A new report explores how National Systems of Innovation (NSI) play a central role in countries’ effort to boost innovative technologies. These can be crucial instruments that nations can deploy to tackle the accelerating climate emergency while boosting sustainable development.

The report, titled ‘Good practices and lessons learned on the setup and implementation of National Systems of Innovation’, by the UNFCCC Technology Executive Committee (TEC) covers technologies ranging from alternative fuels to artificial intelligence and from bioplastics to e-mobility.

“The Paris Agreement is clear on the critical role of accelerating, encouraging and enabling innovation for an effective long-term global response to climate change and promoting economic growth and sustainable development,” said the Chair of the UNFCCC Technology Executive Committee, Stig Svenningsen. “The latest report of the UN’s Intergovernmental Panel on Climate Change also emphasises the importance of a systemic view of innovation,” he added.

Insights and inspiring examples of action for policymakers

The report’s main recommendation is that setting up NSIs is best done through a systemic approach that relies on a functional analysis of the respective innovation system.

Seven functions are identified that need to perform well for an innovation system to operate effectively: knowledge development, entrepreneurial experimentation, market formation, influence on the direction of the search, resource mobilization, legitimation, and development of positive externalities.

The following examples of innovation at the country level were showcased at the Bonn Climate Change Conference in June:

• Brazil has successfully deployed bioethanol and wind energy to fight climate change and is conducting important work in the areas of bioplastics, bio jet fuel, and biofuel cells. Brazil has been using the power of competition between energy sources to drive technological development and decarbonization, with government agencies, educational and training institutions and financing bodies bolstering effective industrial science and technology policies.
   
• Kenya also has experience with ethanol adoption as a kerosene replacement. The removal of an excise duty on ethanol, after dialogues with government and development agency players, led to a surge in businesses adopting the model and selling ethanol in supermarkets. Kenya has also introduced legislation to ensure that bioethanol is altered so that it cannot be misused as a harmful beverage.
   
• Chile has implemented a technology transfer strategy by mapping out actors and information flows. This includes carefully prioritizing mitigation and adaptation efforts in climate change policy and treating them as distinct areas.
   
• China has made significant progress on innovation, with research and development investments amounting to 2.55 percent of GDP in the previous year and rapid advancements in global innovation rankings. China recognizes the need for continuous improvement, particularly in basic research. It also makes use of international collaboration, including bilateral and multilateral cooperation. Ongoing initiatives include South-South cooperation, which a focus on young scientist exchanges and joint lab research.
   
• Jamaica’s national designated entity carries out stakeholder mapping which encompasses diverse sectors, like private business, academia, and civil society. This demonstrates the importance of involving all actors throughout the process. The country is seeking support via innovative and flexible funding schemes and proposes to make use of modern technology such as artificial intelligence and blockchain technology in improving monitoring and verification systems under the Enhanced Transparency Framework.
   
• Germany aims to achieve climate neutrality by 2045, relying heavily on policy and coordination for transformational changes at national and sub-national levels. This requires the rapid deployment of innovative technologies in a systemic approach within strong enabling environments. The TEC report is seen as an inspiration for nations to shape their innovation systems towards solutions such as e-mobility, heat pumps in buildings, and linking renewable energy sources with zero-carbon technologies in the steel and cement sectors.