The world will have used up 50-year global carbon budget by 2034, PwC estimates

The PwC Low Carbon Economy Index analyses the G20 against a low carbon economy model, combining both GDP and emissions growth rates. A 50-year ‘carbon budget’ was estimated for each nation, within an overall global carbon budget to meet the greenhouse gas stabilisation targets outlined by the IPCC. Overall, the analysis finds that based on current trends in carbon intensity, the world will have used up an estimated global carbon budget for the first half of this century by 2034, 16 years ahead of schedule.

The analysis assessed G20 achievements to date in reducing their carbon intensity levels – the ratio of emissions to GDP – since 2000, and the individual nations’ distance to go to meet their carbon reduction targets to 2050. The annual global decarbonisation challenge to 2020 has almost doubled from 2% per annum in 2000 to 3.8% per annum to 2020.

Brazil stood out as a good performer going against the tide of developing countries that showed a pronounced decline in their carbon reduction performances. A 5.4% reduction in carbon intensity means they retained their top place in the PwC Low Carbon Challenge index, measuring the level of decarbonisation necessary per annum to 2050. The country has the least distance to go in terms of carbon intensity reduction according to the PwC analysis, but this would still mean a 79% reduction by 2050.

Brazil experienced higher than forecasted economic growth, while developing a stronger portfolio of renewable energy, and paving the way for further improvements in decarbonisation. Within the G20, Brazil is also one of the closest to the 2050 low carbon economy goal although challenges around deforestation and land use remain.

India is leading for a different reason: the country has low carbon emissions level per capita relative to other emerging economies, and so comes out relatively well when comparing carbon intensity across countries. However, facing a rapidly growing economy, both in terms of the economy and population, the Indian government has announced a target of reducing its carbon intensity by 20-25% by 2020 last year. Recent signs suggest that they intend to meet this target. National ‘Missions’ have been developed to improve energy efficiency, scale up renewable energy and transform land use and forestry practices.

“The climate change agenda has started to shift, from global political cooperation to national economic competition, and from a focus on cost sharing to a focus on value creation. What a number of countries have woken up to is the potential for low carbon growth, and the risks to economic competitiveness of falling behind. Looking back on Copenhagen perhaps its core legacy was not just the failure of multilateral political cooperation, but the kick starting of the national race for green growth”, stated Alexandru Lupea (in picture), Partner, Assurance Services, Energy, Mining and Utilities Industry Group Leader with PwC Romania.

“Globally, by 2050, we need to emit around one-tenth of carbon emissions for every unit of GDP we produce compared to today’s levels. But this challenge varies for countries. Brazil, which only needs to cut its emissions to one-fifth of current levels, will have an easier path because it is taking active measures now. Those that delay action will face much tougher challenges.”

Developed countries improved their performances, due to the slowdown of economic activities over the last two years, but demonstrated little progress in breaking the link between economic performance and carbon emissions.

The full report is available here.