(CN) – While the Trump administration remains unconvinced about the specter of climate change, global corporations are quietly fixing a dollar amount on their carbon emissions as incentive to help them emit less, according to a recent study.
Approximately 1,200 businesses from around the world – including Disney, General Motors and even oil giant Shell – are using various iterations of a carbon price to help contain emissions, analyze investments, reduce risks related to climate change and identify opportunities as the transition to a low-carbon economy moves forward.
The business trend is documented by the Center for Climate and Energy Solutions, a Washington-based think tank that advocates for pragmatic solutions to environmental issues related to climate change.
“Increasingly, companies are looking for ways to reduce emissions in their internal operations and in their supply chains,” the study says.
The act of pricing carbon, or assigning a dollar amount per ton of carbon emissions, has long rankled climate change skeptics like President Donald Trump, who believe such policies will undermine the pace of business. However, the study argues that chief executives are eager to at least understand the cost of carbon emissions and in some cases take drastic steps to reduce such emissions, with or without leadership from the public sector.
“Pricing serves as a risk-mitigation tool helping companies prepare both for climate-related physical risks (e.g., impacts of climate change, resource availability, supply chain disruptions) and for risks associated with the transition to a low-carbon economy (e.g., policy, market, reputational),” the study says.
In other words, companies study the physical impacts, like sea-level rise, hotter temperatures and more extreme weather events that scientists believe will be a result of climate change. But they are also attempting to grapple with costs of transitioning to more renewable sources of energy, including the cost of implementing those energy sources and the potential damage to their corporate reputations by not transitioning soon or comprehensively enough.
The study is based on data provided by the Climate Disclosure Project, an organization based in the United Kingdom that works with corporations and other private entities to disclose the amount of carbon emissions a given company emits.
According to the project, 517 companies have already put a price on carbon, with 732 companies planning to do so within the next two years.
Companies that have already undertaken carbon pricing include Microsoft, Disney, Rio Tinto, BP, BHP Billiton, Unilever and General Motors, the study says.
Although the United States is in the process of backing out of the Paris climate agreement, other governments are moving forward on carbon pricing – including 42 nations and at least 20 cities, according to the World Bank.
The European Union has priced carbon since 2005, and China is widely expected to launch the world’s largest cap-and-trade system sometime in 2017.
California created the first cap-and-trade market in the United States, and in July lawmakers extended the market until 2030. The state also continues to eye a large legislative package that would provide huge incentives to electric automakers, manufacturers and buyers.
Putting a price on carbon emissions can take the form of a straight carbon fee, which assigns a dollar figure per metric ton of carbon pollution. Or it can be rolled into what is called shadow pricing, which uses a more hypothetical cost-allocation model.
Some experts believe corporations are voluntarily submitting to carbon fees, shadow pricing and other methods of cost analysis because the scientific consensus on climate change necessitates adaptation to its inevitability.
Also, many investors in large companies have begun to demand companies have a plan for climate change and its effects.
While Trump, U.S. Environmental Protection Agency Administrator Scott Pruitt and other prominent Republican lawmakers continue to deny the existence of climate change, an increasing number of GOP operatives are starting to embrace a market-based approach to climate change solutions.
In July, 46 Republicans joined Democrats in the House to defeat an amendment to the National Defense Authorization Act that would have scuttled a requirement that the Pentagon adequately prepare for climate change.
And this past February, a group of Republican elder statesmen, including former secretaries of state James Baker and George Schulz and former Secretary of the Treasury Hank Paulson, called for a carbon tax.