Putting a price on carbon – A call for action!

New York Climate Summit: a unique opportunity for real influence

The forthcoming United Nations Secretary-General’s Climate Summit in New York on 23 September will gather heads of states and governments from all over the world. After the Copenhagen Climate Summit in 2009, this is the first time that global climate policy regains political attention at the highest level. For Nordic countries – with our high-level political and business representation at the Summit and with our ambition of “leading-by-example” – it is time to have a strong voice and to take this real chance to influence the global climate policy.

Price on carbon: a game-changer for low-carbon investments and a level playing field

Carbon pricing and price-driven market approach are very high on the Summit agenda. The World Bank’s initiative of “Putting a Price on Carbon” has already gathered wide support being one of the key themes in New York. While the challenges of climate change faced by our ecosystem and economy are greater and more urgent than ever, we are simply not on the right track. According to the International Energy Agency IEA (2014), the annual fossil energy related capital expenditure has more than doubled during 2000–2013 and more than 60% of the total investments in energy supply in 2013, i.e. US$1 trillion out of US$1.6 trillion, were fossil energy related.

Continuing “business as usual” and implementing already agreed improvement actions (IEA’s New Policies Scenario) to 2035, the global energy supply investment is expected to reach around US$33 trillion, i.e. US$26 trillion in fossil fuel extraction, transport, oil refining and fossil power production, but only US$7 trillion in low-carbon power generation – renewables (US$6 trillion) and nuclear (US$1 trillion). Getting the world on a 2°C emissions path would mean a fundamentally different investment landscape and a breakthrough at the Paris 2015 COP. We need to turn investment flows away from fossil energy and direct them towards low-carbon and clean energy – with scale and speed. But this will not be possible without a price on carbon, which gives the right incentives – and a level playing field, between fossil fuels and renewables, and between forerunners and laggards.

A call for a joint Nordic voice for a price on carbon

In the run-up to the Climate Summit in New York, we, representatives from the business sector and the civil society, are calling for a joint Nordic voice for supporting this initiative of “Putting a Price on Carbon”.

We need a price on carbon as a key element of the long-term regulatory framework. We need a price on carbon to drive structural transformation and to stimulate innovation. In a world constrained by scarce resources, changing climate and limited public finance, business engagement and private investments in low-carbon transformation are more crucial than ever. A technology-neutral carbon price will provide the much-needed business guidance and predictability for long-term investments and fair competition. Let us take this long-awaited and unique opportunity to create a political momentum and the market conditions – for transformational and real changes.

It is possible – with a combined political and business leadership  

Nordic countries are the first movers to set prices on carbon. Nordic businesses, with our sustainability- and innovation-driven mindset and capacity, have shown that it is possible to reconcile sustainability and competitiveness of our businesses. But “leading by example” alone is not enough for actions of sufficient scale and speed – unless we can bring more likeminded countries and companies on board. The Nordic business sector can do more and wants to contribute more in the global markets. But we need stable and long-term policy frameworks as well as market conditions that create incentives, predictability and fairness for low-carbon business and investments. We stand ready to contribute to the growing global momentum toward incorporating the price of carbon as a key element in future global climate negotiations and actions. For us, putting a price on carbon has been, and will continue to be the driver for taking climate leadership, creating industrial competitiveness and enhancing global collaboration.

Join us – and support the initiative led by the World Bank 

World Bank has launched an action to gather wide support for the Carbon Price initiative. Further information can be found at: http://www.worldbank.org/en/programs/pricing-carbon. Through the statement, to be launched at the UN Secretary-General’s Climate Summit in September 2014, countries and companies are announcing their support for a price on carbon, demonstrating the leadership by taking action, and encouraging others to join this global carbon price agenda. The initiative is flexible, not giving preference to any particular pricing instruments. Various tools can be used for setting prices on carbon, such as tradable allowances, carbon taxes, and/or payments for emission reductions.

The founders of Climate Leadership Council (CLC); Caverion, Fortum, Kemira, Kone, Neste Oil, Outotec, St1 and Sitra; and recently joined Gasum, Kemira and Nokia, have expressed their support for the initiative together with the Global Utmaning and Nordic Action Group. We encourage companies and actors from the civil society in the Nordic countries to do the same before the New York Climate Summit on 23 September. Now is the time to act. Let’s have a strong Nordic voice!

Register your support to the initiative: http://form.jotform.us/form/41896121457156 

Additional information

Jouni Keronen, Executive Director, Climate Leadership Council
Tel. +358 50 453 4881, jouni.keronen@h2t.fi

Nannan Lundin, Head of Secretariat of Nordic Action Group
Tel. +46 (0) 76 872 2200, nannan.lundin@globalutmaning.se