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Congratulations! Your proposal, "Novel Strategy On Private Sector's Internal/"Shadow" Carbon Pricing in the U.S. Carbon Price contest, has been selected to advance to the Finalists round.
Be proud of your accomplishment – more than 350 proposals were submitted and only a very small number have been advanced through these two rounds of judging.
As a Finalist, your proposal is eligible for the contest’s Judges Choice award, as well as the contest’s Popular Choice award, which is determined by public voting.
If you haven’t already, you will soon receive an email from the Climate CoLab staff with details about the voting period. If you don’t receive that email within the next day, or have other questions, please contact the Climate CoLab staff at firstname.lastname@example.org
All winners will be announced the week after the voting period ends, on September 12, 2015 at midnight Eastern Time.
Both Judges Choice and Popular Choice will receive a special invitation to attend selected sessions at MIT’s SOLVE conference and present their proposals before key constituents in a workshop the next day, where a $10,000 Grand Prize will be awarded. A few select Climate CoLab winners will join distinguished SOLVE attendees in a highly collaborative problem-solving session. Some contests have additional prizes given by the contest sponsor.
Thank you for your work on this very important issue. We’re proud of your proposal, and we hope that you are too. Again, congratulations!
2015 Climate CoLab Judges
We have not seen other proposals specifically advocating for shadow pricing as part of a collective effort. Depending on the price, it could have a significant benefit. The most important outcomes are to normalize the idea of carbon pricing in the business community, steer capital deployment in more emissions efficient directions, and reduce the opposition of federal carbon pricing when the policy opportunity arises.
However, the section outlining HOW this would be done is very sparse; without more detail, it seems like an idea that has yet to be fully formed. It is not clear why companies not already doing this would be persuaded to change course and adopt this proposal. Are there incentives? What are they? Administration is left to individual actors; is there a review process for efficacy? There is a significant debate over the level of pricing - witness the controversy over the SCC. No discussion is provided on how to set levels.
A few suggestions: One is to clarify the important difference between shadow pricing and internal pricing. Shadow pricing is applying a surcharge to expected energy costs or other emitting activities in analyses of investments, procurement, and other important business decisions. This would give an edge to more energy efficient plant and equipment, locating facilities in areas with lower carbon electricity, and procuring services with lower carbon footprints. Firms may spend more, but they would efficiently avoid stranded capital in a future where policies explicitly price carbon. In contrast, internal pricing actually charges business units a per-ton fee based on their carbon footprints. There is real money that changes hands within a company. This is what Microsoft is doing, and it's much harder than shadow pricing as corporate central offices need to set up carbon inventories, establish charges, collect them, and figure out how to distribute the proceeds within the company. In our view, promoting shadow pricing is an easier lift, and the key is to promote easily adoptable, transparent methodologies, and standards against which companies can certify. We like the idea of using state subsidies as carrots - but states will need objective measures of shadow pricing behavior to make it work. We also think this is ripe for shareholder activism, not least because they can rightfully argue firms put capital at risk if it is emissions intensive and the US adopts comprehensive climate policy.
SUBJECT: Your proposal has been selected as a Semi-Finalist!
Congratulations! Your proposal, Novel Strategy On Private Sector's Internal/"Shadow" Carbon Pricing in the U.S. Carbon Price contest, has been selected to advance to the Semi-Finalists round.
You will be able to revise your proposal and add new collaborators if you wish, from July 1st until July 14, 2015 at 23:59pm Eastern Time.
Judges' feedback are posted under the "Evaluation" tab of your proposal. Please incorporate this feedback in your revisions, or your proposal may not be advanced to the Finalists round. We ask you to also summarize the changes that you made in the comment section of the Evaluation tab.
At the revision deadline listed below, your proposal will be locked and considered in final form. The Judges will undergo another round of evaluation to ensure that Semi-Finalist proposals have addressed the feedback given, and select which proposals will continue to the Finalists round. Finalists are eligible for the contest’s Judges Choice award, as well as for public voting to select the contest’s Popular Choice award.
Thank you for your great work and again, congratulations!
2015 Climate CoLab Judges
This proposal promotes the idea of carbon shadow pricing in business operations. We agree with the author that this is worth promoting, both because it would reduce emissions and because it socializes the concept, leading to less opposition to carbon pricing policies.
Our main recommendation for this proposal is to think harder about what hooks are available. The proposal cites state subsidies. What about other incentives, for example through shareholder action, SEC reporting policy, chambers of commerce leadership?
Costs depend on the price firms apply and the extent to which they apply it. Could standards setting organizations offer a variety of methodologies to which companies could certify their shadow pricing? The that fact that energy companies use a carbon price in evaluating their return on investment has virtually no incentive impact in the market place, so the ability to identify any benefits at all other than psychological (which are not trivial, but are hard to quantify) can be difficult
Jul 1, 2015
Thank you for the feedback. As the judges appear to have already chosen the winner for the 2015 carbon pricing contest, at this time the plan is not to revise this proposal. The saved time will instead be diverted to other proposals.