* Businesses and investors call for global carbon pricing
* Carbon dioxide pricing key for encouraging emission cuts
* Existing pricing regimes vary widely
* IMF estimates global average CO2 price is $3 a tonne
* OECD estimates it needs to cost $147 a tonne before 2030
Oct 6 (Reuters) - A cynic, wrote the Irish wit Oscar Wilde,
is someone who knows the price of everything and the value of
But at COP26, the climate talks starting in Scotland in just
over three weeks, establishing a global price for carbon might
be the only way to show the true value of the planet.
A global pricing mechanism for carbon dioxide emissions
could make polluters, and maybe their customers, acknowledge and
pay the full environmental cost of the oil and gas that drives
the wheels of industry and the lifestyles of many consumers.
Many countries have committed to a goal of "net zero"
emissions by 2050 to avert the worst of global warming.
But without putting a price on CO2, it is hard for
governments to force polluters to cut emissions without
disadvantaging them unfairly, for investors to assess their
risks, or for companies to know what costs lie ahead.
"Please put a price on carbon!" was the plea https://reut.rs/3iFsmP8
to COP26 from Francesco Starace, chief executive of Enel
, Europe's biggest utility, speaking on Tuesday at the
Reuters Impact conference.
COP26 aims to secure far bolder action from the nearly 200
countries that signed the 2015 Paris Agreement to try to limit
global warming to 1.5 Celsius, and a global carbon price is one
of the mechanisms they hope will help achieve that.
Bob Dudley, former head of oil company BP and now
chair of the Oil and Gas Climate Initiative trying to help the
fossil fuel industry decarbonise, said a proper valuation of
emissions was one of his group's five main goals.
Theodor Swedjemark at European power engineering group ABB
said "aligning carbon-based trade policies" was one of
the business community's main requirements from COP26.
The need is clear.
The European Union, where a tonne of carbon dioxide on its
Emissions Trading System costs about 60 euros ($69), plans to
introduce a carbon levy on imports to shield its own industry
from competitors whose emissions are taxed less heavily.
The World Bank says only 22% https://reut.rs/3iFq0Qp of
global emissions were covered by pricing mechanisms last year
and the International Monetary Fund put the average global price
at a mere $3 a tonne.
Yet the OECD estimates that a price of $147 is needed before
2030 to create enough economic incentives for producers and
users of fossil fuels to slash emissions to net zero by 2050.
The challenge of finding a solution at COP26 that can work
on an agreed basis for industrialised and developing economies
alike will be huge.
"We have to apply carbon pricing as part of our economics,"
Tengku Muhammad Taufik, chief executive of Malaysian state
energy firm Petronas, said at the Reuters conference.
But he noted that carbon was priced at only about $5-10 a
tonne in southeast Asian economies, compared with over $130 in
Sweden at the other end of the spectrum.
"One of the key things at ... COP26 ... is going to be a
need to standardise, to verify, to account for this."
Starace said the important thing was to get started.
"Put the price on carbon in your own territory ... and then
worry about how that carbon price relates to the other carbon
prices," he said. "But price it - because if you start with
that, then this will finally adjust."
Institutional investors and asset managers would also
welcome https://reut.rs/3AiAXgS any progress.
They are already having to create tools to assess the
growing environmental risks to their investments, from climate
disasters to new regulations, to "stranded" fossil-fuel assets
that may never be recovered and shifting consumer sentiment.
At least now, especially after a series of violent weather
events showed the dramatic effects of climate change, there is
little argument that saving the planet is as much an economic
imperative as an environmental ideal, investors say.
"It became quite simple for us when we started to see that
climate change is a risk to our ability to deliver on our
financial commitments," said Morten Nilsson, chief executive of
BTPS, Britain's largest private-sector pension scheme with over
50 billion pounds ($68 billion) of assets.
"Actually, we see opportunities in this change to a
low-carbon economy ... and if we don't attack those the right
way, we could be a loser instead of a winner."
As Wilde might say: not just a price, but also a value.
To catch up on the Reuters Impact conference, please
register here: https://reutersevents.com/events/impact/
(Reporting by George Hay, Jon Harman, Stephen Jewkes, Liam
Dowd, Gavin McGuire and Florence Tan; Writing by Kevin Liffey;
Editing by David Clarke)