Global Sectoral Agreements – A Successful Climate Protection Policy of the Future Needs to Integrate Developing and Emerging Countries

At the World Climate Conference in Poznan, Poland, states entered in negotiations towards a successor agreement to the Kyoto Protocol for the time after 2012. However, a solo run by the developed countries is not enough for achieving a successful climate protection policy. The most important developing and newly industrialized countries will have to agree to ambitious climate protection obligations in the future. "To convince these countries of climate protection, the concept of global sectoral agreements seems to be an appropriate measure", explains Dr. Andreas Löschel, head of the research department "Environmental and Resource Economics, Environmental Management" at the Centre for European Economic Research (ZEW) in Mannheim.

Approaches of this kind are currently developed by a number of energy-intensive industrial sectors and are meant to lead towards ambitious sectoral climate protection obligations, consisting of measures to improve emissions and energy efficiency. This means that special sectors within the developed countries make agreements with the respective sectors in the emerging countries aiming to reduce greenhouse gas emissions. The member states of the United Nations’ World Climate Conference could support the achievement of such agreements and the implantation into existent national emissions regulations. The Poznan Conference shows how different the opinions in the several member states are. Defining the goals, the extent and the selection of sectors are only a few aspects of the configuration of global sectoral agreements, on which the states cannot agree upon at the moment.

The European Commission favours so-called “soft” goals (no-lose mechanism) for specific energy-intensive sectors, where the developing countries would not be sanctioned in case of not achieving these goals. Energy savings exceeding the agreed goals could be offered at the European emission market. By this, the introduction of sectoral agreements into the EU Emissions Trading System (EU ETS) would be ensured.

The participation of developing and emerging countries in sectoral agreements allows European firms achieving their emissions reduction goals with more efficiency, as well as improving their competitiveness on international markets. Based on a numerical general equilibrium model of the global economy, the Centre for European Economic Research (ZEW) quantifies ecologic and economic impacts of the introduction of sectoral agreements in the cement industry. Especially abatement costs and potentials in China, Brazil and Mexico are considered.

“With a participation of the developing and emerging countries, greenhouse gas emissions could be reduced better than it is the case with the unilateral EU climate policy”, says Löschel. To convince these countries of participating, there have to be serious incentives, such as the transfer of technological knowledge. Even if, concerning costs efficiency, sectoral agreements are only the second choice: “Under given circumstances, they can be met politically and therefore constitute a realistic step towards ambitious and economically feasible global climate protection agreements”, summarizes Löschel his assessment regarding this rather new approach in international climate policy. 

For further information please contact

Dr. Victoria Alexeeva-Talebi, E-mail: alexeeva-talebi@zew.de