Consultancy giant PwC has published its latest Low Carbon Economy Index for 2018 which shows that not only are emissions on the rise again, but that there is not a single country achieving the necessary decarbonization rate to limit global warming to the necessary 2°C as laid out in the Paris Agreement.
PwC, the second largest professional services firm in the world, published its Low Carbon Economy Index (LCEI) 2018 this week, which builds a model combining energy-related CO2 emissions with historic and projected GDP data and adds in IPCC’s carbon budgets for individual G20 economies and world totals. The report shows that the United Kingdom is leading G20 nations with the fastest low-carbon transition since 2000, but it is China that sits atop the Index, having decarbonized its economy by 5.2% in 2017, and nearly halved the carbon intensity of its economy over the past ten years.
More specifically, while it is the world’s largest emitter, China is nevertheless outperforming its G20 peers and boasts the highest 2017 decarbonization level of 5.2%. In the past ten years that PwC has been publishing its LCEI, China has reduced the carbon intensity of its economy by a phenomenal 41% and has brought it on track to achieve its national target, its Nationally Determined Contribution (NDC).
Nevertheless, China still saw a 1.4% increase in emissions in 2017, and its carbon intensity still remains above the E7 average. Conversely, China still retains its position as a leading driver of renewable energy growth and is well on its way to meeting its pledge under the Paris Agreement to meet 20% of its energy in 2030 from low-carbon sources.
The other country to top one of the LCEI’s rankings was the United Kingdom, which sits atop the G20 leaderboard for its long-term low-carbon transition since 2000, decarbonizing at an average of 3.7% per year and reducing emissions by 29% since 2000 while simultaneously growing its economy by 34%. Emissions per megawatt-hour (MWh) have been cut by 29% over the last decade, and following the UK Government’s “Ultra Low Emission Vehicles” (ULEV) policy, the number of ULE vehicles on the road has grown by 40% per year on average.
“The UK is a global leader in driving the low carbon transition,” said Jonathan Grant, Director of Climate Change and co-author of the LCEI at PwC UK. “Renewables, energy efficiency and dominant growth of the services sectors all contributed to the UK’s top performance compared with other G20 countries.
“Following success in decarbonising the electricity sector, achieving the UK’s Clean Growth Strategy, which was launched last year, will now depend on faster progress in other sectors, such as transport and industry.”
Overall, however, while PwC notes that many countries have cut the carbon intensity of their economies over the past four years, the average 2.6% per-year decline remains less than half of what is required if we are to limit global warming to 2°C, as laid out in the Paris Agreement. Further, there is not a single country on track to achieve the necessary decarbonization rate, and without a “dramatic step up” in decarbonization efforts over the coming years, the report shows that the two-degrees carbon budget will expire in less than 20 years.
“There seems to be almost zero chance of limiting warming to well below two degrees — the main goal of the Paris Agreement,” explained Jonathan Grant. “Given the gap between talk and action on climate, the risks to business are obvious: fragmented, knee-jerk regulation and physical impacts of climate change.
“There are many solutions to this problem — governments just need to get on with implementing them. Recent reforms to the EU Emissions Trading System that raised the price of carbon this year are a good example of what’s needed.”
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