COVID carbon: We published 'On account of carbon: The carbon price of changing behaviour' in April 2020 – in the middle of what was then a peak in emissions declines globally. We are already beginning to see evidence that carbon emissions are likely to rise after the temporary pause due to COVID-19 as economies emerge from lockdown. Although there has been a slowdown in climate action momentum from governments as they focus on dealing with the pandemic, many corporates have continued to make new climate pledges even during these difficult times. Also, as governments shift some focus towards recovery, there is much discussion as to how to make it a sustainable or green recovery.

Top 10 questions: In discussions with investors (over Zoom or otherwise), we were asked many questions about carbon pricing, details about offsets, and how COVID19 will affect carbon markets.

Here, we set out the most common questions we have received over the past three months.

  1. Will COVID-19 lockdowns reduce demand and prices for allowances and offsets?
  2. Will the delay in climate negotiations affect implementation of the UN's carbon pricing mechanism?
  3. How do we assess the quality of a carbon reduction pledge?
  4. Which form of carbon pricing is most effective in reducing emissions?
  5. Which sectors already use internal carbon pricing?
  6. Can all offsets be used for compliance in actual ETS schemes?
  7. Who and what determines the credibility of an offset mechanism or project?
  8. What determines the price of an offset?
  9. What are some of the issues related to forestry offsets?
  10. Will aviation follow through with the CORSIA programme after COVID-19?

This is a redacted version of the report published on 14 July 2020. Please contact your HSBC representative or email AskResearch@hsbc.com for information.

Read the full report here

 

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