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December 09, 2013
Early carbon pricing by mega-corps

The CDP (formerly the Carbon Disclosure Project) reported that 29 major publicly traded U.S.-based companies have placed internal per ton prices of between $6 and $60 on their carbon dioxide equivalent (CO2e) emissions. 

Carbon pricing (also called shadow pricing) is voluntary, and the companies stated that they have taken the actions to consider both potential risk and business opportunities as evidence mounts that human activity is exacerbating climate change and as economywide regulatory limits on greenhouse gases (GHGs)  in the United States  become more likely. 

Companies cited in the report span all sectors of the economy, says the CDP, and include seven electric power utilities, eight petroleum companies as well as industrial manufacturers, three information technology companies, and a chemical company.   Of the companies, 27 are listed in the S&P 500 while the other 2 are foreign-based.

Business planning

The companies state that placing a price on CO2e emissions is a necessary planning measure.  This would be true even without being faced by regulatory emissions limits since carbon pricing can be a strong motivation for early technological innovation that may provide an advantage over competitors.  Carbon pricing can also be an element at multiple levels of corporate decision making, including revenue opportunities, energy-efficiency, and capital investment, says the CDP.

Energy companies and utilities tended to place a higher price on emissions since these entities are most likely to be regulated in the United States.  For example, the CDP reported Exxon Mobil Corporation’s carbon price at $60, BP’s at $40, and Ameren Corporation’s at $30.  Among the companies that priced carbon at the low-end were Microsoft at $6–$7, Google Inc. at $14, and Walt Disney Company at $10–$20.  Some companies disclosed that their prices were flexible and subject to review and change.  Other utilities and energy companies cited in the report admitted to pricing carbon but would not reveal the amount.  

International operations

“Companies that have international operations are especially astute to carbon pricing as a response to the regulatory environments in which they operate, such as Europe or Australia, where GHG emissions reductions are mandatory and covered by mandatory cap-and-trade programs or carbon taxes,” said the CDP.

A CDP press release and access to the full report.

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