What is carbon pricing?
Carbon pricing is the mechanism by which the external costs of carbon dioxide or greenhouse gas emissions can be priced into business operations or financial decision-making. It has emerged as a key policy mechanism to curb and mitigate the impacts of climate change and drive investment towards cleaner, more efficient alternatives.
Benefits of carbon pricing
Some benefits of carbon pricing include:
|Prepares for future regulation
Organisations that implement a carbon price are better prepared for a regulatory future where carbon is taxed
|Addresses sourcing requirements
Organisations that source or operate nationally can better understand international carbon pricing policies
|Promotes carbon innovation and efficiency
Pricing carbon bolsters innovation and supports the development of carbon efficient technologies, as well as disincentivising emissions intensive business practices
Pricing carbon facilitates emissions reduction pathways compatible with keeping global temperature rise to well below 2oC, in line with the Paris Agreement
As investors increasingly prioritise ventures that promote corporate sustainability, carbon pricing enables companies to respond to investors’ demands on climate
Setting a carbon price enables regulatory risk to be quantified when conducting scenario planning as part of transition risk evaluation
Key points to consider when implementing carbon pricing include:
- There’s no definitive answer to what a carbon price should be – implementation is unique to each business
- Identify the most appropriate “best fit” method by considering your climate or decarbonisation strategy and any specific constraints
- The most important starting point is to understand the business driver for setting a carbon price
How we can help with your carbon pricing
We offer a range of bespoke carbon pricing services including:
Upskilling workshops – We provide programmes to upskill leadership teams on carbon pricing and the potential benefits for your business
Internal carbon pricing strategies – We develop a bespoke internal carbon pricing strategy to incorporate the cost of carbon into investment decisions, budgeting and project planning
A guide to carbon pricing
Carbon pricing can bring a range of benefits to an organisation, but it can be difficult to know where to start. In our short guide you will learn more about:
- Who uses carbon pricing
- What to consider when implementing carbon pricing
- Benefits of carbon pricing
Carbon Pricing Guide
Would you like to learn more about how we can support your organisation in integrating carbon pricing into your net zero transition plans?
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