MARKETS

Carbon emissions trading not enough to meet Stern reductions: ICF

CONSULTING firm ICF International has completed a scenario-based analysis of the likely impacts on carbon prices from increasing the sectors and geographic regions covered by a linked global cap-and-trade regime post-2012.

Angie Tomlinson
Carbon emissions trading not enough to meet Stern reductions: ICF

The recently released Stern Review: The Economics of Climate Change established that a global carbon price is an essential foundation for climate change policy.

The European Union Emissions Trading Scheme (EU ETS) has begun to provide a clear price signal in Europe and other regional trading schemes are now being mooted around the world including in the Northeast United States, California and Japan, ICF said.

“We have observed that over the period 2013-2020, widening the sectors and geographies subject to emissions caps may not necessarily provide the sustained high carbon price signal required to shift decisions towards low-carbon technology investments,” ICF London managing director Abyd Karmali said.

“The reason this occurs is twofold. First, in OECD countries substantial low-cost emission abatement opportunities are available in sectors not currently subject to a cap.

“Second, in scenarios where key emerging markets like India, China and Korea take on caps, the global carbon price actually drops from the current €10-15/tonne CO2e range seen in the EU ETS because of the widespread, low-cost emission abatement opportunities available, as evidenced by the surge in demand for low-cost, Kyoto-compliant carbon credits from developing countries.

“The results of our scenario analysis imply that we risk locking in a highly carbon-intensive infrastructure in the period 2013-2020, particularly in the energy sector in the fastest growing emerging markets.

“In short, carbon emissions trading will be necessary, but insufficient to achieve the scale of emission reductions at the speed suggested are warranted by the Stern Review.”

ICF completed the analysis using its in-house International Carbon Pricing and Integrated Planning Model.

TOPICS:

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining Monthly Intelligence team.

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining Monthly Intelligence team.

editions

Mining Magazine Intelligence Exploration Report 2024 (feat. Opaxe data)

A comprehensive review of exploration trends and technologies, highlighting the best intercepts and discoveries and the latest initial resource estimates.

editions

Mining Magazine Intelligence Future Fleets Report 2024

The report paints a picture of the equipment landscape and includes detailed profiles of mines that are employing these fleets

editions

Mining Magazine Intelligence Digitalisation Report 2023

An in-depth review of operations that use digitalisation technology to drive improvements across all areas of mining production

editions

Mining Magazine Intelligence Automation Report 2023

An in-depth review of operations using autonomous solutions in every region and sector, including analysis of the factors driving investment decisions