Shadow Carbon Pricing
Aligned with the recommendation of the Paris Agreement to establish Carbon Prices, Ferrovial has established a methodology to establish it in the form of "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 presented in the form of a grid, with Shadow Carbon Prices specified for the parameters described in Table 1. These parameters were selected to include five important project types for Ferrovial (such as airports, and highways & toll roads), and 15 geographies where the 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 USA in recognition of the more robust climate change policies in effect in that state. The Middle East was added to a single location as Ferrovial operates in several Middle East countries (such as Saudi Arabia or Oman), and Ferrovial wanted to have a higher-level estimate applicable to all of those. In addition, carbon prices for four times horizons were estimated (2020, 2030, 2040 and 2050), allowing Ferrovial to take into account short but also medium to long term risks.