Shadow Carbon Pricing
Aligned with the recommendation of the Paris Agreement to establish Carbon Prices, we have created a methodology known as “Shadow Carbon Pricing”.
Shadow Carbon Pricing is a tool that will allow quantification of risks and opportunities for new investments. This approach considers future changes in market conditions, which will increase the cost of carbon emissions, the rates on fossil fuels and generate changes in use and need for current products and services.
The established prices are specific for each type of project, horizon (2020, 2030, 2040 and 2050) and geographies. The output of this analysis is shown in the table below, with Shadow Carbon Prices specified for the parameters described. These parameters were selected to include five important project types for us (such as airports, highways and toll roads), and the 15 geographies where our company operates.
Those geographies comprise 13 countries, one sub-national jurisdiction (California) and one region (the Middle East). California was included in addition to the U.S. in recognition of the more robust climate change policies in effect in that state. The Middle East was added as a single location as we operate in several Middle East countries (such as Saudi Arabia or Oman), while wanting to have a higher-level estimate applicable to all of these regions . In addition, carbon prices were estimated for four times horizons (2020, 2030, 2040 and 2050), allowing us to take into account short but also medium to long-term risks.