Carbon pricing
Intervention point
By taking co-ordinated action on setting a standard internal carbon price and integrating it into investment decision making processes, the industry can incentivise decarbonisation efforts and create a more level playing field while simultaneously preparing for the application of external carbon pricing mechanisms.
Current situation
Around the world, governments are starting to put a price on carbon. Currently only some high-emission sectors in the buildings value chain are materially affected. In the near future, however, carbon pricing will directly impact the real estate market.
Evidence shows that considering carbon emissions through monetary cost implications can provide incentives for lowering emissions as well as improving industrial and energy efficiency, among other benefits that are critical to a successful green transformation.
External pricing mechanisms are still in the not-too-distant future for the real estate investment sector. This makes it very important that firms are mobilised towards a coalition that works on ways of dealing with the inevitable issue of carbon pricing. The barriers and open questions towards adoption will need to be addressed ahead of time, so that external mechanisms will not overwhelm the sector once they come into play.
For the real estate sector to move forward on this critical issue, focus is required to propose new best practice industry guidelines to standardise the identification, treatment and disclosure of internal carbon pricing, and to engage the critical mass investors and managers to mobilise behind the findings.
How to get involved
To get involved with the ULI leadership conversations on carbon pricing please email Sophie Chick at sophie.chick@uli.org
The Carbon Pricing Leadership Coalition (CPLC) is an initiative that brings together leaders across governments, the private sector, academia and civil society with the goal of putting in place effective carbon pricing policies.
Interested in finding out more? Click here to download the full technical briefing.
Not yet a ULI member? Click here to join.
Last updated: July 2023
Connected interventions
