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Top Sustainability News #8

Alexandre Risser
You don't want to miss out on the latest news related to carbon markets and sustainable development. Find out our Top Sustainability News! 

“Global airline emissions plan falls short of EU goals, Brussels advised”

A study requested by the EU highlights some concerns regarding CORSIA’s (Carbon Offsetting and Reduction Scheme for International Aviation) effectiveness. CORSIA’s objective is to tackle carbon emissions by requiring airline companies to offset their annual increase in total CO2 emissions from international civil aviation, by supporting emissions reduction projects. However, this study shows that the current carbon price is too low to have a positive effect and might even negatively impact the EU climate policy, the EU Green Deal, and possibly delay the EU 2050 carbon neutrality goal. “That could hike costs for airlines. The price of EU carbon permits has soared this year to record highs of above 40 euros ($48) per tonne, compared with $2 per tonne for CORSIA-eligible offset credits.” The specificity of CORSIA lies in the credits eligible, which can be significantly cheaper than the carbon price set on the regulated carbon market, the EU Emissions Trading System (EU ETS).. 

It is important to consider that CORSIA will remain in its pilot and testing phase for two years, from 2021 to 2023. During this phase, the airline companies that are part of it have volunteered to participate. If CORSIA needs to improve its framework, it will be even more important to develop low-carbon technologies for airline companies. Since aviation still represents 2-3% of global GHG emissions, reduction efforts will be needed in parallel to offsetting programs to effectively fight climate change.

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“European Parliament backs carbon tax on selected imports”

“Members of the European Parliament (MEP) have adopted a resolution supporting a European Union (EU) Carbon Border Adjustment Mechanism (CBAM).” CBAM consists of implementing a carbon tax on specific imported goods by 2023. If imports do not meet EU standards, the tax will be applied to avoid unfair competition with European products. This mechanism is being contested because it should be aligned with World Trade Organization’s (WTO) principles and should not serve as a protectionist measure. The first phase of the CBAM aims to tackle industries’ imports that are part of the EU ETS, which include the most polluting industries as well as the energy sector. The purpose is to avoid carbon leakage from organizations that could relocate their most polluting activities outside the European borders and avoid the EU ETS mechanism. 

Check out our article about the carbon border adjustment mechanism to learn how it could work in practice and what is at stake. 
For now, the European Union is expected to release a first draft of the proposal by the second half of 2021. Some experts have mentioned that the EU should abandon the CBAM and should instead promote a carbon pricing club with its main trading partners to avoid unilateral decisions from the European Union. 

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“How To Lead Sustainability Initiatives In 2021”

Sustainability appears to be a central pillar of companies' development to reduce exposure to environmental risk. This article highlights the importance of adopting appropriate sustainable initiatives. "Too often, organizations support and champion sustainability initiatives that don't align with their customer expectations. While these efforts may be well-intentioned, they can lack impact at best and cause a backlash at worst. An efficient sustainability strategy has to align with the organization's identity itself to identify the main challenges that the organization should address."What aspect of human rights, environmental protection, economic development, or social good seem most relevant to an organization's beating heart?"

Companies are realizing that a sustainability strategy is no longer optional, but a core pillar for their development. However, a sustainability strategy needs to be well-thought-out to be meaningful and efficient. 
Check out the 4th edition of Top Sustainability News, to learn how sustainability can help companies become more profitable. As stated, having a sustainability strategy aligned with economic interest will empower companies and make them more attractive for investors and employees. 

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Article written by Alexandre Risser