PwC's Net Zero Index shows that, based on current trends in energy consumption and CO2 emissions generation, the century’s global carbon budget would be used up by the end of this decade
The world must cut its carbon intensity five time faster to hit the 1.5C temperature targets set out in the Paris Agreement.
That is according to the PwC Net Zero Index, which shows that, based on current trends in energy consumption and CO2 emissions generation, the century’s global carbon budget would be used up by the end of this decade.
The Anglo-American accounting firm believes this sets the scene for a decade requiring “unprecedented progress” in solutions, investment, skills and technology transformation across business, government and society.
As global economies plan their emergence from the pandemic, PwC said its Index provides a warning sign of the risks of a return to “business as usual” in the race to recover and generate new growth.
Dr Celine Herweijer, global climate change leader and partner at PwC UK, said: “Every year we underachieve on cutting carbon, the task gets tougher and the transition required is more radical.
“We now need decarbonisation and ultimately transform companies, industries and geographies at an unprecedented scale and speed.
“The good news is that when public policy, public interest, technological innovation and investment line up, we can see how fast systems can transform – the automotives industry today being a case in point.”
Global carbon intensity in 2019 fell by 2.4% in bid to reach Paris Agreement targets
For the past 10 years, PwC UK’s Index has modelled economic growth and energy-related CO2 emissions data, against the rates required to achieve the aims of the Paris Agreement.
It tracks how economies are progressing in breaking the link between economic growth and increases in energy-related carbon emissions.
Tracking a complete year of energy and economic data from 2019, the Index shows that progress in decoupling energy-related CO2 emissions growth from economic growth slowed.
In 2019, global energy-related CO2 emissions increased by 0.5% with economic growth of 2.9%. Carbon intensity fell by 2.4% which is above the long-term average decarbonisation rate of 1.5%, but falls way short of the progress required to keep the rise in global temperatures below 1.5°C.
The UK has had the highest long-term level of decarbonisation in the analysis, maintaining a decarbonisation rate of 3.7% over the duration of the 21st century, and achieving a high rate of reduction of emissions relative to economic growth in 2019.
The country tracked a decrease in consumption of coal, natural gas and oil, while expanding production of renewable energy, most notably wind, which is a key part of the UK government’s 10-point plan for a green recovery.
However, to deliver on its net-zero emissions target, PWC’s report notes that the UK will need to continue to “invest heavily”, to the tune of £400bn in green infrastructure and renewable energy sources.
It added that a simultaneous decarbonising of the rest of the economy, including the hard to abate sectors such as aviation and maritime, will also be necessary.
With the UK preparing to host heads of state for the next climate summit, COP26, in Glasgow, and the Climate Change Committee (CCC) presenting the world’s first detailed roadmap for a fully decarbonised nation in its Sixth Carbon Budget, PwC believes the UK has the chance to position itself as a “true climate leader”.
Fossil fuels continued to dominate in 2019
The Index shows that going into 2020, across the world, fossil fuels continued to dominate, with 57% of the increase in energy consumption met by natural gas and oil alone. Energy-related CO2 emissions were up 0.5%, as global energy consumption increased by 1.3%.
But 2019 saw a 0.6% decline in coal consumption – the first drop for the fossil fuel since 2016. There were steady increases in the consumption of oil with a 0.8% growth rate and a 2% rise in natural gas.
Despite record growth rates in wind of 12.1% and 23.8% for solar, renewables accounted for just 11% of global energy consumption last year.
Looking ahead, PwC believes the COVID-19 recovery packages now present a “unique opportunity” to focus and accelerate cleaner and more sustainable infrastructure and industry, while generating new business and employment opportunities.
Dr Celine Herweijer said: “The pandemic-related dip in global emissions this year will rebound quickly as economies emerge and fully open up, but swift action is needed to rebuild with the clean infrastructure, technologies, and solutions that are fit for the future.
“The wave of businesses, investors, and governments committing to ambitious net-zero targets in 2020, is a promising sign that a shared sense of urgency is emerging.
“We have just over two business cycles to transform every sector of the global economy to halve global emissions. Put simply, we are in the pivotal decade.”