Businesses have been urged to use an internal price of carbon to prepare for climate change impacts.
The call has come from the Carbon Pricing Leadership Coalition (CPLC), which was launched at the UN climate negotiations in Paris by the World Bank and International Monetary Fund. Internal carbon pricing was a key tool for companies to prepare for future climate change impacts and policies, the coalition said in a communiqué from co-chairs Ségolène Royal, French environment minister and Feike Sijbesma, chief executive of health and materials multinational Royal DSM.
At its first meeting in April, the coalition, which includes governments, business and civil society, announced goals to double the greenhouse-gas emissions covered by carbon pricing to 25% by 2020, rising to 50% by 2030. These goals are ambitious but achievable, according to the International Emissions Trading Association (IETA) in a report co-authored by the Environmental Defense Fund. Meeting them will require action beyond that anticipated, the report states. ‘But putting a price on carbon is a means to an end, not an end in itself. It will only be effective … if the underlying policies are sufficiently ambitious,’ the report stated.
Last month, 175 nations signed the Paris Agreement at a ceremony at the United Nations in New York, breaking the previous record of 119 countries backing the UN Law of the Sea in 1982. Nineteen countries, including the US and China, agreed to ratify the agreement as early as this year, while 15 countries, mainly small island states such as Tuvalu, have already ratified the agreement. Together these countries represent 49% of global emissions, just short of the 55% needed for the agreement to enter into force.
