G20 falls behind on national decarbonisation pledges
The UK is "strongly outperforming" the rest of G20 in decoupling emissions from economic growth, but businesses and governments have been warned that the goals of the Paris Agreement won't be achieved with current decarbonisation ambitions.
PwC published its Low Carbon Economy Index today (30 October), which tracks the G20 on its progress of reducing the carbon intensity of its economy. This year’s report notes that the UK and China were the only nations to reduce carbon intensity – and decouple emissions from economic growth – in line with their Nationally Determined Contributions (NDCS) to the two degrees target of the Paris Agreement.
According to the report, UK emissions fell by 6% in 2016, while GDP grew “modestly” at 1.8%, with carbon intensity falling by 7.7% as a result. PwC attributes the fall in emissions to the transition away from coal. The UK has pledged to close all coal power stations by 2025; in 2016, three major plants were shut and deep mined coal production fell from 2,784,000 tonnes to 22,000 tonnes.
China recorded a carbon intensity reduction of 6.5%, largely through reduction in coal use and installing the most renewable capacity in 2016, surpassing the US. Both the UK and China have exceeded their NDCS so far, but trajectory across the G20 needs improving.
G20 nations saw global GDP grow by 3.1%, while emissions stabilised at a growth of 0.4%. As a result, the carbon intensity of the G20 fell by 2.6% in 2016, and has done so at that rate since 2014. However, the decarbonisation rate is short of the 3% average rate required to reach national pledges to the Paris Agreement. If nations are to limit global warming to “well below two degrees”, a 6.3% decarbonisation rate would be required.
PwC’s director of climate change Jonathan Grant said: “As countries prepare to discuss the process for raising the ambition of their national targets at the next round of climate talks in Bonn next week, our report emphasises the fact that the Paris Agreement will only be possible if they are serious about accelerating action.
“When it comes to action on climate change and the two degrees goal, the gulf between the best and worst performing nations is widening – and this creates problem for business. Companies are being encouraged by investors and others to assess the risks of two degrees scenarios. But they’re not forecasting or planning on a two degrees outcome, because the signals from governments just aren’t there right now.”
The UK also leads the G20 for the highest average decarbonisation rate since 2000, falling by 3.7% yearly on average this century. At the bottom of the index, nations such as Indonesia, Argentina, Turkey and South Africa all had emissions growth which exceeded their GDP growth.
Despite the UK’s strong progress to date, the report notes that the coal-phase out is almost complete and that the Government will have to target other emission sources, such as heat and transport.
The report encourages businesses to take action to increase the resilience of assets and supply chains. There will also be greater disclosure requirements placed on businesses, as investors look to manage portfolios against the risk of “knee-jerk climate policy responses”.
Specifically, the report claims that technology and innovation will determine whether nations can reach their Paris pledges, with new services and business models already disrupting certain sectors.
As part of edie’s “Megatrend series”, PwC charted the ‘essential eight’ emerging technologies that would shape how businesses could future-proof operations and capture new economic opportunities in a low-carbon world.
© Faversham House Ltd 2022 edie news articles may be copied or forwarded for individual use only. No other reproduction or distribution is permitted without prior written consent.