Carbon Budget to be Spent by 2034, PwC Warns

The world is on track to blow the 2 degree Celsius carbon budget, estimated by the UN Intergovernmental Panel on Climate Change for the next 89 years, within 21 years, according to PricewaterhouseCoopers analysis.

This puts the world on a path consistent with potential global warming of around 4 degrees Celsius by 2100 — the most extreme scenario presented in the IPCC report on climate science published in September.

If the world continues at current rates of decarbonisation, the carbon budget outlined by the IPCC for the period 2012 to 2100 would be spent in less than a quarter of that time, and be used up by 2034. Emissions over and above that budget would be increasing the chances of dangerous climate change, with average warming of surface temperature projected to be beyond 2 degrees Celsius, according to the fifth annual PwC Low Carbon Economy Index.

The Index examines the amount of energy-related carbon emitted per unit of GDP needed to limit global warming to 2 degrees Celsius. It warns that this level of warming “will have serious and far reaching implications” and says current investment planning cycles for major business and infrastructure investments now need to factor this into their decision making.

Policies and low-carbon technologies have failed to break the link between growth and carbon emissions in the global economy, the report says.

In 2008, the PwC Low Carbon Economy Index calculated that to maintain growth without exceeding 2 degrees of warming, the G20 needed to improve its carbon intensity at 3.5 percent per year. Over the next four years the rate of decarbonisation failed to exceed 0.7 percent.

By 2012, to make up for lost ground, the rate had risen to 5.1 percent, requiring a rate of decarbonisation never achieved in a single year to be sustained for the rest of the century. This year’s report increases that rate to 6 percent.

This year’s report says the G7 averaged a 2.3 percent reduction while the E7 – which includes much of the manufacturing base of the global economy – only managed 0.4 percent. The US, Australia and Indonesia achieved significant reductions in carbon intensity in 2012, but no country has sustained major reductions over several years.

Additionally, while fracking has helped lower emissions in 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, PwC says.