Christiana Figures (UN), Christine Lagarde (IMF), Jim Yong Kim (World Bank), and more recently Ségolène Royal (Ministre de l’Environnement, France) have recently called for a global carbon price. Specifically, Mme Royal has called for “an efficient, predictable and coordinated carbon price”. In Shell’s landmark climate report, CEO Ben van Burden called for a global carbon price to be introduced. They care.
World leaders want a global carbon price as a financial mechanism for reducing global warming emissions by charging emitters of carbon dioxide (CO2) into the atmosphere. The price must be universally accepted as fair, credible and based on science and not on changeable political expediency, so that citizens and governments can see clearly exactly what their emissions cost.
At present carbon pricing is based on ‘cap and trade’ whereby governments auction a set number (the ‘cap’) of CO2 emissions permits that are then traded. Prices are driven by supply and demand (an over-supply of permits means demand dries up and prices drop).
This system is not based on the true cost of damage associated with carbon emissions and will collapse after the last Giga tonne of CO2 is emitted. It will not address our carbon legacy – the ongoing loss and damage caused by climate change – that will affect generations to come.
Our carbon price is based on the financial loss and damage attributable to manmade climate change. It uses a science based approach to attribute a dollar value per tonne of CO2 emitted.
The total financial worldwide losses are a matter of record. Our research shows that of those losses 20% can currently be attributed to climate change and that this is increasing by half a percent per year. In 2025 it will be 25%.
Our carbon pricing framework is based on REACT (Reinsurance Event Attributed Carbon Tax). It provides carbon prices in real-time across all fuel types and power sources over 140 countries based on the financial loss and damage attributable to manmade climate change.
Providing carbon prices for all fuel types and processes – including solar – incentivises the transition toward low-carbon fuels and high-efficiency technologies. Our framework is future proof as it caters for new and emerging fuel technologies, and will continue to work after the last Giga tonne of CO2 is emitted.
The PALcarbon price is science based, independent and predictable.
Unfortunately they do. Even solar panels are manufactured using electricity from fossil-fuel power stations. What matters more is that we pay for the ongoing damage that our CO2 legacy will cause in the coming centuries. The emissions and / or embedded CO2 in current and future energy sources will enable the damage accounting and carbon pricing to be done properly (it must be future-proofed).
Our prices are future-proofed and coupled with a revenue distribution scheme that
- incentivises carbon emitters to reinvest in renewables and lower carbon intensive fuels,
- provides continuous revenue against the ongoing damage caused by manmade climate change long after the last Giga tonne of carbon dioxide is emitted,
- benchmarks carbon pricing globally, by country, and by corporation,
- proposes revenue allocation to AIMS (Adaptation, Insurance, Mitigation and Social compensation) to recompense those impacted by the consequences of climate change.
Globally, REACT and our PALcarbon price benchmark will mean that the principle of ‘The Polluter Pays’ will be upheld consistently and globally. The consequences of global warming emissions affect everyone, there is no ‘planet B’.
Nationally, there is a real financial benefit for adopting carbon prices for all fuel types and technologies to work in conjunction with national policy to incentivising the move to a low or zero carbon future. For example the effective carbon price for electricity consumers in UK is $4/MWh compared to $0.8/MWh in France, the difference being the cleaner energy mix. For example, in California, carbon taxing puts 11 cents on a gallon of petrol.
For businesses, there is a real financial benefit for adopting a robust carbon price benchmark or a shadow carbon price. For example the in-house carbon taxing system at Microsoft has resulted in a marked reduction in overall company costs: purchasing 10 billion kilowatt-hours of green power reduced emissions by 7.5 million metric tons of CO2 and saved more than $10 million a year.
With global leadership by the UN, IMF, World Bank, Shell, et al.
Our REACT carbon pricing framework is specifically designed to work at the global, national, corporation and even individual level.
We can help. By using PAL’s product suite we can help you ascertain your present and future carbon costs and potential savings. For your corporation, PAL can help you by carrying out a carbon audit and implementing your own in-house carbon pricing scheme.
The scientific background is given in the e-book, paperback and website versions of Predicting the Price of Carbon Vol.1 How to crack the climate change code for good by PAL Director (Research), Richard H. Clarke, published by Predict Ability Limited.
We provides realtime carbon pricing via our smartphone app PALcarbon, available on the App Store and Google Play. We also provide a PALcarbon Pricing Dashboard and Calculator on our website, along with our PALcarbon Data Service.