South Asia

The outcome of the December 2011 United Nations climate negotiations in Durban, South Africa, provides an important new opportunity to move toward an international climate policy architecture that is capable of delivering broad international participation and significant global CO2 emissions reductions at reasonable cost. This paper addresses an important component of potential climate policy architecture for the post-Durban era: links among independent tradable permit systems for greenhouse gases.

Sectoral approaches have been gaining currency in the international climate debate as a possible remedy to the shortfalls of the Kyoto Protocol. Proponents argue that a sector-based architecture can more easily invite the participation of developing countries, address competitiveness issues, and enable immediate emissions reductions. However, given the numerous proposals, much confusion remains as to what sectoral approaches actually are. This article provides a simple, yet comprehensive, taxonomy of the various proposals for sectoral approaches.

The 1992 United Nations Framework Convention on Climate Change (UNFCCC) created a 2-tier world. It called upon the developed ("Annex I") countries to "take the lead" in reducing carbon emissions, and, under the principle of "common but differentiated responsibilities," established no time frame for developing countries to follow. However, a consensus is now emerging in favor of low stabilization targets. These targets cannot be achieved without the participation of developing countries, which today emit about half of global CO2 emissions and whose future emissions increase faster than the emissions of industrialized countries under "business as usual" scenarios.