ALLCOT Group presented “SDG Co-Benefits in Voluntary Carbon Offsetting” as part of CPLC Technical Workshop in Washington D.C
The workshop “SDG Co-Benefits in Voluntary Carbon Offsetting” was presented by Sergi Cuadrat, Chief Technical Officer of ALLCOT Group as part of the Carbon Pricing Leadership (CPLC) Technical Workshop for the 4th Annual CPLC High-Level Assembly (HLA) organized by Gold Standard, WWF and WRI at Embassy of Canada on April 12th 2019 in Washington, D.C.
In 2015, leaders from the member states of the United Nations agreed on objectives to shift all economies and societies toward sustainable and decarbonised development through the adoption of the Agenda 2030 on the Sustainable Development Goals (New York, September 2015) and the Paris Agreement on limiting climate warming to well below 2ᵒC (Paris, December 2015). Both frameworks, although negotiated under different multilateral processes, promote the participation of all countries and are highly interlinked: the Paris Agreement emphasizes the need for sustainable development considerations in low-carbon transitions; at the same time avoiding dangerous climate change is one of the 17 Sustainable Development Goals (SDGs) defined in the 2030 Agenda on Sustainable Development. Thus, failure in one process could undermine the success of the other. The implementation of Nationally Determined Contributions (NDCs) –countries’ emissions reduction commitments– requires huge investments, which are more likely to be financed if embedded in and benefiting national development plans. While, vice versa, prospects for sustainable development depend on a limitation of global warming.
Sergi Cuadrat emphasized that such interdependency can be seen as an opportunity to move away from the discourse of two different agendas that are often perceived to be in competition; and instead pursue their implementation in a way to maximise mutual benefits. The 2030 Agenda for Sustainable Development will not be achieved without the commitment of the private sector and at the same time, companies are demonstrating their willingness to ramp up sustainability action by aligning not only their corporate social responsibility policies, but also their core business strategies, with the targets defined in the SDGs. To achieve these, clarity is required to give business the confidence to embrace the SDGs, as it can be difficult to understand how investments in development activities can have greater impact and help achieve the necessary transformation towards alignment with the SDGs.
ALLCOT is seeing an evolution in the way its clients think about carbon finance and the additional impacts their carbon investments can have so businesses are able to articulate the benefits of their carbon project investments beyond the verified emission reduction. Sergi Cuadrat stated that “businesses can use carbon finance to deliver additional value through alignment with the SDGs, enabling the voluntary carbon market to extend beyond emission reductions, and play a vital role in driving low carbon sustainable development throughout the world”.
In order to assist business in measuring their SDG baselines and to measure future progress, Sergi Cuadrat unveiled that ALLCOT is developing an open-source SDG Quantification Methodology which aims to establish the measurable co-benefits of the SDGs as an operational tool in development activities to ensure a fair carbon price. The tool will include recommended approaches for the formulation of targets and decision-making pathways based on the individual needs of an organization to measure and report on the impacts of sustainable development actions, including its use in the carbon markets, business supply chain, city-scale interventions or NDC assessments. Although still under development, the design of the tool will consider how to reduce the barriers to measure, quantify and certify SDG impacts, including IT based platforms and blockchain-based solutions.
Pricing carbon, through a carbon tax or cap-and-trade system, has proven to be effective in addressing climate change and can be an essential tool for meeting the SDGs. Therefore, ALLCOT firmly believes that carbon pricing policies should be designed to help achieve the global sustainable development agenda to benefit the fight against climate.
Carbon Pricing Leadership Report
On the other hand, the Carbon Pricing Leadership Coalition (CPLC) has published Carbon Pricing Leadership Report, where ALLCOT Group has participated. This report acts as CPLC’s 2018/19 annual report, providing an update on CPLC’s activities over the last year. It also showcases articles from thought leaders to inspire and guide government and business leaders to increase their carbon pricing ambition.
You can read the full report here and ALLCOT Group contribution in page 56.
ALLCOT Participates in Carbon Pricing Leadership Coalition (CPLC) Annual Assembly at World Bank Spring Meetings
As heads of state, policymakers, business leaders and civic institutions gathered in Washington D.C. for the World Bank Spring Meetings, ALLCOT joined the Carbon Pricing Leadership Coalition (CPLC) for its 3rd annual High-Level Assembly (HLA) in Washington D.C. ALLCOT has been a member of CPLC since its inception in 2015. Kevin Fertig, ALLCOT’s Director of Business Development for North America, joined other leaders in the global carbon markets to assess the progress made in expanding and deepening carbon pricing policies in the past year.
In the HLA, World Bank President Jim Yong Kim emphasized that carbon pricing is the most critical tool for countries to achieve their Paris commitments to mitigating climate change. Carbon pricing, often taking the form of a carbon tax or cap-and-trade scheme, is the approach favored by most economists and business leaders to reducing global greenhouse gas (GHG) emissions. To date, it has been implemented in 42 countries and 25 subnational jurisdictions, including Canada, California, Europe and most recently China.
Carbon pricing also brings value to businesses: nearly 1,400 companies with a combined $7 trillion in revenues have set an “internal carbon price” as a means of assessing climate risk and driving company decision-making toward sustainable investments. Royal DSM CEO and CPLC Co-Chair Feike Sijbesma called it the best method for “future-proofing companies because the future is coming anyway.”
Despite this recent progress, Christine Lagarde, Director of the International Monetary Fund (IMF), emphasized that current average carbon prices (<$10 / ton) are still far too low; countries may need to reach a carbon price of $70 / ton by 2030 to stay on track with their commitments under the Paris Agreement. Economists and climate scientists generally agree that a price range of $40-80 will be needed by 2020, and $50-100 by 2030 – and for pricing policies to cover a much greater percentage of global emissions than today (15%). This points to the need for both governments and companies to both establish and raise carbon prices in the near future.
To build traction, the CPLC emphasized the need to improve communications on the diverse benefits of carbon pricing, and more directly engage the industries most impacted by the transition to a low-carbon economy.
Several suggestions were made on both points. To bolster communication, the HLA committed to:
- Increasing transparency on how countries will use the revenues from carbon taxes or the sale of carbon allowances
- Ensuring that these revenues promote countries’ other development goals (like community health and education)
- Highlighting early successes
- Holding town-hall-style meetings to communicate these policies to the public (and youth in particular)
- Positioning carbon pricing as an essential component of each country’s broader climate policy
- Engaging a broader coalition of corporate and civil sector leaders.
To address the concerns of businesses worried about the impact of carbon pricing on competitiveness, the CPLC agreed to:
- Increase collaboration between international carbon markets (such as the formal linking of California’s market with Ontario’s and Quebec’s) as a means of standardizing practices and prices across regions
- Establish clear market signals about rising prices over time to increase predictability
- Recognize the social stresses inherent in the transition to a low-carbon economy, directly engage affected communities and industries, and ensure that they are key partners in the conversation moving forward
- Provide industries with the tools and best practices for them to effectively plan for decarbonization
For its part, ALLCOT pledges to continue engaging businesses and governments on opportunities for climate leadership, including setting an internal carbon price. Many of ALLCOT’s clients already do so by investing in carbon neutrality; CPLC suggests that the purchase of carbon offsets is akin to setting an “implicit carbon price” within a company. Companies can extend the price they use for offsets as a means of estimating their carbon impacts throughout the decision-making process for their operations and investments. This provides an opportunity for greater integration of sustainability within our clients’ business practices, and a new way for them to engage their stakeholders as national carbon regulations gain traction.
To that end, on the last day of the conference, ALLCOT participated in working sessions focused on carbon pricing for several key industries and regions – notably in the banking, maritime and higher education sectors, and in developing a harmonized approach to carbon pricing across the Americas. Inspired by the progress made in only a few short years, in collaboration with CPLC, ALLCOT will continue to help guide organizations through the roadmap to Paris and a sub-2 degree future.