Starting to Read from the Same Book on Sectoral Approaches for Developing Countries

There have been a number of approaches proposed over the years for the efforts of major developing countries, see here (pg. 5) and here for examples, in the post-2012 international effort to address global warming pollution.  One approach which has been consistently on the lips of climate negotiators (and gained interest in informal conversations)—sectoral approach for developing countries—now has countries sounding like they are reading from the same book.  It still is suffering from some “translation” issues, but the general story is starting to sound similar.  (This will be one of my longer comments as there is a lot of detail…very interesting public movements in Ghana). 

Sectoral approaches now have come into the formal negotiations and the response from both developing and developed countries was positive (albeit still cautious at this early stage in the negotiations).  At the current negotiation session in Ghana countries put forward specific perspectives on sectoral approaches.   

In a very basic sense, the idea behind sectoral approaches is that between 2012 and the medium-term (e.g., 2020/2025), developing countries would undertake emissions reductions in key sectors of their economy.

There are three basic options circulating in the minds of negotiators. 

  • Sectoral “bottom-up”.  Developing countries undertake emissions reductions based upon assessment of what they can achieve using “bottom-up” assessments, such as the cost of reduction, state of existing technology, and pace that changes can be made (e.g., see here).
  • Transnational.  The main idea is that each sector in developing countries would have to meet the same level of target as that sector achieves in developed countries (e.g., see here).
  • Sectoral Crediting Mechanism.  Proposes to evolve the existing mechanism for providing carbon incentives to developing countries—the Clean Development Mechanism—to only allow countries to generate emissions reduction credits if the sector as a whole reduces emissions below some level (e.g., here).

While lots of sectors get thrown into the mix, the main conversation on sectoral approaches is around the: electricity and industry sectors (especially energy-intensive and internationally traded commodities such as cement and iron & steel).  (Some people talk about aviation and marine emissions in this context—so called “bunker fuels”—but those deserve their own book or different chapter so I don’t discuss them more here). 

So what did countries say about these sectoral concepts?  Here is my read on their perspectives (you’ll have to give me some liberty as some of what countries say is in “code”, but I’m using my past experience in talking with them on sectoral approaches to “interpret”).  Here are the key points (click on the link if you want to watch their presentation for yourself):

ChinaChina raised some issues on the specific designs of sectoral approaches, but laid out a specific framework for such an approach.  Does putting forward a specific idea on how sectoral approaches could be designed imply their endorsement?  No, but it sure sends a strong signal that they are willing to constructively engage in how best to design the approach—leaving the book open to further fill in the pages.   

Here is what they outlined (their specific wording in italics and my comments in parenthesis):

  • Develop strategies, guidance, and programmes for sectors (outline what actions you as a country could undertake) and formulate and enforce enabling policy instruments (develop and enforce some national laws which enable the deployment of key technologies).
  • Identify major needs for Environmental Sound Technologies (ESTs), capacity building, infrastructure conditions, and financial resources (outline what international support is crucial in undertaking some portion of the emissions reductions in these sectors).
  • Finance capacity building, development and transfer of ESTs, and restructuring sectors, and implement development and transfer of ESTs (develop a framework to finance and support deployment of key technologies).

They highlighted a couple of design points that are worth keeping in mind as the negotiations unfold.  In particular, they stressed that sectoral approaches should:

  • Include efforts to improve monitoring and reporting of emissions;
  • Not be based on establishing the same standard across the world—in both developed and developing countries.  Rather the approach should take account of national circumstances (e.g., current state of technology in the country) and the development stage of countries (e.g., there are development reasons that justify a differentiation between developed and developing countries).  This is a direct reference to what some have pushed as a transnational approach.
  • Include incentives and technology assistance, including support to help train people to use the advanced technologies and to enforce domestic laws at the provincial/local level.

India.  India has been publicly more skeptical of sectoral approaches in the discussions, largely concerned about their use as tool to address competitiveness concerns in developed countries (they argue that isn’t an issue for the climate negotiations) and out of concern that they would be used as a barrier to international trade.  The Indian discussion was filled with what they see as the technical problems with such an approach, but at the end they didn’t close the book on sectoral approaches and in fact identified the title of a potential chapter—“National (non-binding) Energy Efficiency Programmes”.  Is there an opening for these national programs to be based upon sectoral actions in domestic law?  The door isn’t closed. 

Japan.   Unclarity (and sometimes confusion) from Japan on their vision of sectoral approaches has made developing countries nervous about the intention of developed countries around these approaches.  In their remarks in Ghana they backed away (“clarified”) the poison pills in their previous statements.  In particular they hit the delete button on their proposal that these sectoral targets would replace economy-wide limits in developed countries (they reiterated that these approaches do “not replace national emissions reduction targets”) and the same target would be expected of developed and developing countries (they would not “apply a single common standard to all countries”).  These clear statements can help to alleviate concerns amongst some developing countries about the side motives for the Japanese push on sectoral approaches.

European Union.  The EU suggested that this was an approach that was very attractive, especially based around major industrial sectors and electricity.  They discussed some specific ideas for how such an approach could be written, with a combination of carbon markets and incentives for technologies as key elements. 

South Korea.  South Korea emphasized the role of the carbon markets in providing incentives for developing country sectoral actions by proposing that countries that take sectoral targets in the future could sell carbon credits into the global carbon market.  A nuance of what others had proposed by suggesting that carbon credits—and not technology incentives—would be the principle source of incentives to encourage greater action in developing countries.

Mexico and Indonesia.  Mexico continued to stress their support for including sectoral approaches in the post-2012 agreement and Indonesia explicitly said that they see an attraction in undertaking sectoral approaches.  Indonesia has been intrigued in the past, but hasn’t publicly showed their interest.  

More clarity (and progress) needs to occur on these approaches at the next negotiation session in Posnan, Poland (in December 2008) in order to have the core chapters of the Copenhagen agreement starting to be written.  Maybe on one of the critical issues raised by a number of countries--who will pay, who will provide technology, and by what means (e.g., carbon markets and other means)—can take some more shape in Posnan and move this approach forward.

We don’t have a full book yet written on developing country actions to address global warming, but the sentences are starting to be filled in and it has some semblance of a coherent story.  One of the titles is starting to look something like—Sectoral Approaches (note to any editors out there I would be happy for suggestions on a “sexier” title).  Not likely to be a best seller on the New York Times Book Review, but shaping up to be a best seller in the important international efforts to address global warming.

About the Authors

Jake Schmidt

Managing Director, International program

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