Internal Carbon Pricing: Strategic Guidance for Your Business

The fight against climate change requires the implementation of a carbon price. Making greenhouse gas emissions costly creates a positive incentive for companies and investors to develop and deploy low-carbon solutions.

Governments use various mechanisms: taxes and quotas set an explicit price; standards and regulations set an implicit price. In its annual report on the state of carbon pricing worldwide, the World Bank identifies some 40 initiatives covering 12% of global emissions. In France, the Energy Transition Act calls for an increase in the climate-energy levy on fossil fuel use from 22 euros per metric ton emitted in 2016 to 56 euros in 2020, and then to 100 euros in 2030. The European CO₂ Emissions Trading System (ETS), meanwhile, covers 2 billion metric tons of GHGs and sets a price ranging from 5 to 10 euros.

To support governments (or even get a head start on their policies!) in implementing a carbon price, many companies are making public commitments. For economic stakeholders, this is therefore a key current issue; that is why, Carbone 4 provides an educational overview to help you better understand the carbon price and the conditions for implementing it in your company by answering three key practical questions you might have:

• Why implement an internal pricing policy?
• What price range should I set?
• In practice, how do you do that?

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