EXPLODING THE MYTHS OF SECTORAL APPROACHES

The document argues that Sectoral Approaches (SAs) are often misunderstood as top-down international carbon pricing schemes, whereas practical implementation requires a 'bottom-up' approach starting with domestic policies. Through case studies of the steel industry in China, India, and Japan, the author demonstrates that national priorities and sovereignty concerns make a single internationally agreed common solution unlikely. Instead, the paper suggests renaming SAs to 'SAAMs' to remove pejorative connotations and recommends that these measures co-exist with carbon taxes or Emission Trading Schemes (ETS) to drive the breakthrough technologies and RDD&D investment needed for deep decarbonization. The author concludes that while domestic schemes are more feasible, they should be linked internationally to manage trade competitiveness and leakage.

• The term 'Sectoral Approaches' (SAs) is viewed as pejorative by some stakeholders, leading to the recommendation that it be renamed to 'Sectoral Approaches, Agreements & Measures' (SAAMs).
• Practical SAAMs should be developed from the bottom-up, starting with domestic policies and measures, as there is little enthusiasm for a common international solution due to national sovereignty and priority concerns.
• SAAMs are not mutually exclusive with carbon taxes or Emission Trading Schemes (ETS); they can co-exist because carbon pricing alone may not provide the necessary investment for breakthrough technologies or carbon capture and storage (CCS).
• SAAMs are unlikely to significantly resolve competitiveness and leakage issues, as they would not fundamentally eliminate the distortion caused by some countries paying a carbon price while others do not.
• In China, absolute emissions caps are considered unimplementable; instead, the paper suggests sectoral crediting (SCM) based on emissions intensities or technology penetration targets.
• India's 'Perform, Achieve, Trade' (PAT) scheme, which uses energy savings certificates (EScerts) for high-carbon-emitting sectors, serves as a domestic example of a sectoral approach.
• For Japan's technologically advanced steel sector, a practical SAAM would focus on the rapid development and implementation of breakthrough technologies and CCS through a fully-resourced RDD&D plan.
• The UNFCCC has lacked detailed, sector-specific discussions on SAAMs, and the author suggests that specialized forums—either within the UNFCCC or via bodies like the OECD Steel Committee—would be more effective.

APA

Wooders, P. (2011). EXPLODING THE MYTHS OF SECTORAL APPROACHES. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/cs_exploding_the_myths_of_sectoral_approaches_final_2011.pdf

Chicago

Wooders, Peter. EXPLODING THE MYTHS OF SECTORAL APPROACHES. International Institute for Sustainable Development, 2011. https://www.iisd.org/system/files/publications/cs_exploding_the_myths_of_sectoral_approaches_final_2011.pdf.

Wikipedia

{{cite report |last1=Wooders |first1=Peter |title=EXPLODING THE MYTHS OF SECTORAL APPROACHES |publisher=International Institute for Sustainable Development |date=15 February 2011 |url=https://www.iisd.org/system/files/publications/cs_exploding_the_myths_of_sectoral_approaches_final_2011.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{wooders2011exploding, author = {Wooders, Peter}, title = {{EXPLODING THE MYTHS OF SECTORAL APPROACHES}}, institution = {International Institute for Sustainable Development}, year = {2011}, month = feb, url = {https://www.iisd.org/system/files/publications/cs_exploding_the_myths_of_sectoral_approaches_final_2011.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }