Asset owners managing $6 trillion call for global carbon pricing Reuters

Authors: Susanna Twidale and Simon Jessop

LONDON (Reuters)-On Tuesday, investors with more than $6 trillion in assets under management called for a global coordinated carbon price, stating that by 2030, emissions costs will need to be nearly tripled to achieve global climate goals.

The call for the Alliance of Net Zero Asset Owners comes before the next round of global climate negotiations in November. The 43 members of the alliance include some of the world’s largest pension plans and insurance companies.

A report by the World Bank in May stated that about 64 carbon pricing tools, such as emissions trading schemes or taxes, are currently being used globally, which account for only 21% of global greenhouse gas emissions.

But even in these plans, prices can vary greatly.

This piecemeal approach makes it difficult for global investors and companies to manage risk and make long-term planning, especially in the development and adoption of new technologies needed to accelerate the low-carbon transition.

In view of this, and hope to limit global warming to 1.5 degrees Celsius higher than the pre-industrial standard, which is the goal of the Paris Climate Agreement, the organization recommends a hybrid model between emissions trading schemes and taxes or levies.

Specifically, the organization stated that it supports setting a minimum price for carbon, which will tend to be higher over time, provide investors with certainty, and provide protection against price collapses, and provide the highest price To prevent price spikes.

Charles Emond, President and CEO of the Canadian Pension Plan Caisse de dépôt etplacement du, said: “Providing clear economic signals and more predictive carbon price corridors will provide companies with the necessary resources to make informed investment decisions. Global environment.” Quebec (CDPQ).

According to OECD data, if the world wants to achieve net zero carbon emissions by 2050, it will need a price of US$147 per ton by 2030, which is almost three times the current price of US$59 per ton in the EU Emissions Trading System.

Günther Thallinger said: “The non-returning and income-neutral carbon pricing tool — cross-border coordination — will not only release large-scale investment in renewable energy systems on a global scale, it will also promote industries from construction to transportation. The industry is in urgent need of transformation,” Allianz (DE:) SE Management Committee member and chairman of the Net Zero Asset Owners Alliance.