TCCP, working with stakeholder input and through our annual advisory process, annually considers whether and how to adjust the minimum carbon fee that is used to determine Climate Transition Budget funding requirements each certification year.
In general, this fee will increase modestly each year. These annual increases are designed to keep pace with inflation and match the growing urgency of the climate crisis. Each year that goes by, the effects of climate change — and their economic damages — grow larger. An appropriate way to respond is to set a bar for climate action that gets higher over time.
The successful reduction of emissions can counteract the increase in total costs to a certifying entity. In other words, a CTB of $15,000 in Year 1 (with 1,000 tonnes of emissions at $15/tonne) could become a CTB of $14,400 in Year 2 (with 800 tonnes of emissions at $18/tonne).
Conversely, rising emissions will increase the CTB and create a greater incentive to reduce emissions.