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Internal Carbon Pricing

Carbon Pricing in Higher Education

Swarthmore is among a small group of schools with internal carbon prices. Yale’s Carbon Charge is piloting multiple structures for an internal price to find the most effective policy for emissions reduction at a university. Vassar incorporates a shadow price and robust life cycle cost analysis policy into its decision making.

We are working to share the lessons and best practices learned on our campus and help other institutions institute carbon pricing. In particular, we are optimistic about the replicability of a shadow price in many institutional contexts.

Carbon Pricing in the Private Sector

The CDP reports that 607 companies currently use an internal carbon price. A handful, like Microsoft, levy charges on branches of a company, while many more use shadow prices to influence decision making, particularly in allocation of research and development resources.

The most common reason for implementing an internal price is to prepare a company for national-level carbon prices where the company operates, so they are more common among companies that make long-term capital investments and that are highly carbon-exposed.

Learn more in the CPD’s 2017 annual report on internal carbon prices in the private sector.