PwC analysis has revealed that the world is on track to blow the 2°C carbon budget, estimated by the IPCC for the next 89 years, within 21 years. This means that the world is now on path consistent with potential global warming of approximately 4°C by 2011, the most extreme scenario presented in the recent IPCC 5th Assessment Report on climate science.
The results from the 5th annual PwC Low Carbon Economy Index, examines the amount of energy related carbon emitted per unit of GDP needed to limit global warming to 2°C. The report warns that there will be serious and far reaching implications due to this level of warming. Current investment planning cycles for major business and infrastructure investments now need to factor this into their decision making.
The report found that policies and low carbon technologies have failed to break the link between growth and carbon emissions in the global economy. The global energy mix continues to be dominated by fossil fuels:
- Reductions in carbon intensity globally have averaged 0.7%/y over the past five years, a fraction of the 6% reductions now required every year to 2100.
- The G7 averaged a 2.3% reduction while the E7, which includes much of the manufacturing base of the global economy, only managed 0.4%.
- US, Australia and Indonesia achieved significant reductions in carbon intensity in 2012, but no country has sustained major reductions over several years.
- While the fracking revolution has helped lower emissions in the US, cheaper coal contributed to higher coal usage elsewhere, for example in the EU, raising concerns that decarbonisation in one country can just shift emissions elsewhere.
If the current global rate of decarbonisation continues, the carbon budget outlined by the IPCC for the period 2012 to 2011 would be spend in less than a quarter of that time, and be used up by 2034. Emissions over and above that budget would be increasing the changes of dangerous climate change, with an average warming of surface temperature projected to be beyond 2°C.
Comments on the findings
‘G20 countries are still consuming fossil fuels like there’s no tomorrow. Despite rapid growth in renewables, they still remain a small part of the energy mix and are overwhelmed by the increase in the use of coal. 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 exploitations of these reserves,’ said Jonathan Grant, director, PwC Sustainability & Climate Change.
‘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. Something’s got to give, and potentially soon. This has implications for a raft of investments in carbon intensive technologies that are currently being planned and executed today,’ Grant concluded.
Leo Johnson, partner, PwC Sustainability & Climate Change said, ‘what we have yet to see is the quartet of CCS, nuclear, biofuels and energy efficiency decoupling growth from carbon. We’ve gone over the carbon cliff. It’s time to figure out the steps that are goring to get us back. We’ve also got to question now whether our assumptions of long term growth are reasonable and compatible with a future where we fail to limit climate change.’
Adapted from press release by Claira Lloyd
Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/04112013/pwc_carbon_budget/