More Companies Monitor Emissions with Internal Carbon Pricing

Internal carbon pricing allows a company to charge its business units on the basis of their energy usage. This provides the units with a real incentive to reduce their energy consumption, and changes behaviors. A growing number of companies and investors are embracing internal carbon pricing as they believe it makes sense ethically and economically.

The business units at Microsoft compute their profits or losses each quarter not just by considering sales and expenses, but also by factoring in the price of carbon. Microsoft also charges the business units an internal carbon tax based on their energy consumption. The money thus raised goes into a common fund that invests in environmental sustainability projects.

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Vikas is a staff writer for the Sustainable Development news and editorial section on Justmeans. He is an MBA with 20 years of managerial and entrepreneurial experience and global travel. He is the author of "The Power of Money" (Scholars, 2003), a book that presents a revolutionary monetary economic theory on poverty alleviation in the developing world. Vikas is also the official writer for an international social project for developing nations "Decisions for Life" run in collaboration between the ILO, the University of Amsterdam and the Indian Institute of Management.