Carbon Pricing Unlocked

How can carbon pricing facilitate sustainable global economic growth? In order to answer this question, the Generation Foundation has teamed up with Ecofys in a research partnership. Spanning three years, the research  tackles carbon pricing from a new angle and explores the role of carbon pricing along value chains up to the end consumers. The project delivers quantified insights into the role carbon pricing can play in achieving the goal of a 1.5°C future.

Ecofys is one of the pioneers in carbon pricing, and has worked on the topic for nearly two decades. The Generation Foundation is the advocacy initiative of Generation Investment Management, which was co-founded by Al Gore and David Blood in 2004, and works on the decoupling of prosperity from resource-intensive growth.

First research results were shared at the UN climate conference COP22 in Marrakech: Impacts of a global carbon price on consumption and value creation. In this work, the experts have mapped GHG productivity along global value chains. This report established the basis for the subsequent research topics to provide different actors throughout value chains with actionable recommendations to benefit from a low-carbon transition and contribute to achieving a below 1.5°C world. Subsequently, two additional CPU outputs have been published to date, providing new insights into internal carbon pricing and carbon pricing revenues.

Internal carbon pricing

The Carbon Pricing Unlocked (CPU) team, together with CDP, developed two corporate guides which were presented at New York Climate Week. The C-suite guide aims to inspire board members to explore internal carbon pricing as a way to create corporate value. The How-to guide provides practical advice to the corporate team implementing internal carbon pricing.

Carbon pricing revenues

As with any policy based instrument, acceptance by those covered by the rules is critical for the policy’s success. The appropriate use of carbon pricing revenues that would be supported by covered entities and result in increased emission reductions could help to increase global ambition on climate action. The CPU team seeks to identify the relationship between the way revenues from carbon pricing mechanisms are being used and the acceptability of different revenue recycling approaches to covered entities. The results will be presented at COP 23 in Bonn.