Ecofys strikes alliance with The Generation Foundation

11 March 2016 3 min. read
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The scientific consensus into the wide-ranging risks of dangerous climate warming, turned into an agreed-on policy framework at COP21, including the proposal of creating a carbon pricing mechanism. The Generation Foundation and Ecofys announce their partnership to research the complete value chain of a carbon pricing mechanism, in order to identify how best to leverage such a mechanism for long term sustainable human prosperity.

The Generation Foundation is a not-for-profit whose mission it is to create a long term, environmentally sustainable business framework. The organisation is focused on key climate change-related environmental issues, including climate change and environmental degradation, poverty and development, water & natural resource scarcity, pandemics & healthcare, and demographics, migration & urbanisation. The organisation is financially supported by Generation Investment Management, which was founded in 2004 by Al Gore and David Blood. The organisation operates out of London and New York, employs less than 10 people, and is focused on decoupling prosperity from resource-intensive growth.

During the COP21 conference in Paris, all parties unanimously agreed that action must be taken, although turning the global sentiment into local policies that are effective, and are implemented, remains an issue. The need for a global carbon pricing mechanism is seen by many world leaders and businesses as a mechanism for the global transition to a low carbon economy. While carbon pricing has been introduced within a number of jurisdictions, harmonisation of policies across different regions remains tenuous.

A further issue flagged by consulting firm Ecofys, is that many carbon schemes price carbon units too low, and thereby does not allow the mechanism to incentivise the investment necessary to decarbonise emissions-intensive value chains. The externality of carbon pollution, which the schemes seek to introduce into the value chain, are also not reaching the consumer level – further preventing a drive to a reduction in carbon-consuming consumption choices.

Generation Foundation

In a bid to explore the effect on how carbon pricing can facilitate sustainable global economic growth, The Generation Foundation and Ecofys recently announced a partnership for a research project into carbon pricing mechanisms. The aim of the project, which will take place over a period of three years, will see the organisations exploring the role of carbon pricing along value chains up to the end consumers. The project seeks to deliver a number of quantitative insights into how a carbon pricing mechanism can play a role in bringing about a climate warming scenario of 1.5°C.

Kornelis Blok, Director of Science of Ecofys and Professor at TU Delft, comments: “The proposed research aims to deliver actionable results and solutions for these challenges. With our innovative approach, we will take a comprehensive look at the issues, encompassing the policy, industry, investor and civil society perspective.”

David Blood, Senior Partner of Generation Investment Management, states: “Carbon remains a largely unpriced externality in today’s financial markets. Although it is impossible to know the exact timing of the prospective tipping point when financial markets will fully internalise carbon risk, it is critical for investors to prepare for its inevitable impact.”