sectoralcovering

Sectoral covering is a term used in policy analysis and risk management to describe the extent to which a policy, regulation, or program applies across different economic sectors. It evaluates how uniformly rules, instruments, or benefits are distributed, and whether sector-specific rules, exemptions, or sub-targets influence overall reach and effectiveness.

In practice, sectoral covering involves examining which sectors are included or excluded, how compliance obligations vary by sector, and whether the same incentives or penalties apply everywhere. A high degree of sectoral covering means broad applicability with consistent rules across most sectors; a low degree implies gaps or exemptions that tailor policy to particular industries or activities. The concept is helpful for balancing administrative simplicity with the need for sector-specific considerations, such as technical feasibility, cost differences, or political acceptability.

Common contexts include environmental policy, taxation, and social protection. For example, a carbon pricing scheme with wide sectoral covering applies to power, industry, transportation, and buildings, while agriculture might receive different treatment. In tax policy, sectoral covering can determine whether a single rate or multiple rates apply to various sectors, impacting competitiveness and administrative burden. In health or unemployment programs, sectoral coverage may reflect which industries are mandated to participate or subsidized.

Measurement typically considers the share of sectors under the policy, the consistency of rules across sectors, exemption frequency, and the administrative complexity introduced by sector-specific distinctions. Critics warn that over-segmentation can reduce effectiveness or create distortions, while under-segmentation may overlook essential sectoral differences.