Homepage / Currency / Companies are moving faster than many governments on carbon pricing
'Never underestimate human stupidity,' says historian whose fans include Bill Gates and Barack Obama China says its second-quarter GDP growth was 6.7%, meeting expectations Asian stocks poised for slightly softer open as markets await China data Elon Musk courts new controversy after tweeting, then deleting, an attack on a British cave explorer How a former eBay employee is inspiring kids to become tomorrow's problem solvers Here's what the DOJ needs to happen to win its appeal against AT&T The 2018 Hyundai Tucson is a good bargain crossover but skip the high-end model Trump suggests US and UK could strike a 'tremendous' trade deal after Brexit PlayVS wants to bring electronic sports gaming into high schools The unintentional winners of Prime Day: Amazon’s competitors Elon Musk insists he's neither Democrat nor Republican, as political contributions come under fire Amazon could make a big impact in health by helping people eat better Even without a GPS, here's why mobile phones are 'the best spying device you can imagine' How the Bee Gees plan to stay alive in the era of digital music Verizon, AT&T, Sprint and T-Mobile say they have unlimited data plans, but here's the fine print Elon Musk has a new interest group that could be added to his list of enemies: Cabbies Uber's troubled culture persists, as sensitivity 'blind spots' raise new questions Top VC Deals: Uber and Alphabet backed Lime, Larry Page invests in personal aircraft company Tesla rolled out a new attendance policy for hourly workers this month — read it here Elon Musk: Whatever pain Tesla factory workers felt, 'I wanted mine to be worse' Facebook, Google and Twitter will testify next week at a House Judiciary hearing on content moderation In ETFs, the bigger the stock, the more money goes into it and that could be costing regular investors Ex-Labor secretary: Cash handouts 'may seem like a pipe dream' but could be 'inevitable' Cisco, networking stocks drop on a report Amazon Web Services is developing its own network devices Microsoft's president says the government needs to step up regulation of face recognition technology Facebook admits it's not adding enough minority engineers, says the problem may lie with its roots The 2018 Cadillac ATS-V is one of the best sports sedans you can buy There’s one media stock that’s outperforming Netflix Trump's SCOTUS nominee thinks ISPs have First Amendment rights, which could hurt privacy laws The bond market is sounding an alarm on the economy as 'yield curve' spread hits narrowest in 11 years on Friday India execs raise concerns about potential trade war with US Watch out, retailers. This is just how big Amazon is becoming Jefferies raises Facebook price target, sees revenue topping expectations An Amazon Prime Day for health care? Here's what experts say it could look like Can money buy success at the World Cup? Children and PTSD: Health risks linger long after acute psychological trauma ends Netflix faces major risk heading into earnings, money manager says Morgan Stanley raises its price target on red hot WWE stock by nearly 70% to Street-high Trump walks back Brexit threat: 'Whatever you do is OK with us' 4,500 tech workers, 1 mission: get Democrats elected Watch: Trump holds news conference with UK Prime Minister Theresa May after he attacked Brexit plan Goldman Sachs says cybersecurity stocks could get a boost from fears of meddling in the midterm elections AT&T's Randall Stephenson says chances of a successful DOJ appeal are 'remote': 'This changes nothing' PNC shares gain after higher commercial lending leads to better-than-expected earnings report Amazon just hit a new high, and one trader sees more to come Stocks making the biggest moves premarket: JPM, DIS, BLK, T, JNJ, MCD & more Deutsche Bank warns Netflix may miss second-quarter subscriber expectations Wells Fargo shares fall after second-quarter revenue misses estimates Trump’s dream to meet the queen makes this trip a victory, former White House aide says In this earnings season, a volatile stew of expectations London mayor says the UK is not afraid to call out Trump: ‘We think you’re wrong’ ‘Trump Baby’ balloon takes flight in central London amid protests Even May's UK opponents are backing her against Trump Theresa May had a plan in place for Brexit. Then Donald Trump landed Jack Dorsey loses 200,000 followers on Twitter after fake user purge Trump to have tea with the queen at Windsor Castle The US is trying to nail down terms with Pyongyang, while 'South Koreans aren't wasting time' Trump is likely to ask Putin for help with his North Korea problem European markets seen higher amid global trade war fears; Trump visits the UK History shows the US-UK special relationship is increasingly one-sided New tariffs threatened by the US would be more harmful to China than the first batch, says bank CEO Chinese imports fall short of expectations, while exports top estimates China says both its imports and exports with the US rose in the first half of the year Asian stocks extend gains amid relief over lack of trade escalation, tracking US rally Nvidia and Netflix produced top shareholder returns over past five years, BCG study shows Apple announces $300 million clean energy fund in China Broadcom has a new strategy after failing to buy Qualcomm: Roll up enterprise software companies Justice Department appeals Time Warner-AT&T merger approval Women in private Facebook group for cancer gene carriers found marketers could get their names How to avoid overshopping on the longest Amazon Prime Day yet Microsoft challenges Slack with a free tier for Teams Amazon, Xealth working on pilot program to deliver products to patients after hospital discharge Trump's tariffs are unlikely to cause a recession because they are leaving the most important part of the economy alone There are a lot of misconceptions about browsing the web in 'incognito' mode, researchers say How an obscure British rule — the 'chain principle' is changing Comcast's strategy for Fox and Sky Netflix just beat out HBO in Emmy nods, snapping HBO's 18-year streak John McCain blasts Trump’s NATO performance and warns that 'Putin is America’s enemy' Two Dow stocks to buy and one to fade in a volatile market Uber will let riders pay with a Venmo balance Cramer: Pizza execs say Papa John’s is ‘falling apart’ when compared with Domino’s This 23-year-old founded a company with self-driving car tech that's giving Tesla some competition NBA Commissioner Silver ‘rooting’ for Disney in the battle against Comcast for Fox L Brands tumbles after weak sales at 'broken' brand Victoria's Secret Law firms climb aboard the AI wagon A welcome upgrade to apprenticeships A Chinese music-video app is making WeChat sweat Development-impact bonds are costly, cumbersome—and good Big corporates’ quest to be hip is helping WeWork What the UK’s top politicians have said about Trump — and it's not always nice Kim Kardashian West and Warren Buffett agree that this is the best investment you can make Tesla factory workers reportedly drank Red Bull, walked through raw sewage to meet Model 3 quotas Amazon is 'the most robust and durable' among the FANG stocks, Canaccord says As Trump’s UK visit faces backlash, here are some of his most high-profile friends in the country Hackers are selling access to law firm secrets on dark web sites Mega-chip stock Broadcom loses $17 billion in value after Wall Street demolishes company's software acquisition strategy Trading app Robinhood adds two new cryptocurrencies despite bear market Apple just updated its MacBook Pro with new processors and better keyboards The UK government wants a 'new arrangement' for its banks after Brexit Consumer prices rise at the fastest pace in 6 years An under-the-radar defensive stock is quietly surging as safety plays make a comeback

Currency

Companies are moving faster than many governments on carbon pricing

ECONOMISTS have long argued that the most efficient way to curb global warming is to put a price on the greenhouse-gas emissions that cause it. A total of 41 OECD and G20 governments have announced either a carbon tax or a cap-and-trade scheme, or both. Add state and local schemes, and they cover 15% of the world’s emissions, up from 4% in 2010. Voters concerned about climate change are egging them on. So, too, are corporate bosses. More firms are imposing such pricing on themselves, even in places where policymakers are dragging their feet.

Of the 6,100-odd firms which report climate-related data to CDP, a British watchdog, 607 now claim to use “internal carbon prices”. The number has quadrupled since CDP first began posing the query in its annual questionnaire three years ago. Another 782 companies say they will introduce similar measures within two years. Total annual revenues of these 1,389 carbon-price champions amount to a hefty $7trn. Most come from rich countries, but more developing-world firms are joining them.

  • Retail sales, producer prices, wages and exchange rates

  • Foreign reserves

  • Why commodity prices are surging

  • Why a judge’s injunction on DACA is unlikely to stand

  • Teenagers are becoming much lonelier

  • The Supreme Court considers the scope of automobile privacy

Corporate carbon-pricing comes in two main varieties. The first involves business units paying a fee into a central pot based on their carbon footprint. Microsoft, for example, charges all departments for every kilowatt-hour of dirty energy they contract or air mile flown by executives, to help meet firm-wide climate targets. This payment, equivalent to $8 per ton of carbon dioxide, is designed to encourage those who can cut emissions most easily to do more, and nudge everyone to do something, says Rob Bernard, who oversees the software giant’s environmental activities.

Tracking exactly how much of the power a business unit consumes comes from coal, say, is not always straightforward. Fee-based systems like Microsoft’s therefore remain rare. Although some smaller firms have toyed with them, Disney is the only other big multinational to use one. Many more firms use shadow carbon prices to stress-test investments for a world of government-mandated levies.

Investors increasingly demand that companies take that possibility seriously—81 countries mention a carbon cost in their national pledges to limit global warming under the Paris climate agreement of 2015. Plenty of the Paris promises remain just that for now, but bosses ignore them at their peril, cautions Feike Sijbesma, who co-chairs the Carbon Pricing Leadership Coalition, which groups green-minded governments and businesses under the auspices of the World Bank.

In his day job as chief executive of Royal DSM, Mr Sijbesma has made the Dutch food producer examine all proposed ventures to check whether the sums still add up if a ton of carbon dioxide cost €50 ($60), well above the going rate of €6 or so in the European Union’s emissions-trading system, which is kept low by an oversupply of permits. Where they do not, alternative feedstocks or cleaner energy suppliers must be found. If a project still looks unprofitable, it could be discarded altogether.

Businesses ranging from European supermarkets (France’s Carrefour and Britain’s Sainsbury’s) to Indian cement-makers (ACC, Ambuja and Dalmia) espouse shadow pricing. Some add flourishes. Besides assessing capital projects at €30 per ton of carbon dioxide, Saint-Gobain, a French maker of building materials, factors in a higher price of €100 per ton when choosing between long-term research-and-development projects. AkzoNobel, a Dutch chemicals giant, uses €50 per ton for most investments, but double that for those with lifetimes of 30 years or more.

These are some of the most ambitious schemes; many others lack bite. Plenty of firms which declare their shadow prices set them below $10 per ton of carbon dioxide. As John Ward of Vivid Economics, a consultancy, points out, that is “just high enough so it has no real impact”. Companies which use higher prices should treat them as more than a “spreadsheet exercise”, counsels one climate-change expert. Oil majors have priced in carbon for years when assessing exploration projects. But there is little evidence that high-price scenarios swayed their investment decisions.

Nevertheless, the trend for firms to incorporate carbon pricing is welcome. Some of the less impressive schemes could in time come to resemble Microsoft’s or Royal DSM’s meatier ones. Such voluntary steps will not stop the planet sizzling. But they help firms prepare for when governments do bring in pricing schemes. In December China launched a market for trading carbon emissions which is the world’s largest. The clearest sign of progress would be for similar policies elsewhere to render internal exercises redundant.

Source: economist
Companies are moving faster than many governments on carbon pricing

Comments are closed.