We asked several Anthesis experts to comment on sustainability trends and topics that are emerging, changing and impacting businesses, cities and governments globally for our 2019 sustainability predictions series. In our third video, Consultant Polly Stebbings discusses the carbon price dilemma. #AccordingtoAnthesis
What are some big changes we’re going to see in 2019?
Just this year the European carbon price went over 20 euros per tonne, which is the first time it’s happened since 2008. And the big change is that in early 2019 the EU Emissions Trading Scheme (ETS) will be implementing their market stability reserve and this will see big changes next year as well as the changes that we’ve already seen leading up to it.
What should businesses be doing as a result of this change?
Power generation is heavily impacted by the carbon price so energy prices will rise, and businesses around the world need to be aware that the price of emitting carbon will also increase for them, both directly in their operations and indirectly in their supply chains. However it’s not all doom and gloom because there is a positive in this – projects such as carbon reduction and energy reduction projects are likely to become a lot more viable.
Is there any legislation or regulation that businesses should be aware of?
The EU ETS will be implementing their market stability reserve in early 2019 and this will see the over-supply of carbon allowances being reduced by up to a quarter to 2023. And globally what we’re seeing is more and more countries implementing their own emission trading schemes, for example China and Argentina. China will be implementing [officially] their scheme in 2020, and it’s going to be the biggest carbon market in the world.
What changes should consumers expect to see?
The carbon price mechanism is a way to reduce carbon emissions so we can only expect that the carbon price will rise and currently the carbon price is around 20 euros per tonne, but for us to align with the Paris Agreement it needs to be about 45 euros per tonne.
How can businesses, cities and governments reduces their exposure to an increase in carbon price?
The goal is to reduce carbon emissions. This could involve looking back at previous carbon and energy reduction projects that are now becoming a lot more commercially viable because of the carbon price increase.