25 May 2024

Putting a price on carbon

| The European |

Climate change need to be solved with the tools at our disposal today, not with super technology decades down the line, writes Renat Heuberger, CEO of South Pole

As the latest report from the IPCC points out, the odds of holding off high levels of future rises in temperature are evaporating before our very eyes. Scientists warn of the catastrophic events that global warming over 2 °C  will entail, and we are inching slower to that limit every day. But the report also makes clear that it is not too late to prevent the worst, and that every fraction of a degree counts.

It is time for every part of society finally to take climate change seriously. For too long, the private sector has blamed governments for inability to agree on a global policy framework and solid commitments, and governments blame companies for continuing to spew out deadly emissions, without any care for future generations.

Also, too much hope has been placed on future technological solutions. What are these? Big machines that suck CO2 out of the air, and miraculously solve all of our problems. Or shading the Earth from the sun’s heat by injecting the stratosphere with reflective aerosols. These are ideas that not only are more expensive than the simple solutions we already have at hand, but they are not ready today. What the IPCC report made perfectly clear is that reductions have to be made today  –  in a big way.  

Behavioural change

What needs to happen urgently is that major emitters  – and most of the global greenhouse gas emissions are from energy and transport  – must dramatically change the way they do business to lower emissions. This requires users to change their behaviour to pressure energy suppliers to switch their sources of energy from fossil fuels to renewable energy.

It also requires that people vote in politicians who are willing to remove fossil fuel subsidies and re-direct them towards cleaner energy sources. It demands financial institutions to stop financing fossil fuel projects and take a hard look at the investments they already have in their portfolios.

It also requires a myriad of smaller changes, but if we can at the very least change the way energy and transport are fuelled, we have come a long way in lowering emissions.

Helping you take responsibility

South Pole is the leading climate solutions provider globally and we have developed a Climate Journey that guides our clients in identifying their emissions, helping them become climate leaders, and take advantage of climate investment opportunities. A great starting point is when companies take responsibility for their emissions through the purchase of offsets.

By buying offsets, you are immediately “putting a price on carbon” which essentially means that you see what your emissions are costing your business. This becomes an immediate incentive to lower emissions or continue to pay an ever increasing price for them (as the cost of carbon credits goes up). At the same time, buying offsets directs needed financing to projects that are lowering emissions today, but need the money to get off the ground or to get implemented – these are projects that usually don’t get loans in local capital markets. At this point, and for the foreseeable future, carbon credits are the only existing, proven, transparent and scalable result-based-finance instrument, which has the potential to transform projects like forest conservation, mangroves replanting, or climate-smart agriculture today.

And finally, we need to switch the lens through which we view the world. Historically, we have judged the world through a financial or political lens. But a summer of climate calamities has shown us that climate change affects us all and we need to look at the world through a climate lens. This means: when we talk about economic development, we need to judge how that development will affect climate change but also, how will climate change affect our development?

I hope that what we are finally realising  – as our cars are swept away in floods across Europe and our houses go up in flames across the US  – is that climate change is a crisis right now, not in the distant future, and it affects communities large and small, rich and poor, and every facet of economics and politics.

About the author

Renat Heuberger

Renat Heuberger is the CEO of South Pole, an award-winning project developer and leading provider of global climate solutions. Prior to founding South Pole, Heuberger co-founded and acted as the CEO of the myclimate foundation, one of the world’s first players in the voluntary carbon market space. Supporting a global network of connected communities, Heuberger is considered an authority on climate change, carbon markets and sustainable development. 

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