PwC report warns that current rate of decarbonisation leaves world is on track to exceed “carbon budget” by 2034
By Sophie Yeo
The planet could face irreversible and potentially catastrophic levels of global warming in just over 20 years unless the world commits to a much higher rate of decarbonisation.
A new report from leading consultancy PwC says that the amount of greenhouse gas emissions countries can release is likely to be blown by 2034.
This bank of carbon – around 270GtC even according to conservative estimates – will have been emptied if the global economy continues at its current decarbonisation rate of just 0.7% per year.
PwC have calculated that even doubling the current rate of decarbonisation to 1.4% per year will set the world on course to hit a 4C increase in global temperatures by 2100.
A World Bank report released in June described the extreme heat waves, sea level rise and severe droughts and floods that will hit the poorest and most vulnerable nations in a 4C world. It noted that some of the worst consequences could be avoided if temperatures were limited to under 2C.
The UN-backed IPCC report, which brings together the most recent findings of climate science, found that in total the world can emit a total of 800GtC if there is to be even a 66% chance of remaining below the 2C mark. By 2011, 531GtC of this had already been emitted.
“The IPCC has included it as quite a central part of its report this year, and that is why we focused on it,” Jonathan Grant, director of PwC sustainability and climate change told RTCC.
He adds that it could play an important part in the UN talks on climate change between now and 2015, when governments will try to achieve a legally binding deal on emissions reductions.
“I think in theory we should move towards negotiations about which country gets which share of the carbon budget.
“I think the only way to say whether or not we’re on track for two degrees is if we convert these pledges into actual carbon budget numbers, but there are huge political challenges to trying to carve up the carbon budget in that way.”
The deadline of 2034 as the year at which the world could exceed its carbon budget means that businesses will have to factor it into any decisions on major infrastructure and capital investments. “Climate risks are now business risks,” the report warns.
Grant says: “The results raise real questions about the viability of our vast fossil fuel reserves, and the way we power our economy. The 2 degrees carbon budget is simply not big enough to cope with the unmitigated exploitation of these reserves.”
If the planet is not going to blow its carbon bank, the carbon intensity – the amount of CO2 emitted per unit of GDP produced – will have to reduce by 6% every year up to 2100, the report finds.
This will not be an easy task, considering that no country has so far managed to sustain any high level of reductions, despite a similar alert from PwC in 2008 that the G20 needed to increase its decarbonisation rate by 3.5% per year to avoid dangerous warming. Currently, the rate stands at just 0.7%. The 6% figure now given attempts to compensate for this shortfall.
The report points to the fact that, although the shale gas revolution in the US has significantly reduced the country’s emissions, the consequent reduction in coal price has simply increased emissions elsewhere. The percentage of the UK energy mix derived from coal increased from 30% in 2001 to 39% by 2012, while China has tripled its coal consumption since 2000.
The 6% figure for the rate of necessary decarbonisation based upon the projected growth of the global economy, which is forecast to triple in size between now and 2050 – although some economists have questioned whether such predictions can be counted on, should climate change continue unfettered.
“Our analysis assumes long term moderate economic growth in emerging economies, and slow steady growth in developed economies.
“But, failing to tackle climate change is unlikely to result in such a benign scenario of steady growth,” said Grant.
This means decoupling economic growth from carbon emissions. Both developed and developing countries will have to challenge the notion, entrenched since the industrial revolution, that a nation’s wealth depends on the amount of fossil fuels it can burn.
The report says: “Unless economic growth is decoupled from carbon emissions we would face significant global warming which will have serious and far reaching implications.”