The future will not be like the past

The future will not be like the past

“The future will not be like the past”. This was one of the first phrases used to describe the current stage of the transition to a low-carbon economy. In a partnership among the Brazilian Business Council for Sustainable Development (CEBDS), Carbon Disclosure Project (CDP), We Mean Business and technical support by WayCarbon, a workshop took place in São Paulo to approach carbon pricing and its importance to foster actions to drastically reduce carbon emission in companies from different sectors.

Currently, over 40 countries and over 20 cities, states and regions in the world already count on a carbon pricing  mechanism, covering about 13% of global GHG emissions, either by taxation or emission trading schemes. Aware of this scenario, several companies are willing to price their carbon emissions in order to anticipate the regulation and prepare themselves to a low carbon economy, a practice known as internal carbon pricing. According to Nicolette Bartlett, Carbon Pricing Director of CDP, from 2014 to 2016, the number of companies that report to have adopted an internal carbon price grew from 150 to +1,200, what expresses a huge worldwide concern in developing measures to achieve climate change impact reduction target. Besides that, the report “Embedding a carbon price into business strategy”, elaborated by CDP, shows that this year, Brazil has had an improvement of 74% in number of companies that use or intend to use an internal carbon price.

Through debates and presentations with representatives from institutions such as the World Bank, Itaú Asset Management, Latam, with mediation from CDP, several topics were discussed such as a worldwide carbon pricing scenario and cases from companies like Latam, that is now  coping with an imminent change in its sector for a low carbon model. “Aviation is a sector that will be heavily impacted. A solution will be an alternative fuel like the bio-kerosene for aviation”, said Sarita Severien, Institutional Relations and Sustainability Director of Latam. She also talked about initiatives already in progress, like the one being developed by ICAO, the Carbon Neutral Growth, which bring fixed goals so that in 2020, all countries should be able to fly carbon neutral, which means, neutralizing their carbon emissions.

Regarding investment issues, Alexandre Gazzotti, SRI Analyst of Itaú Asset Management emphasized: “Investors who are focused on long-term outcomes do take the carbon price factor into account”. Alexandre Kossoy, World Bank’s Financial Specialist of the Carbon Finance Unit adds: “China is already the country that most reduces carbon emissions in the world, around 1 billion tCO2, only in seven pilot provinces”.

To prepare companies to regulations up to 2020, GVces presented a tool that simulates an emission trading scheme and reinforces measures that promote a business environment appropriate to adopt internal carbon pricing:

• The decision should be worked with companies’ Top Leaderships, engaging the public, in order to enable them to understand the initiative necessities and benefits;
• Companies should involve the Sustainability, Risk and Finance areas, since they are part of the decision process;
• Employees capacity building to deploy projects that prioritize carbon pricing;
• Furthermore, the workshop discussed difficulties to develop regulation policies, position documents and developed action plans to start the process inside companies.

On the workshop, two practical exercises were offered to the participants. The first one simulated emission allowances allocation among companies from the electricity sector in a carbon market from a fictional country. The second one worked carbon pricing inside companies, so they would know what to do to measure their abatement cost.

CEBDS and CDP Latin America launched the Carbon Pricing: what the business sector needs to know to position itself during COP22 in the official side-event of the Brazilian Ministry of the Environment in partnership with CEBDS and the French Government. The study was supported by We Mean Business and focuses on fulfilling information gaps about carbon pricing that Brazilian companies found relevant. In 2015, CEBDS and CDP launched a practical carbon pricing guide, which instigated companies to learn more about mechanisms, regulation, international experiences and possible economic effects in Brazil.

This post originally published on CEBDS website: http://cebds.org/en/noticias/cebds-holds-workshop-on-carbon-pricing/#.WHOvgi0rK70