Sectoral Approach to Emissions Reduction

Different sectoral approaches are discussed actively in various international forums. Nevertheless, their exact specification, e.g. the actual implementation to reach stabilisation of the global emission level, is often unclear. The common goal of sectoral approaches is to reduce emissions while avoiding competitiveness concerns across countries by applying the same rules for a particular sector to all countries.


One option would be that the industry in one global sector would assume a target. For example, the automobile industry agrees to implement a standard for greenhouse gas emission per person kilometre. The responsibility to implement the target would be with the automobile industry and not with the national governments. All global automobile producers would be on the same level.

Another option is that the responsibility remains with national governments but that the same rules for one sector are applied to all countries. This could be an emission standard or benchmark for a particular sector described, e.g., in grams CO2 per tonne of steel (gCO2/t steel). The commitment would be the implementation of the standard, not to reach a certain emission level and emission trading would not be possible. Such targets can also only be applied for a few sectors with defined products, such as iron and steel or cement. The difficulty for the sectoral approach is in the detail of, e.g., defining which products belongs to the sector and which do not. In addition, it has to be ensured that all sectors are covered.

A further option would be that emission targets are defined for all individual sectors as function of their respective output (e.g. t of steel, kWh produced, etc.). Although the emission targets are defined for specific sectors, they can still be reached in a flexible manner across greenhouse gases and sectors as well as through emission trading. In this case the final allowable amount of emissions depends on the respective outputs in the target year.

This last option is further developed into a global regime by the Center for Clean Air Policy (CCAP) (Schmidt et al. 2006) and is used here. The CCAP proposes that Annex I countries would continue to receive absolute emission reduction targets. Key developing countries would pledge to achieve a voluntary sector “no lose” GHG intensity target (e.g., GHG / ton of steel) in major energy and heavy industry sectors (e.g. electricity, cement, steel, oil refining, pulp/paper, metals, etc). The inclusion of the top 10 largest GHG emitting developing countries in each sector would insure coverage of 80-90 percent of developing country GHG emissions in each of the selected sectors.

This approach was modelled [by Department for Environment Food and Rural Affairs DEFRA, United Kingdom] with assumptions about the absolute reductions of Annex I countries and sectoral reductions of the major non-Annex I countries (Argentina, Brazil, China, Indonesia, India, Iran, Kazakhstan, Mexico, Saudi Arabia, South Africa, South Korea, Thailand).

This approach is modelled separately based on Höhne et al. (2006b) and not within the EVOC tool. Due to data limitations, in particular on growth rates of physical production, this approach was only modelled until 2020. Data are only available for 18 single countries, the EU 15 and the rest of the world as a whole. Therefore, the results of these calculations cannot be shown completely in the figures below but are included more detailed in Appendix D.

The DEFRA choice of parameter values is subjective but reflects a reasonable burden sharing of emission reductions among developed and developing countries. Several other options are possible. The sectoral approach is the only approach where DEFRA chose 650 ppmv configurations in a way that only Annex I has to reduce emissions by 2020. Developing countries can follow their business as usual path.





This information is extracted from: Niklas Höhne, Dian Phylipsen, Sara Moltmann, Factors underpinning future action 2007 update, Department for Environment Food and Rural Affairs, United Kingdom.

Complete report is available here