From demonstration to diffusion: the gap in Japan's environmental technology cooperation with China

A programme for cleaner coal technology (CCT) cooperation with China under Japan's Green Aid Plan (GAP) has the stated goal of promoting CCT diffusion through demonstration projects. The alignment of interests among Japanese and Chinese government officials and Japanese technology providers has facilitated demonstration projects of Japanese CCT, but it has not led to diffusion of the technologies to other Chinese enterprises. The selection of Japanese CCT to transfer was based largely on analysis of technical feasibility and Chinese government policies, not on economic assessment of diffusion potential among Chinese industrial enterprises. With its emphasis on demonstration project construction, the GAP CCT program gave limited attention to operation and maintenance, a subject of paramount importance to potential CCT adopters. In addition, GAP contained relatively few mechanisms explicitly focused on promoting technology diffusion. The paper notes recent changes in program design and suggests additional changes that could promote GAP technology diffusion in China.