade expansion with 89 out of 96 countries in the scope of this paper.