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The role of sector no-lose targets in scaling up finance for climate change mitigation activities in developing countries

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M. Ward (ed)
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This paper discusses the role of Sector No-Lose Targets (SNLTs) in financing for climate change mitigation in developing countries. It focuses on the preparation of SNLT’s and particularly looks at policy measures and high level issues under SNLT, compliance and next steps forward. The authors stress that to have a reasonable probability of keeping global warming below 2 degrees centigrade, a new energy revolution is required. To meet this challenge, the international community is moving towards the next (post-2012) ‘global deal’ on mitigating greenhouse gas emissions and adapting to the effects of climate change made inevitable by emissions that have already occurred and those that will even as emissions are mitigated. There are a number of possible forms of sectoral agreements that together can help provide the comprehensive coverage of sectors and sources where abatement potential exists in developing countries - assuming adequate financing support is forthcoming. Two agreements that can be seen as mutually supportive are Sustainable Development Policies and Measures (SD-PAMs) and SNLTs.SNLTs are not a scaling up ‘silver bullet’, but they have some characteristics which suggest that for some sectors in some developing countries they may be the best new carbon finance mechanisms identified thus far. It is argued that in conjunction with SD-PAMs, SNLTs may be what is needed to strike the appropriate political balance (regarding mitigation) between industrialised and developing countries in the post-2012 agreement. However, to realise this potential, it is asserted that a very large effort is needed in a very short time. Key considerations include:

a very large capacity building effort is needed in countries and sectors that seem to offer the greatest opportunity for this mechanism to make a material difference to global emission reductions
capacity building efforts need to first attract the interest of key government departments and sector stakeholders in order to engage them in the technical preparatory work to develop proposals for SNLTs
it is unlikely that without some new form of technical assistance, that the United Nations Framework Convention on Climate Change (UNFCCC) negotiating process can cope with the complex technical detail that is likely to be contained in any such proposals
it is also unlikely that every developing country that may be interested to propose SNLTs will be ready to do so at the time that the international community expects the main details of the post-2012 multilateral climate change ‘deal’ to be agreed.