The World Business Council for Sustainable Development and its member companies—which include Microsoft, Accenture, and 3M—agree that businesses and governments, working together on policy, is the next necessary step in accelerating Climate Action. To that end, WBCSD has created a comprehensive guide for policymakers, Why Carbon Pricing Matters: A guide for implementation.
“We believe the time for debating the need for carbon pricing is over, now is the time for the business community to push for policies that place a cost on CO2 emissions,” said Peter Bakker, President and CEO at WBCSD.
A carbon price is a monetary cost put on the per-ton emission of carbon dioxide into the atmosphere from use of fossil fuels or process emissions. This is not a new idea, having been proposed by University of Cambridge economist Arthur Pigou in 1920.
In The Economics of Welfare, Pigou introduced the concept of externality and the idea that external problems could be corrected by the imposition of a charge. As WBCSD notes, some governments are already leading the way. However, carbon pricing alone is not enough to create a low-carbon society—policymakers need to invest in research and development to create new technologies that complement carbon pricing.
“Carbon pricing is an accepted concept for managing carbon emissions and many jurisdictions are looking to implement one instrument or another,” said Rasmus Valanko, Director of Climate & Energy at WBCSD. “We want to take the discussions to the next level of detail, helping policymakers with the choices they need to make.”
WBCSD’s guide gives a high-level overview of the who, what and why of carbon pricing before diving deeply into implementation approaches, potential social impacts and revenue use, and future considerations such as building a global trading structure beyond the Paris Agreement.
In the conclusion to their report, WBCSD makes the statement, “Business looks forward to dialogue with policymakers to find the most suitable and expedient path to establishing carbon pricing and steps towards a global carbon market over the course for 2018.”
Photo: World Business Council for Sustainable Development
Jennifer Foley is a former 3BL Media employee.