The Paris Agreement, signed in December 2015, changed the discourse of the climate agenda, bringing the need for increased ambition in relation to emissions reduction targets and for much greater participation by society, increasingly encompassing subnational governments (i.e., including initiatives by cities and regions) and with the inexorable participation of the business sector.
To avoid reaching the level of global warming that will lead to the collapse of the global climate system, a process of decarbonization is needed on a planetary scale. Countries, companies, people: everyone counts. How can we encourage the reduction of emissions given unpromising political positions regarding the climate emergency?
Carbon pricing is one such incentive. It is basically a mechanism that allows a monetary value to be placed on greenhouse gas (GHG) emissions. It is a way of signaling the importance of considering the emissions of products and services that we choose to, for example, meet our daily needs, provide inputs for companies and “clean up” a country’s investments.
By setting a value for emissions, they are considered an externality that needs to be internalized. In other words, a price is set to cover the social and environmental costs of emissions, and this makes people, companies and governments seek less environmentally harmful options, reducing emissions and global warming.
In an urgent scenario like the one we are currently experiencing, effective initiatives that do not depend on a government resolution, such as pricing, can be a solution. To do this, it is necessary to advance the debate on Article 6 of the Paris Agreement, which creates a global carbon market and allows companies and governments to invest in innovation to combat not only climate change, but also social problems that directly contribute to global warming.
Carbon pricing is a “collective necessity to advance the climate agenda,” in the words of Dominic Waughray, head of public-private partnerships at the World Economic Forum. It allows us to provide guidance at scale to accelerate the reduction of carbon-intensive alternatives. And it has already been voluntarily adopted by thousands of companies (and some governments) around the world, including Brazil.
CEBDS, in partnership with CDP Latin America and with the support of WWF-Brazil, has consolidated good initiatives by companies operating in Brazil regarding their contribution to the climate emergency, including the carbon pricing models adopted by some of them. Learn more in the publication available online: “How companies have been contributing to the Paris Agreement” (link).
