On June 15, the Carbon Pricing Leadership Coalition joined corporate, academic, financial, and NGO leaders at the annual US Business Council for Sustainable Development-World Business Council for Sustainable Development “Pathways to Impact: Driving Scale & Aligning Values” conference at Yale University. This year’s event highlights included a discussion on the role of internal carbon pricing in driving effective emission reductions.
The need to implement and scale up sustainable solutions to climate change adversities marked the two-day agenda. Reflecting widespread momentum around carbon pricing, the conference featured a full session on internal carbon pricing, showcasing companies’ implementation strategies. The CPLC presented opening remarks on carbon pricing trends in the global context, including its application in
- 39 national jurisdictions and 23 sub-national jurisdictions, where
- 13% of global emissions (7 GtCO2e) are covered, and
- 1000+ companies disclosing their current or intended internal carbon price
Representatives from Ernst & Young, LafargeHolcim, Shell, Tata Group, and Yale University were among the CPLC partners in attendance both as speakers or attendees. Speakers shared results from Yale’s Carbon Charge Project and Microsoft’s Carbon Fee framework and process, and discussions among USBCSD and WBCSD participants provided valuable insights into different carbon pricing practices.
Sharing Lessons from Implementation
Ryan Laemel, the coordinator of Yale’s Carbon Charge Project, provided an in-depth practitioner’s perspective of the university’s internal carbon pricing scheme, describing it as an iterative process, emphasizing the value of learning by doing, and adjusting objectives and scheme mechanics accordingly. "There is a high degree of flexibility with internal carbon pricing mechanisms, so it's important for companies to start by setting clear objectives, then to allow the scheme to evolve over time based on real-time observations and analysis," he said.
The scheme’s key purpose - the establishment of a clear price signal setting a financial incentive for energy reduction and behavioral change -was driven by a good understanding of the motivations, perceptions, actions, and feasibility of a carbon pricing design. With experimentation and “learning-by-doing” at its core, the Yale Carbon Charge team emphasized and encouraged a multitude of and flexibility within different types of carbon pricing schemes.
Dan Sobrinski from WSP Sustainability and Energy presented Microsoft’s revenue-neutral Carbon Fee program, designed to help achieve the company’s carbon neutrality goal, and fund its sustainability initiatives. The program’s major successes were the increased inter business-unit attention around energy usage as well as the fundamental finding that both the carbon price and the corporate strategy must be tailored to the company’s objective.
Following the presentations, guests engaged in a lively discussion regarding the future outlook of carbon pricing, and its nexus with sustainability as well as the need for greater learning and sharing of best practices among peers.
"There are best practices, but the private sector needs more actors and case studies to build an evidence base that mobilizes broader support."- Ryan Laemel, Yale Carbon Charge Project
The CPLC will continue to strengthen its commitment to expanding, deepening, and converging carbon pricing schemes. Its mission to translate support into action brings together 25+ governments and 100+ business and many civil society leaders to share experiences with carbon pricing and expand the evidence base for effective carbon pricing policies.
Pursuing its goal of achieving increased ambition, political support and action, the CPLC will launch a new Carbon Pricing Webinar Series, in partnership with Yale University and the World Economic Forum, in July 2016.