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Taking Action on Climate Through Pricing Carbon

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Learn more about how a carbon price works and the benefits of addressing climate change by pricing carbon.

When it comes to climate change, business as usual is no longer an option. Studies estimate that the effects of climate change could cost the economy trillions of dollars before the end of the century. As global temperatures continue to increase, coastal communities will be at risk from sea level rise, wildfires will become more frequent, and extreme weather will be even more damaging.

But, there are steps we can take to slow the effects of climate change and mitigate its most damaging impacts. A carbon price, a market-based solution to reducing greenhouse gas emissions while promoting investment and innovation, is the most efficient, business friendly way to take action.

Published in: Environment
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Taking Action on Climate Through Pricing Carbon

  1. 1. The Business Case for Carbon Pricing
  2. 2. Climate Change Presents Massive Threat to Economy • Unchecked, climate change could reduce global GDP by over 20% by 2100 • US GDP lost to climate change will likely equal $44 trillion by 2060 • By the end of the century, $280 billion will be needed to adapt roads and railways • Global sea levels are projected to rise another 1 to 4 feet by 2100
  3. 3. Businesses are leading on climate action • Nearly half of America’s largest companies have at least one climate or clean energy target • Climate Disclosure Project (CDP) found almost 1,400 businesses worldwide, representing about $7 trillion in annual revenue, have either already implemented an internal carbon price or will do so in the next two years • PwC found a majority of businesses (72%) are actively pursuing renewable energy procurement, and of those that aren’t (28%), 61% said it was because there was no mandate or they didn’t see it as strategic
  4. 4. What is a carbon price? • A carbon price internalizes the cost of greenhouse gas emissions by assigning a monetary value to each ton emitted • The price can be implemented at different points throughout the supply chain • Revenues can be returned to citizens and businesses through dividends to help offset higher prices and/or invested to further reduce emissions, promote resiliency, and create jobs
  5. 5. Benefits of a carbon price • Reduce emissions • Promote fair competition • Spur innovation and create jobs
  6. 6. Reduce emissions • A national, economy-wide carbon price could reduce emissions to 39% below 2005 levels • Significantly greater than the United States’ commitment under the Paris Climate Agreement (26-28% from 2005 levels by 2025) • Statewide bills set prices at different levels, but impacts will still meaningful
  7. 7. Promote fair competition • U.S. energy market does not accurately reflect fossil fuel costs and has distorted competitive market forces • Failed to account for the costly environmental damage of fossil fuels • Incentivized fossil fuel use through favorable tax treatments and subsidies • A carbon price would allow renewables to compete fairly $0 $10 $20 $30 $40 $50 $60 -100% -80% -60% -40% -20% 0% 20% 40% 60% 2015 2020 2025 2030 Projections of the effects of a $25 price on carbon in the electrical sector Carbon price Retail electrical prices Electricity Demand Coal Usage Natural gas usage Renewable usage Electricity sector CO2 emissions
  8. 8. Spur innovation & create jobs • By 2021, EVs could be cheaper by the mile than oil-fueled cars • The amount of deployed MWh of utility-scale battery storage capacity doubled in 2016 • Increasing demand for renewables will result in potentially game-changing innovation: • Floating turbines • Biophotovoltaic devices • A study on a national, economy-wide carbon price found it would create over 2 million jobs
  9. 9. Carbon pricing in action • 41 OECD countries and G20 governments have put a price on carbon, implemented a cap-and-trade system, or both. Together with state and local efforts, these programs cover 15% of the world’s carbon emissions • With the addition of China’s new system, the % of the world’s carbon emissions covered under an ETS should increase by 5-10% • Specific examples: • RGGI • California Cap and Trade • British Columbia
  10. 10. RGGI • Member states have reduced emissions by 15% more than other states and experienced 4.3% more economic growth • Emissions have fallen 40% since RGGI launched • Between 2008 and 2016, electricity prices in RGGI states have dropped by 6.4% • RGGI has created $2.3 billion in lifetime energy bill savings for over 160,000 households and 6,000 businesses
  11. 11. California cap and trade • Since November 2012, state auction revenue has equaled nearly $4.4 billion • The California Air and Resource Board estimates the program will save the average family $200 per year by 2030 • Projected net economic impacts to reach nearly $123 million, with 945 jobs created and $5.5 million in additional tax revenue in the Inland Empire
  12. 12. British Columbia • Ranked first among Canadian provinces for GDP growth in 2016 • Clean energy sector has developed with over 200 businesses, generating almost $2 billion in annual revenues • Between 2007 and 2014, British Columbia’s real GDP increased by 12.4% • Over 160 businesses called for a carbon price increase after it hit it’s statutory limit in 2012
  13. 13. SIPA Study • A $50/ton carbon price would reduce emissions 40% from 2005 levels by 2030 • Increases in gas prices & electricity rates do not exceed 10 year peak • Reinvesting funds had better overall economic effect
  14. 14. Businesses support carbon pricing
  15. 15. Ways to take action on carbon pricing • Join our coalition of businesses supporting a national price on carbon • Sign an op-ed supporting carbon pricing in your state • Support state-based policies – currently looking for businesses in NH, VT, MA, NY, CT, RI, NJ, MD, WA • Host a business roundtable luncheon to educate other business leaders on carbon pricing For more information, go to carbonprice.asbcouncil.org

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