Following the Paris Agreement, France has set a goal of achieving carbon neutrality by 2050. To achieve this, the government, households, local governments, and businesses must reduce their greenhouse gas emissions. The actions to be taken toward this goal can be guided by a value assigned to climate action: «the overarching value of carbon.».
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Why place a value on climate action?
- Market prices do not take into account the current and future damage caused by global warming.
- Consequently, these damages are not—or are only minimally—factored into companies’ investment decisions or households’ consumption and lifestyle choices.
- The value of climate action is a benchmark that a community sets for itself to determine which actions are effective in combating climate change.
To help determine the appropriate scale of these actions, the carbon benchmark is used.
This value, expressed in euros, yields an estimate:
- the distance remaining to reach a greenhouse gas reduction target,
- the monetary value that society must assign to public and private investments in order to achieve this goal.
Calculation and Use of the Carbon Sink Value
How is this value calculated?
We use a socioeconomic calculation method based on a cost-effectiveness approach.
- Step 1
We set a goal to achieve. In this case, carbon neutrality by 2050. - Step 2
We assess the availability and cost of current and future measures and technologies needed to achieve this goal. - Step 3
From this, we can infer a trajectory for the benchmark value of carbon that increases over time.
How is the value of the Climate Action Fund used?
Carbon price target = €250 by 2030.
- Step 1
Identify the appropriate actions needed to achieve carbon neutrality. - Step 2
Identify environmental measures that can help trigger actions deemed appropriate.
Conclusion
The carbon value serves as a benchmark for assessment and action. It does not determine the nature of the public policies to be implemented; rather, it helps set priorities and identify the most effective actions and investments for achieving carbon neutrality.
