Consumer products, Manufacturing, Printing and publishing, Canada Quantifying the financial impact of emerging carbon pricing
EEM surveyed the current and emerging carbon pricing regulations applicable to the company’s operations in a dozen jurisdictions, across Canada and in the US, and estimated the direct financial impact for the coming year.
Approach and Solution
Whether through a carbon tax or a cap and trade program, 90% of Canada’s economy already has a price on carbon in effect or in development. The remaining jurisdictions will need to follow suit by 2018 to meet the federal government’s new directive announced in October 2016.
For this study, EEM reviewed the different legislation in place or in advanced development for all the jurisdictions where the company has operations and estimated the carbon cost based on the consumption of fossil fuels. Indirect costs (related to use of electricity generated from fossil fuels) were included where available.
The final tally for the coming year was not inconsiderable and is set to increase as the cost of carbon rises from $10 per tonne to $50 per tonne by 2022. The review also highlighted how estimates for the company’s operations were just a portion of the future carbon cost to be paid by the company as many of its suppliers and transporters will also be affected. This life-cycle thinking will influence the company’s operational optimisation to achieve carbon and cost savings along the whole value chain. Energy and waste reduction initiatives are already underway.