Since the Industrial Revolution, developed countries' economies have been growing thanks to innovative technologies. In order to sustain industrial activities, large amounts of energy are needed. Due to industry and the combustion of fossil fuels, anthropogenic greenhouse gas emissions have increased at a high speed and have been building up in the atmosphere, leading to the concern that global temperature might increase with 1 to 5C. In order to mitigate these greenhouse gas emissions, there is a need for environmentally sound technologies. Developing countries however depend on the imports of technologies by developed countries as they lack the capital and the talent to perform R&D activities by themselves. Unfortunately, environmentally sound technologies are not being transferred as fast as other technologies, especially to developing countries. The problem of greenhouse gas emissions causing climate change and the lack of technology transfer to mitigate greenhouse gas emissions was also clear to policy-makers. In order to enhance the development and transfer of environmentally sound technologies to developing countries, the Technology Mechanism was established during the sixteenth session of the Conference of the Parties under the United Nations Framework Convention on Climate Change. There are however some important unresolved issues left that need to be given an answer to in order to make the Technology Mechanism operational with the purpose of enhancing the development and transfer of Environmentally Sound Technologies.