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Companies accelerate carbon pricing plans to mitigate risk

The number of companies that factored in carbon pricing nearly tripled to 437 from the 150 companies from last year.

JONATHAN HAYWARD/THE CANADIAN PRESS

A new study shows companies in Canada and around the world are increasingly putting a price on carbon emissions in their financial planning in order to mitigate risks.

The London-based Carbon Disclosure Project says 437 companies factored in carbon pricing in 2015, nearly triple the 150 companies from last year, as climate change becomes part of mainstream business decision-making globally.

The report found that in North America, the number of companies assuming a price on carbon has more than doubled to 97, including a variety of Canadian companies such as Toronto-Dominion Bank, Canadian Tire Corp. Ltd. and Catalyst Paper Corp.

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Energy, utility and mining companies, however, dominate Canada's representation, as many operate in Alberta and British Columbia where the government has already set a price for carbon emissions.

But while set prices of between $15 and $30 a tonne exist in the two provinces, companies are making a variety of future assumptions on the financials of carbon pricing.

Cenovus Energy Inc. says it uses a carbon price model of between $15 and $65 a tonne for future planning; Encana Corp. uses a range between $20 to $125 a tonne; Suncor Energy Inc. uses $15 to $55 a tonne; and Enbridge Inc. uses as much as $200-a-tonne pricing to determine long-term viability of its natural gas projects.

The CPD study, released Monday, said a further 583 companies globally are planning to use an internal carbon price within the next two years.

Businesses joining the list this year included General Electric Co., Colgate-Palmolive Co. and Nissan Motor Co. Ltd. Another 583 companies expect to start using a carbon price in the next two years, including Yahoo Inc. and the Chinese electric utility CLP Holdings Ltd., according to the CPD's third annual report.

China is pilot testing emissions-trading markets and expects to expand the program next year. In the United States, President Barack Obama introduced regulations on greenhouse pollution from power plants this year, although Republicans seeking to succeed him as president have vowed to undo the plan if elected.

The United Nations, meanwhile, is brokering talks this year aimed at an international pact that would commit more than 190 countries to limits on heat-trapping pollution.

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Companies said carbon prices help create incentives for energy efficiency projects or to switch to less-polluting fuels. In the United States, utilities including Duke Energy Corp. and American Electric Power Co. Inc. cited the expected cost of emissions in choosing to invest in low- or no-carbon generation, according to the report.

Carbon prices ranged from the $357.37 used by NGK Spark Plug Co. Ltd. of Japan to the 95 cents cited by Brazilian utility Cia. Energetica de Minas Gerais for emitting a metric ton of carbon dioxide or its equivalent.

The Canadian Press and Bloomberg News

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