Carbon pricing triples as companies prepare for climate limits

September 21, 2015 10:30
China is pilot testing emissions-trading markets and expects to expand the program next year. Photo: Bloomberg

Companies that put a price on their greenhouse-gas emissions for internal planning almost tripled this year, a sign that a growing number of businesses expect to face restrictions on carbon pollution.

Worldwide, 437 companies said they’re using internal carbon prices, up from 150 in 2014, Bloomberg News said, citing a report released by the Carbon Disclosure Project, a non-profit organization that gathers environmental data for investors.

The number more than doubled in the United States and Canada and swelled more than 10-fold in Asia, amid moves by the US, China and other countries to add new regulations to combat pollution.

“Corporations clearly are placing their bets about what the future of the policy landscape looks like,” Lance Pierce, the group’s North American president, told the news agency in a phone interview.

“They are planning for a future where carbon has a price.”

Businesses joining the list this year included General Electric Co., Colgate-Palmolive Co. and Nissan Motor Co.

Another 583 companies expect to start using a carbon price in the next two years, including Hong Kong electric utility CLP Holdings Ltd. (00002.HK) and internet firm Yahoo! Inc., according to the Carbon Disclosure Project’s third annual report.

China is pilot testing emissions-trading markets and expects to expand the program next year.

In the US, President Barack Obama introduced regulations on greenhouse pollution from power plants this year, although Republicans seeking to succeed him as president have vowed to undo the plan if elected.

The United Nations is brokering talks this year aimed at an international pact that would commit more than 190 nations to limits on heat-trapping pollution, Bloomberg said.

Companies said carbon prices help create incentives for energy efficiency projects or to switch to less-polluting fuels.

In the US, utilities including Duke Energy Corp. and American Electric Power Co. cited the expected cost of emissions in choosing to invest in low- or no-carbon generation, according to the report.

The total list represents “more than US$8 trillion worth of market value that has decided that this is an important issue to begin building a management strategy around", Pierce said.

Carbon prices ranged from the US$357.37 used by NGK Spark Plug Co. of Japan to the 95 US cents cited by Brazilian utility Cia. Energetica de Minas Gerais for emitting a metric ton of carbon dioxide or its equivalent.

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