Global sectoral industry approaches to climate change: the way forward

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The structure of some industrial sectors is so highly concentrated that just a handful of companies are responsible for producing a significant share of that sector’s total greenhouse gases emissions worldwide. These sectors are thus a ‘natural’ focus of policy-makers concerned with climate change and have attracted keen interest from the EU. So-called ‘sectoral approaches’ are seen as having the potential to broaden the range of contributions by all parties, including emerging economies, to greenhouse gas emissions reductions, and to help moderate competitiveness concerns in trade-exposed industries. In particular, such approaches may help to quantify emissions on a sector-by-sector basis, building confidence that policies and measures can be put in place to reduce emissions. They can also help identify national or global commitments through the aggregation of sectoral data. While sectoral approaches allow policy-makers to concentrate on those individual sectors that contribute significantly to global emissions, they also pose a number of challenges. This CEPS Task Force Report identifies the principal issues associated with sectoral approaches – their rationale and the associated political dynamics – and gives an overview of existing approaches, the formulation of preconditions that would allow sectoral approaches to be implemented and an analysis of the potential interaction of sectoral approaches with existing climate change policies. The concluding chapter sketches a possible way forward.