Slicing the Pie: Sector-based Approaches to International Climate Agreements

The concept of sector-based climate agreements has become a staple of climate policy discussions in recent years. Faced with the technical, economic, and political complexities involving various sectors, industries, and developing countries, it’s appealing to use separate approaches in separate fora. Advocates of sector agreements argue that they could a) simplify negotiations, b) reduce international competitiveness concerns, and c) increase effectiveness through increased participation and reduced leakage.

Can sectoral agreements help us do all this? It’s hard to say–given that there are almost as many definitions of the term “sector” as there are advocates. Some sectors may be more conducive to this sort of international cooperation than others. As well, there are a variety of ways to incorporate sectoral considerations into an international climate policy framework.

This paper examines the form that sectoral commitments might take, analyzes which sectors are best suited to sectoral approaches to climate mitigation, and evaluates several different models for how sectoral agreements might be integrated into the broader climate regime. Finally, it concludes that sectoral approaches should be more specifically defined and should be used with caution.

Sectoral approaches will always remain a second-best solution to a comprehensive climate policy. But with so much at stake no options should be left off the table. Sectoral approaches could be used to complement, but not to supplant, a global climate arrangement.