The study was launched this Wednesday (16), in Marrakesh, Morocco Carbon pricing: what the business sector needs to know to position itself , prepared by the Brazilian Business Council for Sustainable Development (CEBDS), in partnership with CDP (formerly Carbon Disclosure Project) and support from We Mean Business.
The objective of the publication is to provide Brazilian businesspeople with all the necessary information about carbon pricing mechanisms, their effectiveness in reducing emissions, benefits to socioeconomic development, impacts on the competitiveness of different sectors and how companies are part of this process.
The launch took place during a discussion hosted by CEBDS, in partnership with the Ministry of the Environment (MMA), on carbon pricing and financial strategies for implementing NDCs. The event took place alongside the 22nd Conference of the Parties to the United Nations Framework Convention on Climate Change. (COP 22).
"We made the study public here at the Climate Conference because companies are an inseparable part of the solutions for decarbonizing the global economy, and this is a mechanism that brings greater predictability to their investments and increased competitiveness to low-carbon business solutions. The publication shows how companies would fit into the different carbon pricing mechanisms that can be adopted in the country, as well as their consequent impacts, opportunities, and challenges," said CEBDS President Marina Grossi, who also serves on the advisory board of the Partnership for Market Readiness (PMR) in Brazil. The PMR is a forum of countries created by the World Bank to promote actions to implement carbon pricing mechanisms in participating countries.
Currently, more than 500 companies worldwide already consider internal carbon pricing in their decision-making, and another 700 plan to do the same by 2018, according to the CDP. Carbon pricing means assigning a price to the greenhouse gases (GHG) emitted by products or services provided to society. Carbon pricing can come in the form of a tax (direct taxation) or the transaction of carbon certificates (traded on the financial market), or even a combination of both. "It's a complex discussion that can't be reduced to choosing one mechanism over the other. To be effective in promoting a greener economy, carbon pricing must be understood as part of a regulatory framework that directs investment toward clean technologies, ensuring an efficient transition to a low-carbon economy," states Grossi.
The European Union and around 40 countries and 24 subnational territories already price carbon, covering 13% of global emissions, according to the Organization for Economic Cooperation and Development (OECD). "The practice has expanded rapidly, especially since Article 6 of the Climate Agreement provides for the establishment of a global carbon market, which is beginning to be outlined at this COP22 and will certainly receive a powerful boost from China's already initiated adoption in its subnational markets, which are expected to integrate, becoming a national market next year," reflects economist Lilia Caiado, coordinator of the Energy and Climate Change Thematic Chamber at CEBDS.
In this scenario, Brazilian companies need to put carbon pricing in the immediate horizon of their decision-making. "Both because efficiency in reducing emissions will positively impact corporate competitiveness and risk management, and because of the important contribution it can make to the global effort to contain global temperature rises by 2 OC, with effort to keep it at 1.5 OC above the pre-Industrial Revolution average”, concludes Marina.
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