WB/Ecofys affirms sensitivity of cement sector to carbon leakage

WB/Ecofys affirms sensitivity of cement sector to carbon leakage

While other factors such as raw materials, energy, labour and knowledge also have to be considered in terms of carbon leakage, the impact of carbon pricing on a cost-competitive industry such as the cement industry cannot be ignored, according to "State and Trend of Carbon Pricing 2015", a report published by the World Bank (WB) and Ecofys. "However, for sectors producing relatively homogeneous products cost competition is crucial. Often, production of these relatively homogeneous goods is also emissions-intensive and carbon pricing could have a significant impact on companies´ production costs, leading to loss of their international competitiveness and, as a consequence, emissions leakage," says the report.

In the run-up to COP21, the Paris climate change conference to be held in December, there is a growing trend to put a price on carbon. At present there are some 40 countries and over 20 cities, or around a quarter of GHG emission, that have introduced carbon pricing as a way to mitigate the output of CO2 into the atmosphere. In terms of negative impacts, these mainly occur when there are differences between different areas and are manifested via short-term output, long-term investment and global fossil fuel prices.

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