Reaffirming our commitment to carbon pricing and climate action
By Catherine McKenna, Minister of Environment and Climate Change of Canada and Feike Sijbesma, CEO of Royal DSM
When the world united around the historic Paris climate agreement, in 2015, the message was clear: It’s unfair to pass the burden of climate change to future generations.
We now need to put words into action. This week, leaders from 20 of the largest economies are meeting in Hamburg to find solutions to global challenges. Climate change will be front and center.
As the co-chairs of the Carbon Pricing Leadership Coalition (CPLC), we want to accelerate climate action and reaffirm our commitment to carbon pricing. The discussions in Germany are a great opportunity to keep the momentum going.
Launched during the Paris climate talks, the CPLC now consists of 30 governments and over 140 businesses, all fighting for a common cause: to advocate for the pricing of carbon emissions across the world. We are calling for bold leadership from everyone – governments, companies, academia and civil society. The CPLC provides a forum for these groups to show collaborative leadership on carbon pricing.
We know that putting a price on pollution is not only a highly effective way to lower emissions, but it will also unlock an enormous economic opportunity.
In fact, a recent report from the International Energy Agency and the International Renewable Energy Agency found that – over the next three decades – the Paris Agreement would boost the global economy by US $19 trillion, as the world moves towards renewable energy, zero-emissions transportation, and increased energy efficiency. We also know that carbon markets are projected to reduce the costs of climate action by 32 percent by 2030.
Consisting of some of the world’s largest companies, the CPLC understands the power of the market to influence change. We understand that carbon pricing spurs greater energy efficiencies and technology innovations. It provides market predictability for investors to make long-term, clean energy investments. And it positions countries to capitalize on the rapidly expanding clean growth economy.
As the High Level Commission on Carbon Prices recently concluded, a “well-designed carbon price is an indispensable part of a strategy for efficiently reducing greenhouse gas emissions, while also fostering growth”. A strong and predictable carbon-price trajectory provides a powerful signal to firms and individuals that the future is low carbon; and further, it can induce the changes needed in production, consumption, and global investment patterns.
By thoughtfully determining how to use the revenues from pricing carbon, we can boost economies and support the transition. Revenues, upwards of $50billion last year and growing, can be used to foster growth in an equitable way, including through household rebates, supporting low-income groups, creating good-paying jobs, investing in low-carbon infrastructure, and fostering technological innovation.
There is already major progress. Today, some 40 countries and more than 20 cities, states and provinces already use carbon pricing, with many more implementing policies in the near future.
In Canada, eighty percent of the population lives in a jurisdiction that prices carbon emissions, and the Government has committed to carbon pricing across the country in 2018.
At Royal DSM, an internal carbon price has been applied along with 1200 other companies who are either considering, or already using one.
This past Spring, the CPLC launched its annual Leadership Report, highlighting dozens of examples of carbon pricing action, ranging from governments working to expand, deepen, and link carbon pricing systems; to corporate innovations on internal carbon pricing; to student-led campaigns calling for a price on carbon.
It only makes sense to price what we don’t want – pollution – and foster what we do want: clean innovation, stronger businesses, good-paying jobs, and healthier communities with cleaner air.
Moving forward, the CPLC will continue strongly advocating for carbon pricing and working towards its target: Doubling the percentages of global emissions covered by explicit carbon prices by 2020, and doubling that again by 2030.
Through collaboration with countries, states, cities, businesses, and civil society, we will not let up the fight against climate change, or our steadfast commitment to the Paris agreement. It’s not only the right thing to do for our children, it’s a huge economic opportunity in the clean growth century.