The business of pricing carbon: how companies are pricing carbon to mitigate risks and prepare for a low-carbon future

Increasingly, companies across sectors and geographies are turning to an internal carbon price as one tool to help them reduce carbon emissions, mitigate climate-related business risks, and identify opportunities in the transition to a low-carbon economy. Establishing a carbon price across a company can help internalize the cost of greenhouse gas emissions by assigning a monetary value to each ton emitted. The brief describes the business case for internal carbon pricing, the different internal carbon pricing approaches used by companies, and key lessons learned, including: the multiple business benefits of an internal carbon price, the importance of embedding the price in a company’s business strategy, and the benefits and challenges of different types of pricing strategies.