Transcript Sectoral approaches SLT 2007

Climate Mitigation:
Integrating Approaches for
Future International Co-operation
Cédric Philibert
Energy efficiency and environment division
ECN side-event
Bali, 7 December 2007
INTERNATIONAL ENERGY AGENCY
AGENCE INTERNATIONALE DE L’ENERGIE
www.iea.org/Textbase/publications/free_new_Desc.asp?PUBS_ID=2000
www.iea.org, “by topic”, then “climate change”, “publications and papers”
Richard Baron,
with Julia Reinaud, Matt
INTERNATIONAL ENERGY AGENCY
AGENCE INTERNATIONALE DE L’ENERGIE
Content of the IEA paper
 Competitiveness and climate policy
 What could sectoral approaches consist of?
 Governance issues

Integration in UNFCCC
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
Negotiating domestic policy
Reliance on international flexibility (carbon trading)
Role of industry federations
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Legal status in any international accord?
Risks of anti-competitive behaviour
 Industry case studies (cement, steel, aluminium)

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International market dynamics and challenges
Industry’s efforts to date to curb GHG emissions
 More at the…
IEA side-event, GH, Monday 11, 6 pm
INTERNATIONAL ENERGY AGENCY
AGENCE INTERNATIONALE DE L’ENERGIE
Drawing on three 2005 AIXG papers:
 Approaches for future international
cooperation
 New commitment options:
compatibility with emissions
trading
 Integrating approaches for future
international cooperation
 www.iea.org ; www.oecd.org
Annex I Expert Group
on the UNFCCC
New commitment options:
compatibility with emissions tradidng

Dynamic, non-binding and sectoral targets, and
price caps, all compatible with emissions trading,
with each other and with fixed binding targets


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In any case governments must be liable in case of
overselling
Other options show mixed compatibility with
emissions trading and/or with other target types
Intensity targets only partially alleviate
uncertainty from economic growth
Annex I Expert Group
Dynamic
Price cap
Non-binding
Sectoral
Action
Allowances
Endowments
Long term
International
Other types
Domestic
Domestic to
international
Yes
Yes
Yes
Yes
?
No
?
Yes
Yes
Yes
Yes
?
No
No
Yes
Yes
Yes
Yes
Yes
Yes
?
Yes
Yes
Yes
Yes
?
No
?
Annex I Expert Group
A key question for future
negotiations
 Can we integrate technology
approaches and cap and trade
approaches into a future regime?
Annex I Expert Group
on the UNFCCC
Objectives
 Define integration
 Consider reasons for integration
 Investigate comparisons of approaches
e.g. a technology approach and a cap-andtrade approach
 Comparing results / Comparing efforts
 Domestic efforts / Efforts to help others

Annex I Expert Group
on the UNFCCC
What is ‘integration’?
 Broader concept than linking emissions
trading systems based on emission caps
 May take place when agreements are
negotiated

To help the process take preferences into
account, expand efforts and participation
 …and/or when policies are undertaken

To enhance synergies between approaches,
even if adopted independently
 Integration requires comparisons
Annex I Expert Group
on the UNFCCC
Reasons for integration
 Climate change as a public good
 Competitiveness
 Fairness
 Static cost-effectiveness
 Dynamic cost-effectiveness
 Technology transfer
Annex I Expert Group
on the UNFCCC
Comparing domestic approaches
 Comparing domestic efforts
Costs:
complex metrics
Broad
direct comparisons of efforts: NATO’s
case, possible problems for climate policy
 Comparing domestic results
Uncertain
outcomes of broad technology
approaches
Timing
issues in comparing emission paths
Standards
easily comparable to outputbased sectoral targets – they could be linked
Annex I Expert Group
on the UNFCCC
Approaches in helping others
 Comparing efforts
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Expenses may be the metrics
Difficulties can be overcome, for being
similar to those experienced in the CDM
Contributions to international financial
institutions the most easily comparable
Finance flows from mechanisms: do they
belong to ‘helping others’ ?
 Comparing results

Multiple interactions may make it insoluble
Annex I Expert Group
on the UNFCCC
Conclusions
 Comparing e.g. a technology approach
with a cap-and-trade approach difficult
Except
for comparing narrowly defined
efforts (e.g., standards), no reliable metric to
determine whether countries are making
similar commitments – an essential element
of fairness
 Political decisions may still request this
 Comparing efforts to help others easier
than comparing results in helping others
Annex I Expert Group
on the UNFCCC