Carmen Bunzl - Universidad Pontificia Comillas

Chapter 5. Conclusions 244
The rise of sectoral approaches can be traced to concerns over competitiveness
and leakage. There is concern that regional carbon constraints will unfairly
disadvantage those regulated and therefore decrease their international market
share and hence profitability. Closely linked is the possible movement of new
investments to countries not covered with binding carbon constraints.
Another key driver is the recognition that sector specific approaches may be
an effective means to encourage mitigation action in developing and major emitting
developing countries ahead of any binding national commitments. For
developing countries, the sector approach offers an opportunity to accelerate
the adoption of technology while also providing access to financing. For the
developed world there are a couple of motivators. First, access to lower cost
reductions within sectors can obviously reduce mitigation costs; but more
importantly perhaps is the ability to seek to minimize competitiveness impacts.
Indeed, the sector-specific approaches may be a way to get real movement on
reductions from major emitting developing countries well in advance of any
binding mitigation commitments.
However, sectoral approaches contain several potential drawbacks — most
notably, the difficulty with which such agreements are negotiated and
administered, lack of cost-effectiveness, potentially high levels of government
regulation, and the potential for politically powerful industries to carve out favorable
deals.
Sectors where this approach might work include most emissions- and energy-
intensive industries. These include electric power, refining, pulp and paper,
metals and cement. Sector benchmarks may also be a good way of
incorporating international transport emissions (airlines, shipping) into the future
climate change architecture. In some sectors, problems may arise from data
limitations, or potential unwillingness of companies and countries to share
data; sector benchmarks may not be possible everywhere.
Escuela Técnica Superior de Ingeniería ICAI Carmen Bunzl Boulet Junio 2008