The CSI has been advocating that a sector-based approach to climate mitigation can effectively enhance a large-scale response to climate change. In 2009, we published the results of a modeling exercise, in which we showed the potential for large greenhouse gas emissions reductions in the cement industry worldwide through the adoption of a sectoral policy approach. (Click here to view the modeling results.)
The CSI considers sectoral market mechanisms as the most effective and efficient tool, as they can build on national priorities and leverage existing emissions reduction efforts, while rewarding emissions reduction efforts with tradable credits. While ultimately a global climate agreement needs to be put in place, the CSI recognizes that large-scale emissions abatement activities can start at regional and/or country level.
To be successful, sectoral market mechanisms need to be based on a consistent measurement, reporting and verification (MRV) system so that a later linking to a global market is possible. MRV standards should be globally harmonized, or for the least be compatible and comparable, as diverging standards would lead to concerns over the environmental quality of credits The United Nations Framework Convention on Climate Change (UNFCCC) has a role to play in developing this global MRV system.
To view the Sectoral Market Mechanism brochure, please click here.
To view the Sectoral Market Mechanism presentation, please click here.
A sectoral market mechanism consists of emissions reductions goals jointly set by governments and companies for industry sectors. It is applied at regional or national level and includes sectoral emissions reduction targets, rewarded by tradable credits provided that emissions are reduced below agreed benchmarks.
To implement a sectoral market mechanism, a database is needed to collect accurate and verifiable information on CO2 and energy performance of industrial installations at sector level. On this basis, sectoral performance metrics can be developed, expressed as an improvement objective towards a business-as-usual trajectory. While the performance metrics should ideally be the same globally, the values attributed to performance improvements can be set nationally / regionally, in accordance with the technical and economic capabilities of a country or region.
The CSI is willing and able to work with governments to elaborate practical aspects of a suitable sector participation scheme and appropriate carbon commitments. It has developed a number of tools that can support action:
Sectoral Market Mechanism presentation
Click here to view the Progress Report online.