As 195 countries celebrate the signing of the climate agreement at COP 21 in Paris, the CDP – Carbon Disclosure Project and the Brazilian Business Council for Sustainable Development (CEBDS) shed light on a key discussion to address the challenge of keeping the planet's temperature rise within the safe limit of 1.5ºC by releasing a video with opinions from personalities Brazilian and foreign countries on carbon pricing.
As recognized in the text of the climate agreement signed in Paris, putting a price on carbon is essential to direct the trillions of dollars needed to boost the low-carbon economy. Due to its comparative advantages, Brazil is in a position to play a leading role in this process, as was the case during the negotiations of the Paris climate agreement, in which our country occupied a prominent position.
“We seek to listen to different leaders from governments, companies and civil society in order to gather input for the construction of a positive agenda on carbon pricing, aiming to leverage innovation and competitiveness in Brazil,” says Juliana Lopes, CDP director for Latin America.
The video is part of a CDP and CEBDS project, supported by the Climate and Society Institute – ICS, and includes a guide with the aim of clarifying what carbon pricing is, its mechanisms and examples of its application by governments, companies and investors, as well as a case study on the use of internal carbon pricing.
“We intend to deepen the discussion and make progress on this issue, which is still very focused on who is against and who is in favor,” says Marina Grossi, president of CEBDS. According to her, it is necessary to discuss the models and delve deeper into the issue. “It is increasingly clear that we are already realizing that carbon pricing is a great advantage for Brazilian companies and for Brazil,” adds the president of CEBDS.
CDP and CEBDS started this project in 2015 to engage companies, investors, governments and civil society in dialogues on carbon pricing. In one of these sessions, the stakeholders Brazilians were able to get to know the Carbon Pricing Pathways (from English, Carbon Pricing Pathways), a set of tools, developed by the CDP and the We Mean Business to stimulate productive and progressive dialogue on the specific values that need to be assigned to the cost of greenhouse gas emissions.
Decision-making tool
More and more businesses are working on carbon pricing by setting an internal carbon price, also known as shadow price, to anticipate more restrictive future regulations in terms of greenhouse gas emissions and also to guide investment decisions.
For example, the number of companies reporting the use of an internal carbon price to the CDP tripled from 150 in 2013 to 437 in 2015, according to the study “Putting a price on risk: Carbon pricing in the corporate world” of the CDP.
Cemig is one of these companies and its experience is reported in the video and also in a case study specific on the topic. According to Cemig, the definition of an internal carbon price is relevant for decision-making in different contexts. For example, to assess the risk of increased greenhouse gas emissions in its energy matrix, in the production processes due diligence relating to acquisitions, mergers and implementation of new assets that use it.
Watch the video:
