Shell, Unilever and more than 100 of the world’s largest companies recently released a statement calling upon lawmakers around the world to put a “clear, transparent and unambiguous price” on carbon emissions in order to address the climate challenge and help manage the business risk associated with climate change. The statement (available online), which is due to be presented to European Commissioner for Climate Action Connie Hedegaard in Brussels, calls for clarity to open channels for investment in infrastructure projects and its authors explain that in many cases, companies do not consider goals to cut greenhouse gas (GHG) emissions. The letter notes a key lesson from existing carbon pricing systems – without a sufficient carbon price signal, companies will have no incentive to invest in low-carbon projects or technology.
A price on carbon emissions must be core to policy objectives in order for the business community to deliver substantial GHG emission reductions and help the world meet the UN goal of containing the global temperature increase to two degrees Celsius. According to the International Energy Agency (IEA), almost 80% of the emissions allowable by 2035 under a two-degree scenario are already locked in because of future GHG emissions from existing power plants, factories and buildings. By 2017, all the allowable emissions will be locked in if no action is taken, the IEA said.
The letter was coordinated by Prince Charles’s Corporate Leaders Group on Climate Change, a group of companies brought together by Prince Charles and managed by the University of Cambridge. Other signatories include Bullfrog Power, Vattenfal, Alstom, Acciona, Skanska and Aviva.
The statement comes at an opportune time as Climate envoys from more than 190 nations are gathering in Doha from November 26 to December 7, 2012 for UN negotiations on climate change.