What do HSBC, China, LafargeHolcim and California have in common? Despite the continuing debate in some corners about the ways and means of climate change, they are getting down to business — assigning a price to carbon pollution and then letting the market uncover profitable emissions reductions opportunities.
In recent years, proponents of clean energy have taken heart in the falling prices of solar and wind power, hoping they will drive an energy revolution. But a new study co-authored by an MIT professor suggests otherwise: Technology-driven cost reductions in fossil fuels will lead us to continue using all the oil, gas, and coal we can, unless governments pass new taxes on carbon emissions.
SkyPower “strongly supports any mechanism that encourages the generation or adoption of clean, renewable energy and dramatically reduces carbon emissions.”
How did Alberta, with massive oil reserves and a powerful industry pushing for growth, come to adopt progressive policies that made it the talk of the Paris climate change meeting just eight days after Notley’s announcement?
Having mapped the global spread of carbon pricing schemes since 2013 in the State and Trends of Carbon Pricing report that Ecofys writes annually with the World Bank, we find the proverbial glass remains both half-full and half-empty: unarguably, a carbon pricing wave is going on, but it has not yet resulted in a low carbon tsunami.
The Americas are well-positioned to lead the world on carbon pricing, with carbon taxes or emission trading already being implemented in Chile, Mexico, Colombia, California, the nine states of the Regional Greenhouse Gas Initiative, Washington, Alberta, British Columbia, Quebec, and Ontario. Carbon pricing is under discussion in additional countries, states, and provinces.
Model-driven energy scenarios provide policymakers and investors with a powerful decision-support tool but should not be used as a decision-making tool due to several limitations. So argues a new study in the journal Energy and Environment by Sergey Paltsev, deputy director of the MIT Joint Program on the Science and Policy of Global Change and a senior research scientist for both the Joint Program and the MIT Energy Initiative. The study shows that overall, energy scenarios are useful for assessing policymaking and investment risks associated with different emissions reduction pathways, but tend to overestimate the degree to which future energy demand will resemble the past.
On the eve of the World Economic Forum’s Annual Meeting in Davos, CDP announced the Carbon Pricing Corridor initiative, the world’s first industry-led initiative aimed at defining the investment-grade carbon prices needed for the power and industrial sectors to meet the Paris Agreement. The initiative seeks to address the emerging questions on how companies can manage climate change risk through the use of carbon price scenarios.
By Xie Zhenhua and Feike Sijbesma | China Daily
Most notably, a great opportunity lies in carbon pricing as a critical instrument to unlock the public and the private capital needed for the transition to low-carbon technologies. Putting a meaningful price on carbon, for instance, will stimulate energy efficiency technology and make renewable energy more competitive.
Low effective carbon prices in the context of energy taxation are the results of two factors. One is obvious: zero or low statutory rates on carbon and energy. The other one is more opaque, but significant: tax expenditures (TEs), i.e. government benefits granted through the tax code (such as exemptions, deductions, credits, rate reliefs or deferrals) that target a specific group of taxpayers as well as specific activities or regions.
“The future will not be like the past”. This was one of the first phrases used to describe the current stage of the transition to a low-carbon economy. In a partnership among the Brazilian Business Council for Sustainable Development (CEBDS), Carbon Disclosure Project (CDP), We Mean Business and technical support by WayCarbon, a workshop took place in São Paulo to approach carbon pricing and its importance to foster actions to drastically reduce carbon emission in companies from different sectors.
GOL is the second largest domestic and international carrier in Brasil, with 122 aircrafts in a single optimized fleet. Since 2011, we´ve been leading the Brazilian effort to establish integrated value chains to produce sustainable aviation fuels for low carbon flights. As we see, sustainable aviation fuels will be the final way to “decarbonize our operations”.
But when carbon reduction projects also require contributions to sustainable development, as Gold Standard projects must, they also accelerate progress toward the Sustainable Development Goals (SDGs).
The transition towards a low-carbon economy multiplies the challenges and the opportunities we are facing. In this rapidly changing environment, economic actors do not always have a clear vision of their prospects in tomorrow’s economy, nor do they necessarily have all the tools needed to exploit the full range of opportunities.
This year’s State and Trends of Carbon Pricing report, launched recently in Vietnam, includes the first deep dive analysis of the carbon pricing initiatives of countries’ climate plans submitted in Paris last year and looks specifically at how international trading of carbon assets would affect the cost of carbon mitigation. Of 101 countries considering the use of carbon pricing, the vast majority indicate they will use international approaches to emissions trading per their NDC pledges.