By Susanna Twidale
LONDON, May 12 (Reuters) - Oil refiners and gas producerscould face higher production costs if countries use a highcarbon price to follow through promises made at last year'sglobal climate summit in Paris, research showed on Thursday.
The landmark Paris Agreement was a commitment by nearly 200countries to cut greenhouse gas emissions from 2020 with the aimof limiting the rise in the global average temperature to lessthan 2 degrees Celsius.
The role of carbon pricing -- charging for each tonne ofcarbon dioxide emitted -- in efforts to curb rising emissionsblamed for global warming gained prominence last year afterseveral multinational companies, including oil majors, said itis needed to spur investment in low-carbon energy.
However, asset managers have struggled to put a figure onwhat the impact of carbon costs levied to achieve the Parisgoals could be on companies.
The Investment Leaders Group (ILG), a global network ofpension funds, insurers and asset managers -- with assets worthover $4 trillion under management -- and Cambridge University,developed a model to work out what the higher carbon costs wouldadd to production costs.
The model used a 45 euros a tonne carbon price since this isthe median carbon price the U.N.'s Intergovernmental Panel onClimate Change said would be needed to keep within thetemperature rise limit.
"For oil refiners, the average margin at risk is around -1.2euros/barrel... For gas companies, the sector margin impact canreach -5.5 euros/cubic kilometre," the report said.
It also looked at the impacts of existing measures to curbgreenhouse gas emissions on oil refiners, gas producers andelectric utilities but did not name individual companies.
It focused on Britain, Spain, Germany, Alberta Canada andCalifornia, and found risks and opportunities vary greatly ineach region and sector.
A 45 euros/tonne carbon price could on average cost electricutilities in Alberta an extra 0.025 euros for each kilowatt hour(kWh) of electricity produced.
The same carbon price for utilities in Spain, where morethan 40 percent of the generation comes from renewable sourcessuch as wind and solar, could save producers 0.018 euros kWh.
High carbon prices push up electricity prices which canbenefit low-carbon power producers such as renewables andnuclear plants.
"In the long term every company, one way or another will beexposed to climate change risks and opportunities. Most assetmanagers struggle to quantify what these will be," said ManuelLewin, head of Responsible Investment at Zurich Insurance Group,an ILG member.
Other ILG members include Allianz Global Investors, Old Mutual Group and Standard LifeInvestments.($1 = 0.8775 euros) (Reporting By Susanna Twidale, editing by Greg Mahlich andDavid Evans)
