Corporate Carbon Pricing Leadership Workshop (Mumbai)

March 14, 2016


Exploring the Business Case of Internal Carbon Pricing in India

Progressive Indian businesses are the key to the country’s transition towards low carbon development. With an increasing domestic policy push on renewable energy and rising fuel levies (among other initiatives), as well as stronger international stakeholder engagement, companies are exploring tools – such as voluntarily applying an “internal” carbon price – to address risks and opportunities related to climate change policies.

The Carbon Pricing Leadership Coalition (CPLC), World Resources Institute (WRI), CDP, the World Business Council on Sustainable Development, and the Mahindra group hosted a high level workshop in Mumbai on 14th March to explore the landscape for internally pricing carbon within the Indian corporate sector, and encourage businesses to voluntarily take action on carbon pricing.

Workshop participants included 50+ leading Indian business practitioners, including high level representation from Mahindra, Tata, Godrej, Aditya Birla Groups, Infosys, Wipro, JSW, Ricoh, TOTAL, RUSAL, Yale University, Japan-IGES, ACC Limited (Holcim Group Co.), Essar, among others.

A first hand interaction - Determine, Use, Declare

The Workshop discussion centered on identifying the role of internal carbon pricing with respect to overall business objectives and potential approaches to incorporate it within operations. International perspectives from TOTAL, RUSAL, Yale University, Japan-IGES provided insights from international experiences using an internal carbon price, and reflections on common questions global companies share with their Indian peers.

Key points addressed:

  • “Avoiding the right-price trap” and understanding how to determine the level of the carbon price;
  • Identifying approaches to use and apply an internal carbon price; and
  • Communicating and engaging stakeholders – publicly declaring methods and impacts related to the voluntary carbon pricing program

The workshop aimed to “unpack” these issues, with the objective to bring together international and Indian businesses to facilitate the development of best practice guidance and other tools and resources on implementing a voluntary corporate carbon pricing program.

The workshop also included practical group exercises to help address questions on determining, using, and declaring an internal carbon price. The breakout sessions created interactive small-group discussions on the applicability of:

  • Shadow Pricing to assess investment risk concerns;
  • Corporate Funds to create finance pools to support investments in clean energy and efficiency projects;
  • Consumers and product supply chain strategies to future-proof product lines and anticipate market trends.

Indian companies are preparing for internal carbon pricing

There is clear interest in the Indian private sector to explore adopting internal carbon pricing, given increasing levies in the country (e.g., on coal and petrol) and globally, as well as the need to prepare corporate readiness for potential carbon regulations. Business have requested additional, focused support to help design and implement an internal carbon pricing system – specifically in the form of a “How To” guide, as well as additional technical trainings. Furthermore, some companies intend to pilot an internal carbon pricing program and share insights and lessons learned. Participants also expressed interest in learning more about carbon market simulations and how they could be established in the Indian context on a voluntary basis.

The CPLC will seek to prioritize the development of analytical tools and resources on internal carbon pricing within its work program, and WRI, CDP, and WBCSD will seek to provide support for corporate action through knowledge platforms and business networks.