Global carbon price needed to prevent dangerous global warming: new report

Author:
Ilario D'Amato
Reading time: 5 minutes
11 May 2017

LONDON: A worldwide carbon pricing system is needed to safeguard the future of the global economy, and to prevent dangerous levels of global warming, a group of over 200 leading organizations says in a new report from the Carbon Pricing Leadership Coalition (CPLC).

CPLC works to expand carbon pricing globally with the aim of covering 25% of total emissions by 2020 – double the current level – and 50% within the next decade. The CPLC’s new report shows that members of The Climate Group’s initiatives are leading the race to develop and introduce bold, innovative policies that are good for citizens and businesses alike.

“Forward-thinking states and regions are constantly showing how bold policies can help both their citizens and their economy, establishing a policy framework that enables businesses to create low carbon growth,” says Amy DavidsenExecutive Director North AmericaThe Climate Group.

“Many North American members of the Under2 Coalition - a group of 170 governments committed to reduce their greenhouse gas emissions toward net-zero by 2050 - are featured in this report as an example of what is possible with strong leadership. We hope that their successes will encourage others to pursue low carbon growth for their regions as well.”

SUB-NATIONAL LEADERSHIP

The CPLC report features members of the States & Regions Alliance and the Under2 Coalition – of which The Climate Group act as Secretariat.

The report highlights Alberta’s Climate Leadership Plan, outlined in November 2015, which aims to end coal pollution in the Canadian province. Alberta is also planning to phase in an economy-wide price on carbon, set at C$20 per ton this year and C$30 by 2018, which is being reinvested to support job creation in the renewables and clean energy sector.

Alberta, which is a member of the States & Regions Alliance, has committed to reduce its methane emissions by 45% from 2014 levels by 2025 and has set a limit on oil-sands emissions at 100 megatons a year. By 2030, an estimated 30% of the province’s electricity will be generated by renewable energy sources.

Shannon Phillips, Minister of Environment and Parks of Alberta

Shannon Phillips, Minister of Environment and Parks of Alberta

British Columbia, which is also a founding signatory of the Under2 Coalition, was the first to launch a revenue neutral carbon tax in North America in 2008. Since then, the report shows, its carbon emissions have decreased while its economy has grown – and it has already achieved carbon neutrality across its public sector.

The report shows that every dollar collected from the carbon tax is returned to British Columbians in the form of tax relief. This pioneering carbon tax has reduced British Columbia’s emissions by 5-15%, according to independent studies.

California – which initiated the Under2 Coalition – along with members Ontario and Québec, are praised in the report for their policy innovation.

In 2014, Québec and California launched a joint Emission Trading Scheme, creating the largest regional carbon market in North America. Last year, Ontario joined them by passing a law to set up its own greenhouse (GHG) ‘cap-and-trade’ system, which should generate about C$1.8-1.9 billion per year in proceeds – all re-invested in initiatives to further reduce GHG emissions in the province.

BUSINESS LEADERS

The report showcases members of the RE100 program, led by The Climate Group in partnership with CDP, which brings together companies committed to 100% renewable power. It also profiles two members of EP100, the collaborative initiative of influential businesses pledging to double their energy productivity.

The report indicates how governments and businesses are acting to tackle climate change, in a synergy that is beneficial for both. A prime example of this is Dalmia Cement, which is  a member of both the RE100 and EP100 initiatives.

The company wants to double its energy productivity while making a long-term transition to 100% renewable power, achieving a fourfold increase in the percentage of renewable energy in its electricity consumption by 2030. Furthermore, the report states, it has also set a shadow internal carbon pricing mechanism that helps in the decision-making process for capital intensive low carbon technology projects.

In April 2016, Mahindra & Mahindra, the world’s largest manufacturer of tractors, was the first Indian company to join EP100 and commit to double its energy productivity by 2030 on a baseline of 2005. Six months later, the company broke another record becoming the first corporate in India to announce an internal carbon price of US$10 – aiming to reduce its carbon footprint by 25% over 3 years.

Finally, consumer food multinational Unilever, another member of RE100, implemented an internal price on carbon last year of EUR 30/ton (US$32.6/ton) for significant capital expenditure projects. In addition to this, the company will source 100% of its energy from renewables by 2030 and will source 100% of its electricity purchased from the grid from renewables by 2020.

Unilever is also aiming to eliminate coal from its energy mix by 2020 and to directly support the generation of more renewable energy than it consumes, making the surplus available to the markets and communities in which it operates.

Jim Yong Kim, President of the World Bank Group – which act as Secretariat for the CPLC – concluded in the report: “We need to share your experiences widely to engage and convince many others. We need government, business, and civil society seated as equals around the table.”

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