What are the Benefits of Carbon Pricing?
Imposing a price on carbon to reduce greenhouse gas emissions (GHGs) sounds harsh at first, but it can be an effective way to combat climate change while improving a company’s bottom line performance. In addition to a cleaner and healthier environment, there are other benefits that are less often discussed or understood. Many industry leaders don’t realize the full scope of carbon pricing benefits because they are overly focused on how it will affect their bottom line. The reality is that by partnering with HYCO1, decarbonization can actually result in a wide range of advantages, including increased profitability. Let’s take a look at some of the ways that pricing carbon the right way can be beneficial to companies who make carbon intensive products.
Businesses Benefits
Putting a price on carbon and re-using it in a more circular manner may sound complicated, costly, and full of hassles. However, emitters that proactively initiate smart carbon capture and utilization practices can actually improve their bottom lines - quickly and substantially. One way this occurs is through lower product CI scores. Lower CI-scored products most often result in higher demand and sometimes even premium prices. Another huge benefit for emitters is that energy recovered from the carbon capture and conversion process can be rerouted back into a company’s production facilities, creating significant savings opportunities and a lower carbon footprint. Bottom line: businesses that invest early and aggressively in decarbonizing will be more durable and profitable in the long term.
Economic Improvements
In nearly all cases, the funds raised by or invested through carbon pricing policies go back into the economy in one form or another. Depending on the terms set by the federal or a particular state government, money can be allocated to improve infrastructure, fund other green initiatives, decrease deficits, and/or reduce taxes. Policymakers may even decide to initiate carbon dividends, whereby checks or tax credits are sent directly to reward a company that invested to decarbonize. California’s Climate Investments is a prime example of how carbon pricing can be effectively put back into an economy to further combat climate change and improve communities in need.
Human Health
Cleaner air means healthier air. The WHO estimates that air pollution accounts for 7 million deaths around the world every year. It has been shown that air pollution causes health issues including heart attacks, stroke, and respiratory problems. Carbon pricing that encourages emitters to reduce GHG emissions leads to almost immediate improvements in all these areas. Studies emerging from California’s cap-and-invest program show that the health benefits of California’s climate investments are almost 5 times higher than their costs. Other studies show that reduced carbon emissions can save billions of dollars in healthcare costs. These studies don’t include factors like improved efficiency and reduction of work missed due to health issues, which are more difficult to measure but positively affect the economy.
Investment Opportunities
Mark Carney, former Bank of England Governor, has characterized efforts to reach net-zero as “creating the greatest commercial opportunity of our age.” Carbon pricing incentivizes investment in new technologies and innovations, and investors are already incorporating environmental, social, and governance (ESG) analyses into their decision-making. Getting in on the ground floor of new technologies like carbon capture and utilization can lead to attractive investment opportunities. Which is why Forbes estimates that investment opportunities in carbon capture are a major part of an emerging $100 trillion market of investment opportunities.
HYCO1’s Role
Whether you’re a CO2 emitter looking to reduce your carbon footprint, or an investor searching for ESG investment opportunities, HYCO1 can help. Our breakthrough catalyst and scalable, industrial strength solutions enable emitters to remove carbon emissions directly from the source with no out-of-pocket cost. We shoulder the CO2 burden and put up the money to convert and utilize it. Our industrial partners improve their bottom lines with lower CI-scored products and reduced energy costs while we turn their CO2 into high-value, sustainable products that benefit the economy.
Contact HYCO1 today to discuss investment or project opportunities.
HYCO1: Carbon Negative. Planet Positive.