Internal Carbon Pricing (PIC) allows the rational construction of a path to reduce emissions, in order to prioritize actions based on cost-benefit, focusing on assets and also behavioral incentives.

A PIC project is divided into the following phases:

  • 1) Identification of sources and quantification of emissions - it consists of the information base for the subsequent steps and, consequently, the definition of a mitigation strategy;
  • 2) Ordering of emissions according to their representativeness and marginal cost of reducing emissions, by source, including investments and incentives. This is represented in the Marginal Abatement Cost Curve (MACC);
  • 3) Definition of the mitigation strategy based on the principles followed by the organization, which may be the search for a level of mitigation compatible with that recommended by science, a transition window for the company to be zero carbon, sector benchmarks or another that is appropriate to organization's purposes;
  • 4) Design of priority emission reduction programs, based on availability of resources and time window for obtaining results;
  • 5) Monitoring of results and evaluation of complementary strategies to direct mitigation, such as: offsetting emissions, stimulating the supply chain and other pertinent ones.

This approach allows to rationalize, prioritize and obtain the best possible mitigation results by trying to choose actions with the best cost-mitigation relation, in an orderly manner.

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