Shadow Carbon Pricing in the Canadian Energy SectorMarch 4, 2013
Many Canadian companies, especially in the energy sector, are using a shadow carbon price in their current decision-making processes. A shadow carbon price is the expected future price of carbon, reflecting the expected market price or regulatory cost, or the cost of reducing or offsetting carbon emissions. Sustainable Prosperity surveyed ten companies in the energy sector, and found that all ten are using a shadow carbon price; seven formally, three informally. The shadow carbon price is informing project evaluation, and strategic and business planning. Companies are using it to mitigate risk, such as market access, and to realize opportunities, including reducing carbon emissions.