What is Carbon Pricing | CarbonChain
Carbon Pricing
Do you know the cost of carbon for your business? Understand how carbon pricing works, and explore the global carbon regulation map.
What is carbon pricing?
Carbon pricing refers to the mechanism by which governments capture the external costs of greenhouse gas (GHG) emissions, such as the result of heat waves and droughts or flooding and sea level rise, and tie them to the original emitters.
Carbon pricing is here. Is your business ready?
Due to the spread of carbon pricing schemes (see the carbon regulation map below) and the inevitable rise of the price of carbon, the commodities sector — the highest emitting industry in the world — is now faced with discontinuing high-emission activities, reducing emissions or continue business as usual and pay an increasing price for their emissions. This unavoidable trend is disrupting the economics of global supply chains and is the main factor in your organization’s carbon risk.
The impact of carbon pricing
Additional costs in a $110 per tonne carbon price scenario, compared to 2019 commodity prices [Wood Mackenzie, 2020, Frank et al 2017]
+$130 (40%)
Alumina
2019 price c. $330/t
+$1,200 (67%)
Aluminum
2019 price c. $1,800/t
+$200 (34%)
Finished Steel
2019 price c. $600/t
+$300 (19%)
Copper concentrate
2019 price c. $1,600/t
+$1,770 (80%)
Beef
2019 price c. $2,200/t
+$190 (45%)
Rice
2019 price c. $420/t
Carbon regulation map
Source: The World Bank, Carbon Pricing Dashboard (maintained in collaboration with ICAP)