But what if we cut down a rainforest to grow the cocoa and sugar for that chocolate bar? The rainforest used to provide clean water, food security, and store carbon. These all had a value that was not reflected in the price of that chocolate bar, but is now lost. People are starting to ask companies to be transparent about what the real costs are and whether products are deforestation free.
The government or businesses can also make policies to correct the prices, so for example a chocolate bar that didn’t destroy forests would be cheaper and more people would buy it over the chocolate bar that caused forest destruction. There are several different ways that prices can get corrected including by adding a price on carbon, ensuring that we pay the real costs. Governments around the world agreed to address climate change at an international meeting in Paris in 2015. This agreement was rooted in each government making their own unique climate change contribution meaning they each chose the tools that best suit them. The Paris Agreement also recognised the role of forests in fighting climate change.
Tools that put a price on carbon include emissions trading systems, carbon taxes and carbon neutral commitments. For example, the international aviation sector has a new policy to ensure the growth in their emissions beyond 2020 is carbon neutral – meaning that they buy offsets from projects that reduce carbon to make up for the pollution from more people taking more flights. Businesses use other policies too, such as ‘insetting’ where a company compensates its deforestation impacts within its own value chain.
Putting a price on carbon gets the most impact to solve climate change plus has other benefits for people and the economy. For example, it helps to further the United Nations Sustainable Development Goals to alleviate poverty, protect the planet and generate prosperity for all.