MODULE 3

CARBON MANAGEMENT CONCEPTS

Shelley Zhou

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Module 3 - Outlines
• M3-1 Carbon Trading and Carbon Offsetting (L8)
• M3-2 Carbon Management Framework (L9)
• M3-3 Net Zero and Carbon Neutrality (L10)

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 LECTURE 8
CARBON TRADING AND CARBON
OFFSETTING

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 Agenda

Carbon Pricing
Carbon Markets: Compliance vs Voluntary
Carbon Credits and Carbon offsetting

Carbon Tax and ICP

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Agenda

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Carbon Pricing
• To put a price on carbon pollution as a means of
bringing down emissions and driving investment into
cleaner options

• External cost of carbon

• Emission trading systems
• Carbon taxes
• 47 national jurisdictions
• 36 subnational jurisdictions
• In 2022, 11.86GtCO2e (23.17%)

• Internal carbon pricing

• Setting an internal charge on the amount of carbon
emitted from assets and investment projects, which
businesses can then factor it into investment decisions and Source: https://carbonpricingdashboard.worldbank.org/map_data

business operations
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What is Trading
• Trade involves the transfer of the ownership of goods or services from one person
or entity to another in exchange for other goods or services or for money.
• A network that allows trade is called a market.

Picture from www.carbonsolutionsglobal.com

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 Emergence of Carbon as an Asset
• Net Zero Targets

• In order to limit warming to 1.5°C, net global CO2 emissions need to reach net zero by around 2050, i.e. around
40Gt, not including non-CO2 GHGs
• Over the period 1850–2019, a total of 2,390 ± 240 (likely range) GtCO2 of anthropogenic CO2 was emitted.
Source: IPCC, 2021: Summary for Policymakers. In: Climate Change 2021: The Physical Science Basis. Contribution of Working Group I to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change. 8
Emergence of Carbon as an Asset
• Common but Differentiated Responsibilities

Millions of tonnes of cumulative CO2 emissions from the US, EU, China and India between 1850 and 2030. Sources: Carbon Brief analysis of countries’ climate pledges (see methodology below) and
figures from the World Resources Institute CAIT climate data explorer and the BP Statistical Review of World Energy 2015. Chart by Carbon Brief.
More data from: https://www.carbonbrief.org/analysis-which-countries-are-historically-responsible-for-climate-change 9
 Benefits of Emission Trading

Effectiveness Efficiency Integration

Track record on past emission trading e.g. Emission trading could reduce the reduction Finance and technology flow into the
SO2 and NOx showed great effectiveness in cost emerging market
emission reduction in lack of regulations

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Agenda

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 Type of Carbon Markets
1. Emissions trading system (ETS) is a
system where regulated entities Global carbon markets
can trade emission units to meet
their emission targets. An ETS
establishes a market price for GHG
Type of Compliance market:
emissions. Voluntary carbon market
market Emission Trading
• Cap-and-trade/ quota- (VCM)
System (ETS)
based/ allowance systems,
which apply a cap or
absolute limit on the emissions
within the ETS and emissions Cap-and- Baseline-
allowances are distributed trade and-trade
• Baseline-and-trade/ systems,
where baseline emissions … and more
levels are defined for
individual regulated entities
and credits are issued to Examples of
entities that have reduced trading
their emissions below this level. scheme

2. Voluntary Carbon Market (VCM)

Name of that EUA CER ERU
designates the GHG emission
European Union certified emission emission
reductions from project- or carbon credit reduction reduction unit
Allowance
program-based activities, which
can be sold either domestically or https://carbonpricingdashboard.worldbank.org/what-carbon-pricing
in other countries https://www.sciencedirect.com/science/article/abs/pii/S0959652618340290
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https://unfccc.int/process/the-kyoto-protocol/mechanisms/emissions-trading
Compliance vs Voluntary Markets
• A high-level comparison of the key players

https://www.hkma.gov.hk/media/eng/doc/key-information/press-release/2022/20220330e3a1.pdf 13
Compliance Markets
• Jurisdictions that have Emission Trading System (ETS) established/ in development

https://carbonpricingdashboard.worldbank.org/map_data
https://icapcarbonaction.com/system/files/document/220408_icap_report_rz_web.pdf
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Established Emission Trading Schemes
• European Union Emissions Trading Scheme (EU ETS)
• Established in 2005.
• Mandatory for all EU members, plus Iceland, Liechtenstein, Norway and UK, covering
about 40% of total EU carbon emissions.
• The target is to reduce emissions by 21% below 2005 levels by 2020. Revised target for
phase 4 (2021-2030): 43%
• Under the scheme, member states allocate a Cap.

https://www.refinitiv.com/content/dam/marketing/en_us/documents/gated/repo
https://tradingeconomics.com/commodity/carbon rts/carbon-market-year-in-review-2020.pdf
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 Established Emission Trading Schemes
• North American Carbon Markets
North America features two tradable carbon markets - the Western Climate Initiative (WCI) and the Regional
Greenhouse Gas Initiative (RGGI).
• WCI aims to decrease GHG emissions 40% by 2030 below 1990 levels. Launched in 2013 and covering multiple
industries from utilities to industrial plants to fuel distributors, the WCI market cap-and-trade has grown into a
$6.6 billion market.
• RGGI is the first US mandatory carbon cap-and-trade system, currently made up of eleven northeast states in
the US. It places a cap on generators of 25MW or higher with a goal to reduce emissions 30% between 2020
and 2030.
Western Climate Initiative Regional Greenhouse Gas Initiative
• California Carbon Allowances (CCAs) are the • States: Connecticut, Delaware, Maine,
tradable instruments and connect with Quebec’s Maryland, Massachusetts, New Hampshire,
market New York, Rhode Island, Vermont, New
• Sectors Covered: industrial, transportation, electricity, Jersey, Virginia
commercial and residential, agriculture, waste and • Launched in 2009, RGGI’s emissions cap
high global warming potential gas producers declines 2.5% per year
• Launched in 2012, California’s emissions cap declines • RGGI state emissions have fallen 45% since
3% per year 2005
• In 2017, the program was extended to 2030 • In 2017, the program was extended to 2030
• California has allocated $11.7 billion from auctions • RGGI quarterly auction revenues have
since 2014 totaled $3.2 billion from 2008 - 2019
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 Compliance Markets
• The key compliance market in APAC

National Emissions Trading Scheme (全國碳排放權交易)

• Fully launched a nation-wide marketplace in Jun 2021, after a pilot starting since Pilot in 8 cities
• Operated by Shanghai Energy and Energy Exchange
• Unit: CEA (Chinese Emission Allowances 碳排放權碳排放權)
• Not to confuse with CCER (China Certified Emission Reduction 碳信用) which is voluntary by nature
h
https://www.hkma.gov.hk/eng/news-and-media/press-releases/2022/03/20220330-3/

The Tokyo Cap-and-Trade Korea Emissions Trading Scheme • Ministry of Environment

Program by the the Tokyo (KETS) indicated intent in
Metropolitan Government • launched in Jan 2015 implementing a domestic
(TMG) • Was East Asia’s first nationwide emissions trading scheme
• launched in 2010 mandatory ETS and the second (DETS) in Sep 2021
• The first local ETS in Asia largest carbon market after the • Carbon trading platform (to
EU ETS. be launched by late 2022)
• Covers 610 of the country’s • 3 November 2021
largest emitters, account for • Malaysia is one of the top
about 70% of national GHG carbon dioxide (CO2) emitters
emissions. in the ASEAN region

https://www.asahi.com/ajw/articles/14544468
https://www.asahi.com/ajw/articles/14544468
https://cleanenergynews.ihsmarkit.com/research-analysis/japan-to-test-carbon-credit-market-
feasibility-in-2022.html
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 Compliance Markets in China
China
• Who ETS Pilots
and what are being regulated? China National ETS

• Initially cover only ~2000 electric utilities,

accounting for about 40% of China's
total
• In 2021, 178 million tonnes were traded at
the national platform
• Cap-and-trade model
• Aim is to expand to industries including
construction, oil and chemicals in
https://www.ieta.org/resources/China/Chinas_National_ETS_Implications_for_Carbon_Markets_and_Trade_ICTSD_March2016_Jeff_Swartz.pdf coming years.
http://finance.people.com.cn/BIG5/n1/2021/0716/c1004-32159915.html
http://www.tanpaifang.com/tanguwen/2021/0512/77835.html 18
 Established Emission Trading Schemes
• Tokyo Cap-and-trade Scheme

• Launched April 2010, covering around 1,400 top emitters in the metropolitan area.
• Aims to cut emissions by 25 per cent by 2020 from 2000 levels.
• Under the scheme, Tokyo sets emission limits for large factories and offices, which can be met by using
technology such as solar panels and advanced fuel-saving devices

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Source: https://www.kankyo.metro.tokyo.lg.jp/
 Compliance Markets Japan and Korea
• Who and what are being regulated?
Japan cap-and-trade Korea ETS

• It covers direct emissions of six

Kyoto gases, as well as indirect
emissions from electricity
consumption

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Clean Development Mechanism (CDM)

Financial support and

technology transfer

Host
Sponsor
Country
Certified emission
reduction (CERs)

Annex I countries Non-Annex I countries

Need to meet reduction target Need for sustainable development

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Paris Agreement Article 6
• 6.2 “Parties shall, where engaging on a voluntary basis in cooperative approaches that
involve the use of internationally transferred mitigation outcomes towards NDCs … and
shall apply robust accounting ....”
• 6.4 “A mechanism to contribute to the mitigation of GHGs and support sustainable
development is hereby established under the authority and guidance of the Conference
of the Parties serving as the meeting of the Parties to this Agreement for use by Parties on a
voluntary basis”.
• Meaning, to establish a central UN mechanism to trade credits from emissions
reductions generated through specific projects.
• 6.8 establishes a work program for non-market approaches, such as applying taxes to
discourage emissions.

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 Voluntary Market
• Regulators are at the same time promoting voluntary carbon market

CCER (China Certified Emission Proposed Greater Bay Area Unified Carbon Market
Reduction 碳信用) • The Carbon Market Workstream of Cross-Agency Steering Group intend
• emissions reduction activities to develop HK into a global, high quality VCM
conducted by companies on a • Establishing the GBA Unified Carbon Market
voluntary basis that are certified • HKEX launched Core Climate, Hong Kong’s International Carbon
by the Chinese government Marketplace, supporting Global Transition to Net Zero in Oct 2022
• which is voluntary by nature
https://www.hkma.gov.hk/media/eng/doc/key-information/press-release/2022/20220330e3a1.pdf https://www.hkex.com.hk/News/News-
Release/2022/220324news?sc_lang=en#:~:text=Under%20the%20MOU%2C%20HKEX%20and,reach%20carbon%20neutrality%20by%202060.

The Thailand Voluntary Emission Reduction

programme (T-VER) Climate Impact X (CIX) launched in 2021
• a baseline and credit programme.
• By 2020 it had 191 registered projects
• The Thailand Carbon Offsetting Program. It Declaration of voluntary carbon market in late 2021, to be
encourages public and private launched by 2024
organisations to calculate their carbon
footprint and buy carbon credits to offset
their unavoidable emissions. Proposed to test feasibility nationwide Carbon
Credit Market (CCM) from 2022

https://www.iea.org/articles/putting-a-price-on-carbon-an-efficient-way-for-thailand-to-meet-its-bold- https://www.enerdata.net/publications/daily-energy-news/malaysia-plans-develop-emissions-trading-scheme-
emission-target ets.html#:~:text=The%20Malaysian%20government%20has%20endorsed,emissions%20trading%20scheme%20(ETS)
https://www.thepmr.org/system/files/documents/Eng%2025580930%20TVER%20mechanism.pdf https://www.kasa.gov.my/resources/alam-sekitar/National-Guidance-on-Voluntary-Carbon-Market-KASA.pdf
https://cleanenergynews.ihsmarkit.com/research-analysis/japan-to-test-carbon-credit-market-feasibility-in-2022.html

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 Voluntary Market
• Collaborative efforts to build and drive VCM

Jointly established by:

CIX’s initial focus will
be to catalyse the
market for Natural
Climate Solutions
(NCS). https://www.aircarbon.co/about-aircarbon

CIX Exchange
The Exchange hosts real-time bids, offers and transactions of standardised carbon
contracts. This makes it ideal for professional traders, brokers and financial institutions Air Carbon Exchange (ACX)
seeking trade of liquid standardised contracts without counterparty risks. A Global Carbon Exchange using distributed ledger technology on
a traditional trading architecture. It leverages blockchain
CIX Project Marketplace architecture to create securitized carbon credits.
The Marketplace hosts a list of curated projects, ideal for corporate buyers and
institutional investors looking to discover, browse and compare quality carbon credits. United Arab Emirates - Abu Dhabi Global Market (ADGM)
and AirCarbon Exchange (ACX) have teamed up to create the
CIX Auctions “world’s first fully regulated” carbon trading exchange and clearing
The Auction platform hosts unique projects or bespoke portfolios of curated projects. house in the Emirate. The initiative is to be launched in 2022.
It is ideal for suppliers with rare, large-scale or new-to-market carbon credits and
suited to corporations, institutional investors and financial institutions looking to learn AirCarbon Exchange is closing its operations in Abu Dhabi
about, and procure such projects. after only one year of trading.
https://atalayar.com/en/content/emirates-launches-first-digital-carbon-exchange-
https://www.climateimpactx.com/ platform
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VOLUNTARY MARKET MtCO2e

Rapid growth of voluntary carbon market drives a need for action to create new innovative solutions
 New Developments of VCM

• Agreement on Article 6 of the Paris Agreement: The rules on Article 6 finalised at COP26 in 2021 establish a
framework for countries to voluntarily collaborate in achieving their emission reduction targets and
adaptation goals through the Article 6.4 Mechanism, and International Transferred Mitigation Outcomes
(ITMOs).

❖ EU Carbon Removal Certification:

Introduced in November 2022, this
voluntary framework sets rules for the
independent verification of carbon
removals, as well as rules to recognise
verification schemes that can be used
to demonstrate compliance with the EU
framework.
❖ The Integrity Council for the Voluntary
Carbon Markets and the Voluntary
Carbon Markets Integrity Initiative
announced in 2023

https://icvcm.org/about-us/
Standard Issuer/Registry
• Who are driving and accelerating trading in these marketplaces
• Carbon offset registries track offset projects and issue offset credits for each unit of emission reduction or removal that is verified and
STANDARDS ISSUER/ REGISTRY certified and create a credible, fungible offset commodity
• They record the ownership of credits. A serial number is assigned to each verified offset credit

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Trends in Carbon Markets

Carbon prices on the rise

Climate ambitions increase and so does the relevance of emissions trading

Investors are increasingly attracted by carbon markets

Green transition must also be just (social aspects of the trading)

Carbon border adjustments are raising the stakes

Rise of voluntary carbon markets

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Agenda

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 Carbon Offset
• A carbon offset is a reduction in emissions of GHGs made in order to compensate for or to
offset an emission made elsewhere
• Offset projects reduce emissions outside of an entity’s organizational boundary and that
reduction is more cost-effective than within the entity’s boundaries
• Carbon offsets are measured in metric tons of carbon dioxide-equivalent (CO2e) and may
represent six GHGs
• Offsets are typically achieved through financial support of projects that reduce the emission
of greenhouse gases in the short- or long-term
• Offsets produced under a voluntary standard are called Verified Emissions Credits (VERs)
• Offset generated under the CDM are called Certified Emissions Reductions (CERs)

http://storyofstuff.org/movies/story-of-cap-and-trade/

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Components
• What are the components of a unit of carbon credits

https://www.carboncareasia.com/eng/Carbon_Solutions/Carbon_Offset.php#:~:text=Under%20the%20CCA%20Carbon%
20Offset,offered%20customized%20packages%20by%20CCA.

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 Type of Carbon Offset
• Major categories
Nature-based Technology-based

Avoidance/ Reduction Avoid or reduce nature loss Leverage technology to avoid or reduce direct and indirect
• Avoided loss of forests emission
Represent emissions that would • Avoided loss of peatland • Renewable energy generation
have occurred but have not as a • Avoided deforestation – this project type is • N2O methane abatement/capture
result of the carbon credit project called Reduced Deforestation and • Carbon capture, utilization and storage (CCUS) technology
Degradation (REDD+) on industrial facilities or fossil-fuel power plant

Sequestration/ removal Uses nature to sequester more carbon in the Removes CO2 from the atmosphere using modern
biosphere technology and stores it in the geosphere or through other
Represent emissions that have • Reforestation secure methods
been removed from the • Afforestation • Bio-energy with carbon capture and storage (BECCS)
atmosphere as a result of • Soil carbon enhancement • Direct Air Carbon Capture and Storage (DACCS)
measures taken by the • Ecosystem restoration – such as soil, • Mineralization (converting atmospheric carbon back into
organisation mangroves, seagrass and peatlands rock
• Enhanced weathering (natural rock weathering absorbs
emissions, and enhanced weathering can provide a boost)

https://cdm.unfccc.int/
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https://redd.unfccc.int/submissions.html?mode=browse-by-topic
Types of Carbon Offset Project

Biological
Industrial Gases Methane Capture
Sequestration

Carbon Capture and

Energy Efficiency Renewable Energy
Storage

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Biological Sequestration
• LBS – Land Biological Sequestration
• refers to the absorption of carbon dioxide from the atmosphere through
photosynthetic processes by plants or trees and subsequent fixation into soils, plants or
trees.
• LULUCF – Land Use, Land Use Change, and Forestry
– Those that avoid emissions via conservation of existing carbon stocks (avoided
deforestation), called Reduced Deforestation and Degradation (REDD)
– Those that increase carbon storage by sequestration
▪ Aforestation- is the process of creating forests on land that was previously
unforested, typically for longer than a generation
▪ Reforestation- is the process of restoring forests on land that was once forested
– Those that increase carbon storage by soil management techniques (no-till
agriculture)

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Controversy – Effectiveness of Tree-planting Offsets

• Timing – “forward selling”

• Permanence of the forest- "Carbon in trees is temporary: Trees can easily release carbon
into the atmosphere through fire, disease, climatic changes, natural decay and timber
harvesting.“
• In an effort to cut costs, some tree-planting projects introduce fast-growing invasive
species that end up damaging native forests and reducing biodiversity - CCB standard

https://eil.com/shop/moreinfo.asp?catalogid=354387 https://www.oaklandinstitute.org/

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Industrial Gases
• Industrial gases with high GWP
• N2O(GWP= 310), released in production of adipic and nitric acids,
• HFC-134a and HFC-23 (GWP: 1300 and 11,700 respectively), which are by-products
from production of refrigerants (HCFC-22),
• PFCs (mainly CF4 and C2F6; GWP 6500 and 9200 respectively) released in the
aluminum industry,
• SF6, the most powerful greenhouse gas used in power substations and LCD screen
production (GWP = 23,900)
• Cheapest and efficient in generating offset
• They do not contribute to the path to a low-carbon economy and deliver few additional
environmental and social benefits
• Some reports have indicated that the creation of an offset market for HFC-23 gases has
created perverse incentives in China and India to start building new HCFC-22 facilities to
increase revenue from offsets (HFC-23 is created as a by-product during HCFC-22
production)

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Renewable Energy Projects
• natural availability
is 3,000 times higher
than current global
annual energy
consumption.
• the current
technical potential
for renewables use
is six times higher
• flexibility

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Hydrogen Energy

Source: The Hydrogen Council, 2017 report

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39
40
Carbon Capture and Storage
CCS, specifically carbon dioxide
capture and storage in geological
formations was adopted as CDM
project activities under the Kyoto
Protocol at the December 2011
decision by the meetings of
UNFCCC

http://www.ccsassociation.org/

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Principles
TSVCM’s draft Core Carbon
• Determining “high-quality” vs “low-quality” carbon credit Principles (CCPs) in Phase II
report provide elaboration :

https://www.hkex.com.hk/-
/media/HKEX_Common/Market/Stage/Resourc
es-Library/Guidance-Materials/HKEX-Net-Zero-
Guide_E.pdf 42
Offsetting Standards
• Key standards to verify the credential of a carbon credit unit

• Accounting Standards
• Ensure that they are “genuine and additional”
• Project Types
• Co-benefits
• Monitoring, Verification and Certification Standards
• Ensure that they perform as predicted
• Certification rules are used to quantify the
actual carbon savings that can enter the
market once the project is up and running
• Registration and Enforcement System
• Ensure no double-selling
• Clarify ownership
• Enable trading of offsets

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 2015

2019

44
https://carbonpricingdashboard.worldbank.org/
Oxford Principles for Net Zero Aligned Carbon Offsetting

Source: The Oxford Principles for Net Zero Aligned Carbon Offsetting revised , February 2024 https://www.youtube.com/watch?v=IT5NSZKjHIo
https://www.youtube.com/watch?v=vuGW2lnvX1A&t=2s
What Type of Carbon Offset this Project Generates
• A short video about a nature-based carbon offsetting project (2:46-5:16)

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How to Choose the Right Credits

Reputable Country/
Standards Location

Project
Type

Sustainability Value for

Benefits Money

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Agenda

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Carbon Tax
• Besides cap-and-trade, the other
approach to price carbon is carbon tax.

• A carbon tax directly establishes a tax levy

on carbon emissions, which is factored into
the price of goods and services based on
their carbon content.

• Both approaches can reduce emissions by

encouraging the lowest-cost emissions
reductions and encourage investors and
entrepreneurs to develop new low-carbon
technologies.

• Take-away thoughts: Carbon Trading vs.

Carbon Tax

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 Internal Carbon Price

Source: Ecofys, The Generation Foundation and CDP (2017) How-to guide to corporate internal carbon pricing

50
Source: https://www.mckinsey.com/
51
Case Study #1
Société Générale

• Internal carbon tax priced at €10/tCO2 ($10.8/tCO2).

• Carbon Reduction Program (CRP) is developed based on the tax collected. CRP provides
award as additional motivation and incentives on energy efficiency and carbon reduction.
• Each award can cover up to 100% of implementation costs with a maximum limit of
200,000 ($182,000) per initiative.

Source: Internal Carbon Pricing, Policy Framework and Case studies, Yale School of Forestry and Environmental Studies, February 2019
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 Case Study #2
• Swiss Re Business Travel
• Its indirect emissions from business
travel were 15 times as high as its
direct emissions per employee (2017)
• “The carbon levy is an impactful
measure to mitigate travel –its main
effect is indirect, via increased
awareness of senior management”

Source:
https://ethz.ch/content/dam/ethz/associates/services/organisation/Schulleitung/mobilitaetsplattform/E
TH_Zurich_info_event_reduction_air_travel_25Oct2017_SwissRe.pdf
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What we discussed
• Emergence of carbon as an asset
• Benefits of trading
• Carbon market
• Types of the carbon market
• Current market
• Carbon offset
• Types of offset project
• Carbon offset standards
• Carbon credits
• How credits generated
• How to choose the right credits
• Internal carbon pricing

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Do some thinking after class

• What kind of carbon offsetting projects can we implement in Hong

Kong or in your home city?

55
Reading Materials

• Textbook Chapter 3
• The Paris Agreement http://unfccc.int/paris_agreement/items/9485.php(refer to
Article 6)
• M3-1World Bank: State and Trends of Carbon Pricing 2021
• M3-2 Carbon Market Watch: Carbon market 101, the ultimate guide to global
offsetting mechanisms
• M3-3 The Oxford Principles for Net Zero Aligned Carbon Offsetting, September
2020
• M3-4 Ecofys, The Generation Foundation and CDP (2017) How-to guide to
corporate internal carbon pricing

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