This report explores an approach to climate change policy called Sustainable Development Policies and Measures, or SD-PAMs. SD-PAMs are policies and measures that are aimed at meeting the domestic objectives of the host country, but that also bring significant benefits to the climate through reduced GHG emissions. This concept offers a potentially less divisive approach to engagement between developed and developing countries in tackling dangerous climate change.
International climate change policy is based on the United Nations Framework Convention on Climate Change (UNFCCC), which emphasizes both the need to avoid dangerous climate change and the special challenges faced by developing countries. This raises a potential conflict: on one hand, meeting the objective of the UNFCCC of preventing dangerous climate change is impossible without limiting emissions in at least some major developing countries. On the other, these countries face vital and urgent priorities that inevitably trump considerations related to greenhouse gas emissions: the need to reduce poverty, extend the provision of modern energy services, meet citizens’ growing demand for mobility, and many others. How can these two vital sets of priorities be reconciled?
While the concept of combining domestic and climate priorities is firmly embedded in the UNFCCC itself, existing climate agreements have not attempted to systematically foster the integration of climate change and development at the policy level. This report is an attempt to explore some ways in which this might be done, as well as provide some illustrative examples of the types of policies and measures that might fall under the SD-PAMs rubric and some of the advantages and limitations of this approach.
What are SD-PAMs?
SD-PAMs are defined broadly in this report as policies and measures taken by a country in pursuit of its domestic policy objectives—energy security, provision of electricity, improved urban transportation, for example—but which are shaped so as to take a lower-emission path to those objectives. These may be wholly domestic in nature, or involve support or other interaction from other countries or international institutions. By describing these SD-PAMs, this report seeks to open the possibility of including them in an international agreement, thus engaging developing countries more directly in climate change policy while promoting their development.
Why include SD-PAMs within an international climate agreement?
From the point of view of climate protection, the potential benefit of including SD-PAMs is obvious: important developing countries that are not yet ready to take specific measures aimed at reducing emissions can be helped to place their development on a significantly lower-carbon pathway.
From the point of view of developing countries the use of SD-PAMs brings several potential advantages:
Recognition. Many developing countries have implemented policies and measures that bring significant emission reductions, which if implemented in industrialized countries would be labeled as climate policy. Yet it is often claimed by some industrialized countries that developing countries are not contributing anything towards the fight against climate change. SD-PAMs offer the opportunity to dispel that impression, and codify contributions of different countries.
Learning. By formally sharing and examining each others’ policies and measures there is considerable scope for exchanging best practice and other information.
Engagement. Rather than advocating a new set of priorities for developing countries, SD-PAMs engage precisely on the issues that these countries consider most pressing. This allows the leveraging of investment and policy efforts made in these core development areas, rather than trying to carve out a separate effort for climate protection.
Promotion. The potential to promote both development and climate goals in a way that reduces their total cost is a powerful incentive to both host and donor countries to support appropriate SD-PAMs. The fact that these SD-PAMs are not exclusively “additional” emission reduction measures also opens up a wider range of sources for support.
How might they be paid for?
SD-PAMs of the scale needed to change emissions and development trajectories will require higher levels of funding than have hitherto been available for mitigation in developing countries. Existing mechanisms based on explicit “climate” funding are assessed and found inadequate (Chapter 1). Accordingly, the real challenge is to instill climate benefits and risks into the broader set of international capital flows, only some of which are climate-specific.
Along these lines, it is suggested that SD-PAM funding should be able to come from any source: bilateral aid agencies, the Global Environment Facility, multilateral development banks, export credit agencies, the private sector, the host government (federal and perhaps state/ local), state and local communities, or others. The aspiration of the SD-PAMs approach is that by targeting actions of clear mutual benefit, larger financial flows will be freed up than would otherwise have been the case. This remains a complex issue however, and one that requires further exploration.
How might SD-PAMs be incorporated in an agreement?
The report presents a pledge-based approach to implementing SD-PAMs. These pledges are voluntary, and may take several forms, as outlined in Chapter 2:
First, a single country might pledge one or more SDPAM that is unique to its national circumstances and not directly related to the pledges of other countries.
Two or more countries may make mutual pledges, perhaps consisting of simultaneous pledges by both a developing and developed country. This might involve a developed country pledging support for a developing country’s activities. This has the additional attraction of engaging donor countries on SD-PAMs in which they have a mutual interest, such as for the development of a particular technology or sector.
A group of countries could make harmonized pledges n an SD-PAMs negotiation process. This approach acknowledges the global nature of many industrial activities,and opens the door to multiple countries agreeing to the same kind of measures to promote or maintain an “even playing field” for competitive industries.
Accounting for SD-PAMs
Methods for defining SD-PAMs, establishing a registry, reporting and reviewing are examined in Chapter 2. Consideration is also given to whether and how emission reductions from SD-PAMs might be “credited.” The premise of SD-PAMs, however, is distinct from project mechanisms such as the Clean Development Mechanism(CDM) in that an SD-PAM will not need to demonstrate that it was undertaken for climate protection reasons. This is a major advantage of the approach, but also means that it is unlikely to practicable to allocate credits for emission reductions achieved in the manner of a CDM approach.
Being able to reasonably assess, in quantitative terms, the contributions different countries make to the collective global effort to protect the climate would provide useful input and information to negotiations that will likely stretch over multiple decades. However, it is important to note that an SD-PAM is a commitment to implement a policy or measure, not on a specific outcome expressed in terms of emissions. Additional work is needed at the sector and policy levels to develop reasonably simple and transparent methodologies to quantitatively capture the GHG benefits of SD-PAMs.
Country studies
This report presents four country studies that examine the types of policies and measures that might be framed as SD-PAMs (Chapters 3-6). The authors of these studies are in-country experts, but the aim of presenting them here is both to investigate the potential SD-PAMs themselves and to draw some more general conclusions about the SDPAMs model. The order in which they are presented is in some sense a descending scale of how compelling the cases are for an SD-PAMs approach. Seen another way, they are an indication of how much outside assistance would likely be needed to make them work.
