Board-level interest in climate change has either increased or remained the same in the past 12 months, despite a rise in populist political movements globally, according to a survey of the carbon pricing sector.
Two-thirds (64%) of the 135 members of the International Emissions Trading Association (IETA) responding to the poll raised concerns that an increase in nationalist policies could hinder the international response to climate change.
One survey respondent said: ‘Emissions trading needs to go on a public relations offensive and advocate its achievements more strongly, or it risks being undermined during times of political uncertainties.’
Nonetheless, 77% of respondents reported that climate change was a board-level priority in their organisations, and 90% said that senior-management engagement had not changed or had increased in the past year.
‘While the changing political headwinds are cause for concern, we are encouraged by those that are stepping up to lead on climate action. Nationalism and isolationism won’t solve this global problem,’ said IETA president and chief executive Dirk Forrister.
High levels of board engagement will boost international collaboration to drive action under the Paris Agreement, he added.
Jonathan Grant, director at PwC, who performed analysis on the survey, said: 'Despite global economic uncertainties, it’s encouraging to see that business is still focused on climate action and stepping up to support the Paris Agreement.'
IETA members highlighted the gap between current prices for allowances in the EU emissions trading system (EU ETS) and what was needed to reduce emissions in line with the Paris deal. Survey respondents said they expected the price under phase III of the EU ETS to be around €8–€11, consistent with the past four years.
Almost two-thirds (60%) of respondents expect the UK to leave the EU ETS after Brexit, with many believing would be replaced with a domestic market linked to the European system.
Survey respondents view China as an emerging leader on climate action, with 83% expecting the Chinese emissions trading scheme to encourage other countries to adopt a carbon price, and to reduce concerns over competitiveness in other countries when it comes into force in 2017.
An international agreement on aviation emissions, known as the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), was expected to be the second largest source of demand for international units after the Paris Agreement.
Meanwhile, the number of carbon pricing initiatives implemented or scheduled has almost doubled over the past five years, according to a study by the World Bank. More than 40 national and 25 subnational jurisdictions, responsible for about a quarter of global greenhouse-gas emissions, now put a price on carbon, the report revealed.
On average, carbon pricing initiatives implemented and scheduled for implementation cover about half of the total emissions from these jurisdictions, and represent around 15% of GHG emissions worldwide.
The World Bank Group has launched a Carbon Pricing Dashboard, to provide an up-to-date overview of carbon pricing initiatives with visuals and data.
