In April 2021, the Global Green Growth Institute (GGGI) joined the Carbon Pricing Leadership Coalition through its Carbon Pricing Global Practice. GGGI’s Carbon Pricing Global practice is a leading actor in global piloting of international carbon transactions under Article 6 of the Paris Agreement and brings with it, experience in providing key services in carbon pricing policy design, development of regulatory frameworks and institutional capacity, design and structuring of transactions, and thought leadership.
Today in Glasgow, the Minister of the Environment and the Fight against Climate Change, Minister Responsible for the Fight against Racism and Minister Responsible for the Laval Region, Benoit Charette, and the Chilean Minister of Energy, Juan Carlos Jobet, invited governments across the Americas to endorse the Glasgow Declaration on Carbon Pricing in the Americas, an initiative of the Carbon Pricing in the Americas platform co-chaired by Québec and Chile.
Integrating carbon pricing into investment decision making and ensuring that carbon pricing policies are designed with consideration of social and development concerns were the two key topics of discussion at the Carbon Pricing Leadership Coalition (CPLC) Fourth Annual High-Level Assembly (HLA) that took place during the World Bank and International Monetary Fund Spring Meetings.
The Leaders’ Voices on Carbon Pricing to Drive Climate Action, a CPLC side event during COP23 in Bonn, provided a platform for partners and stakeholders to focus on this discussion.
See the latest carbon pricing initiatives around the world!
Launched in May 2017, the Carbon Pricing Dashboard is an interactive online platform that provides up-to-date information on existing and emerging carbon pricing initiatives around the world. It builds on the data and analyses of the annual State and Trends of Carbon Pricing report. Users can navigate key statistics and information on carbon initiatives implemented or scheduled for implementation using interactive mapping.
Today, the Government of Canada announced its plans to implement a carbon tax in Ontario, New Brunswick, Manitoba, and Saskatchewan. The tax will return 90% of the revenue back to households in those provinces and send the other 10% to businesses, schools, Indigenous communities and other localities to reduce carbon emissions. The plan is projected to provide most families more money on net when comparing the tax’s costs versus its rebate to households. The announcement continues Canada’s commitment to using carbon pricing as a key tool to reduce carbon emissions and build an innovative, low-carbon economy.
Today, the International Finance Corporation’s Climate Business Department and the Carbon Pricing Leadership Coalition launched Construction Industry Value Chain: How Companies Are Using Carbon Pricing to Address Climate Risk and Find New Opportunities. The Report includes insights into how the construction industry is moving towards sustainability and using carbon pricing as a key tool to lower their carbon emissions.
On October 3-4, 2018, the Global Maritime Forum organized its inaugural Annual Summit in Hong Kong. Opened by Chief Executive of Hong Kong, Ms Carrie Lam, the Summit focused on three topics of major relevance for the shipping industry: decarbonization, digitalization and protections. Additionally, a statement signed by 34 shipping CEOs was released calling for enhanced climate action under the International Maritime Organization, including the use of carbon pricing.
Building on the work of Smith students and faculty—as well as recommendations of the college’s Study Group on Climate Change—Breanna Parker designed a carbon pricing strategy that is part of a toolkit being distributed by the national Carbon Pricing in Higher Education Working Group.
The toolkit—developed by Smith, Yale, Swarthmore and other colleges in collaboration with Second Nature and the Carbon Pricing Leadership Coalition—includes case studies and recommendations on how colleges and universities can put a price tag on carbon emissions to demonstrate the environmental costs of specific products and technologies.
William Nordhaus has been awarded the 2018 Nobel Prize in Economics. Nordhaus, now Sterling Professor of Economics at Yale, suggested incorporating into economic models the costs of carbon dioxide emissions as early as 1975. He developed influential models to analyze the costs and benefits of reducing greenhouse gas emissions. His work provided a basis for the United States’ Federal estimate of the social cost of carbon initiated under President George W. Bush and completed under President Obama. Social cost of carbon estimates are now used by governments around the world and Nordhaus’s DICE model is at the core of much of the IPCC’s analysis on benefits and costs. In 2014, Professor Nordhaus led the development of Yale’s carbon charge, an internal revenue-neutral carbon pricing system that covers about 70% of the university’s building-related emissions.
IFC, a member of the World Bank Group, has become the first multilateral development institution to disclose climate-related risk under the guidelines of the Task Force on Climate-related Financial Disclosure (TCFD), joining a number of entities that are taking steps to identify and mitigate climate-related financial risk. The disclosure, made in IFC’s 2018 Annual Report, signals a growing momentum for climate-related disclosures.
On 19 September DSM’s CEO Feike Sijbesma was invited to represent the private sector at the G7 Ministerial Meeting on Working Together on Climate Change, Oceans, and Clean Energy. Canada’s Minister of Environment and Climate Change, Catherine McKenna, hosted counterparts from France, Germany, Italy, Japan, the United Kingdom, the United States, and the European Union along with representatives from Jamaica, Kenya, Marshall Islands, Nauru, Norway, Seychelles and Vietnam in Halifax.
DSM CEO Feike Sijbesma at the G7 ministerial meeting Source: DSM
Topics at the meeting included the importance of landing a clear set of rules, which will enhance transparency and accountability for implementing the Paris Agreement on climate change before the end of the year, which will help unleash private sector investment and create new jobs in clean growth.
Speech by Feike Sijbesma at the G7 ministerial meeting: Working Together on Climate Change, Oceans and Clean Energy.
"Thank you, Minister McKenna, for inviting me to join your important G7 meeting on climate change, oceans and clean energy. I am pleased to be here.
The commitment of governments and non-state actors to the Paris Agreement is high, but we are not on track to realize it. Unfortunately, Mother Earth doesn’t negotiate. I don't need to reiterate that the effects of climate change are already being felt, and that this is happening at a pace much faster than our actions to mitigate it.
Over a century ago, Royal DSM began as a state-owned coal mining company. Since then, we have transformed. First into a chemical company and later into a €10 billion science-based company - thriving in nutrition, health and sustainable living - employing 25,000 people worldwide. Today, we are a “purpose-led, performance-driven” company, with sustainability as our core value.
Improve, enable and advocate
When it comes to climate action, DSM employs an “improve-enable-advocate” philosophy. At DSM, we see it as both a responsibility and an opportunity.
First of all, improving our environmental performance lowers costs and risks. We’ve moved to a new, more ambitious absolute reduction target of 30% of our own emissions by 2030 versus 2016 levels. We will realize this through energy efficiency measures and sourcing more renewable electricity. For example, we will be buying 75% of our electricity from renewable sources by 2030. In 2017, we were already at 21%.
Secondly, enabling our customers with the solutions they need, to improve their environmental performance, drives more growth. Our bright science enables circular and low-emission innovations in areas such as animal feed, cars, solar panels, carpets and biofuels. We also help protect our oceans through sustainable aquaculture innovation and our materials science, which supports The Ocean Cleanup.
And thirdly, advocating climate action, like I am doing here today in Halifax, results in higher engagement of our stakeholders - ranging from our employees, to our investors, to society at large. Many of the technological solutions are already in place. However, broad societal engagement is key. We are more likely to succeed at an accelerated low-carbon transition, if it is socially inclusive, and if it is encouraged by demand for sustainable solutions from citizens and consumers alike.
Putting a price on carbon
Shifting to a low-carbon economy takes time and will require large investments, also in innovation. Therefore, it is essential that we anchor real incentives into our economic system. A key way to do so is by putting a meaningful price on heat-trapping gases and pollution. Carbon pricing, along with disclosure of climate-related financial risks and opportunities, can unlock trillions of private climate finance. We must do both to “future-proof” our economies and companies, and most importantly, the world we live in.
I was pleased to see that the New Climate Economy Report, released just last week, flags the need for the major economies, led by the G20, to put a price on carbon of at least $40-80 per ton CO2e.by 2020, with a predictable pricing pathway to US$100 by 2030, as recommended also by the High Level Commission on Carbon Prices led by Joseph Stiglitz and Nick Stern. And CEOs, too, have been advocating the need for credible and effective carbon prices, in Davos last year, with nearly two-thirds of them indicating that a price above $40 by 2025 will be needed. As DSM, we have put an internal price on carbon, which we apply when reviewing large investment decisions, of €50 per ton CO2e.
Significant progress has been made in recent years. EU carbon prices have increased to well over €20 due to recent reform of its emissions trading scheme (ETS). China is embarking on an ETS, and in the Americas, collaboration and alignment is growing between governments.
However, in the absence of a global entity that can ensure an internationally aligned development of carbon prices across jurisdictions, an often-flagged concern is that of competitiveness. This is why we need a well-informed conversation on the degree to which competitiveness concerns are likely to occur in the real economy, as well as on where and how they can be addressed in the best way. To this end, Anand Mahindra (Chairman, Mahindra Group) and myself jointly co-chair the High-Level Commission on Carbon Pricing and Competitiveness, supported by the World Bank Group. The work of this Commission will provide business and government leaders with new insights, thanks to a combination of strategic dialogue and new analysis.
We must enhance our collective ambition as well as our individual responsibilities to deliver on it.
Thank you."
Feike was the Co-Chair for the Third CPLC High-Level Assembly Co-Chair and is currently the Chair of the new High-Level Leadership Forum on Carbon Pricing and Competitiveness.
Today, at the Higher Education Leadership On Carbon Pricing event, a Global Climate Action Summit affiliate event, the Carbon Pricing in Higher Education Working Group released a toolkit that provides resources for other schools exploring internal carbon prices.
