The founders of the Call on Carbon initiative – Climate Leadership Coalition (Finland), Haga Initiative (Sweden) and Skift Business Climate Leaders (Norway) – and several signatories of the call hosted a meeting on June 2, 2022 during the Stockholm +50 conference on how global organizations view carbon pricing and how to collaborate more effectively. The main conclusions were that the demands for effective carbon pricing is increasing and via better public-private collaboration major improvements would be achievable.
“The climate investments, coming primarily from the private sector, must be at least tripled and ideally five-folded immediately. Ramping up investment with effective carbon pricing must be one of the main themes at COP27.,” said Paul Polman, author, investor and a former CEO of Unilever in his opening speech.
“Carbon pricing instruments need to be designed very carefully and international consistency is now the key. All governments must work closely with businesses on carbon pricing matters pre COP27”, said John Denton, Secretary General, International Chamber of Commerce.
Call on Carbon team analyzed carbon pricing recommendations by OECD, IMF, WTO and WEF on and noticed that the organizations have several shared views on the main elements of low carbon transition:
- Paris Agreement goals create a relevant frame for emission reductions, transition should be just and fair,
- carbon pricing around 50-100 US$ / ton of co2 is the main element of the fast transformation and
- complementary policies are part of the effective package.
“Businesses will be disappointed if governments do not push through with carbon pricing. Firms that have been planning and investing on the expectation of pricing would essentially be let down. International coordination and inclusivity are very important in going forward in carbon pricing. We need all big emitters to be on board which is likely to require differentiated carbon prices for emerging and developing countries. This effort cannot be just an exclusive club for countries already working on carbon pricing”, said James Roaf, Assistant Director, International Monetary Fund.
“Next six months are very critical times for carbon pricing. Today, less than 25 percent of global greenhouse gas emissions are covered by carbon pricing initiatives, and only a fraction of those within the recommended range in the Paris Agreement”, said MariaMendiluce, CEO, We Mean Business Coalition.
“Green investments must be ramped up 3-10 fold and 70 percent of the investments should come from the private sector. Were private investors to trust that during the coming decades there will be long-term climate policies in place and CO2 prices will remain at a certain level, it would have major effects even today and lead to large numbers of new projects being initiated during the coming years”, said Tuuli Kaskinen, CEO, Climate Leadership Coalition, the initiator organization of the Call on Carbon campaign.
Direct fossil fuel subsidies are worth five times the revenues raised by carbon pricing, and the indirect costs of burning fossil fuels and the impacts of climate change are a 65 times greater. To reach scale within sustainable markets, we must re-orientate economic subsidies, financial incentives and supporting regulation and implement a decade-long transition towards long-term incentive structures. This would have a major transformative effect on our market systems.
The revenues generated from any carbon pricing applied will ideally be invested in sustainable transition efforts, the green economy, green technology development and natural capital, as well as support a just transition for affected workers and farmers, families and communities.
We are only one investment cycle away from 2050, and this is likely to be the last chance to get policies right. The signatories of the call urge governments to act on this during 2022, and in doing so support COP27 in Sharm el-Sheikh and make the conference a true game changer.
More information: Tuuli Kaskinen, Chief Executive Officer, Climate Leadership Coalition, +358 505149752, email@example.com, Nina Ekelund, Executive Director, Haga Initiative, +46 735022464, firstname.lastname@example.org, Bjørn K. Haugland, Chief Executive Officer, Skift Business Climate Leaders, +47 97687315, email@example.com
What is Call on Carbon?
Nordic climate business networks Climate Leadership Coalition (Finland), Haga Initiative (Sweden) and Skift Business Climate Leaders (Norway) launched in February 2021 global Call on Carbon initiative to urge governments ramp up climate investments and effective carbon pricing.
By June 2022 leaders from 145 businesses, cities and universities have signed the call. The signatories include also business associations and networks: the International Chamber of Commerce representing 45 million companies in over 130 countries, the We Mean Business Coalition which works with businesses and investors with a market cap close to USD 25 trillion, UN PRI whose members have over USD 120 trillion assets under management, Copa-Cogeca, representing 22 million farmers and 22 000 agri-cooperatives and Orgalim, Europe’s Technology Industries comprised of 770,000 companies.
The signatories of the call convened on June 2, 2022 in Stockholm, Sweden during the Stockholm+50 conference to discuss about the main gaps and challenges in carbon pricing and climate investments. In he meeting it became evident that the Call on Carbon initiative must carry on and keep up building the momentum as the COP27 in Sharm el-Sheikh, Egypt is less than six months away.
The signatories of the Call on Carbon urge governments to:
- Back their net zero targets with effective, robust, reliable and fit-for-purpose carbon pricing instruments, consistent with the Paris Agreement, to facilitate a cost-efficient investment path to reach net zero emissions;
- Align their carbon pricing instruments where appropriate to create a stable and predictable investment environment; and
- Finalise the rules for international market mechanisms under Article 6 of the Paris Agreement to support cost-effective mitigation efforts, create a level playing field and minimise carbon leakage while enabling greater ambition.