Carbon pricing – a system whereby companies and governments put a price on their carbon emissions with the broad goal of tackling the effects of climate change – is not dead in the water, according to the CEO of food supplement firm Royal DSM.
“I would even say the opposite,” Feike Sijbesma told CNBC on Tuesday, adding that China was set to introduce a price on carbon nationwide at the end of 2017.
“More than 5,000 companies in China will fall under the carbon pricing regime by the year end,” he said.
According to the World Bank, there are two main ways of pricing carbon. This can be done using emission trading systems (ETS) which cap the level of carbon emissions and allow low-emitters to sell their additional allowances to higher emitters. Alternatively, a carbon tax can be used.
Sijbesma explained that Canada, Sweden and California had all introduced a price on carbon, while Mexico was considering one.
“I would even say to companies: If you don’t want to create your own ‘Kodak moment’, and if you want to future proof your business, I’d rather stimulate companies to put a price on carbon internally already, right now, like we do,” he said.
Sijbesma went on to reference the landmark Paris Agreement. At the beginning of June, President Donald Trump announced the U.S. would withdraw from the agreement and commence negotiations to re-enter or renegotiate a brand new accord.
“Even if one country – although be it big – is stepping out of this … We will implement Paris and we have to,” he said. “And I think many companies are investing in the ‘green stuff’ already today.”
Almost 1,000 companies around the world already had an internal price on carbon, with DSM setting itself a price of 50 euros ($57.76) per ton, he added.