Carbon Pricing in the Construction Industry Value Chain
How Companies Are Using Carbon Pricing to Address Climate Risk and Find New Opportunities
Today, the Carbon Pricing Leadership Coalition and the International Finance Corporation’s Climate Business Department launched Construction Industry Value Chain which details the ways construction companies are using carbon pricing to reduce climate risk and move towards sustainable construction.
The global construction industry accounts for between 25 and 40 percent of total carbon emissions in the world. With the industry's expected growth and the impetus for sustainable construction, companies are becoming increasingly accountable for their contribution to global emissions and are facing pressure from investors, banks, regulators, contracting authorities, and consumers to mitigate their climate risk and find new solutions to reduce their carbon footprint. In response, the industry is making inroads toward addressing these concerns.
Carbon Pricing in the Construction Value Chain
Twelve companies from sectors across the construction value chain, including aluminum, cement, glass, steel, infrastructure, construction services, and equipment manufacturing were interviewed for this paper. Their attitudes, existing initiatives, and future plans for carbon pricing were documented to reveal common concerns and themes surrounding carbon pricing in the value chain. Here are a few of the takeaways:
Using carbon pricing to reduce the industry’s carbon footprint will work only if companies can remain competitive.
Companies would prefer to operate on a level playing field and seek the universal application of an external carbon price across their sectors, applicable to all actors.
Companies lack clarity on how to operationalize and standardize the implementation of an internal carbon price. Businesses are interested in learning from the experiences of other companies.