Business leaders from the banking and power sectors have joined forces to define the carbon price that would be needed to help the electricity generation industry meet the Paris Agreement.
Led by the CDP on behalf of the We Mean Business coalition, the carbon pricing corridors initiative will involve industry leaders from across the G20 group of nations to look at the range of carbon prices needed to decarbonise electricity generation between 2020 and 2030.
Firms involved include French utility Engie, US financial services business Bank of America, Spanish enrgy company Iberdrola and investment firm Hermes Fund Managers. The panel aims to publish its initial findings in the spring, before expanding its focus to cover other high-emitting sectors.
Greenhouse-gas emissions from the power sector must peak in 2020, falling thereafter to zero by 2050 in most G20 countries in order to limit global temperature rises to below 2°C, according to a report published last year by the International Energy Agency.
The CDP said that current price signals based on the cost of carbon are too low to attract the investments needed.
‘Carbon pricing is too important to leave in the realm of economic debate,’ said CDP chief executive officer Paul Simpson. ‘This is why CDP is bringing industry leaders – the people who make the decisions day in and day out that shape our power sector – to the table to help embed carbon pricing in our real economy.’
The work will give investors, companies and policymakers clear and credible price signals to invest in clean energy and drive the required emissions reductions, he added.
