[PDF] HOW-TO GUIDE TO CORPORATE INTERNAL CARBON PRICING

What is internal carbon pricing?

Introduction Internal carbon pricing allows companies to assess the financial implications of their carbon emissions and encourage increased energy efficiency. CDP, formerly the Carbon Disclosure Project, runs a global self-reported disclosure system for companies, cities, states, and regions to measure their environmental impacts.

How does carbon pricing affect the value of an organization?

Organizations can be directly affected by damages to business assets, supply chains, and resource and material scarcity, all of which have a direct impact on their economic and financial value. 5 “Internal carbon pricing: A growing corporate practice.” (2016).

What is an internal carbon charge?

However, they differ in the implementation of this price. An internal carbon charge is a tax applied internally and voluntarily per ton of carbon emitted. The charge reduces emissions in the short term while also encouraging innovation for low-carbon and low-energy technologies in the long term by redesigning incentive structures.

What are carbon pricing policies?

Carbon pricing policies create strong, transparent incentives to firms to internalize the social costs of carbon emissions (Popp et al., 2010; Kolstad et al., 2014; Nordhaus, 2014; Weitzman, 2015). their risks under climate change and policies intended to mitigate greenhouse gas emissions (Guardian, 2019).