Decarbonisation rate falls to 0.5%, the lowest level of decarbonisation for a decade at a time when we need action
No country in the G20 is decarbonising quickly enough to maintain a safe climate, according to new analysis by PwC.
This year’s Net Zero Economy Index shows progress on decarbonisation is falling alarmingly short of what is required to limit global warming to 1.5°C above pre-industrial levels, with nine of 20 major economies showing increases in carbon intensity over the last year.
Last year’s Index stated that going forward, a global decarbonisation rate of 12.9% was required to limit warming to 1.5°C, however in 2021, the global rate was just 0.5%, while the average in the G20 – who collectively account for around 80% of global energy-related emissions – was just 0.2%, its lowest level for two decades.
This has pushed the global rate of decarbonisation now needed to 15.2% year-on-year to meet the climate goals adopted in the Paris Agreement and endorsed at COP26 last year – in spite of any future shocks, such as the ongoing energy crisis.
Looking closer at some of the world’s leading economies, China achieved a 2.8% reduction in carbon intensity, while the US (0.1%), India (2.9%), Japan (0.6%), Germany (1.7%) and France (1.4%) all saw increases, in part due to the recovery from the pandemic.
The best performing country was South Africa (-4.6%), ahead of Australia (-3.3%), China (-2.8%), Turkey (-2.7%), Canada (-2.2%), Saudi Arabia (-1.8%), South Korea (-1.6%) and the UK (-1.5%).
The report notes that there is no single pathway to Net Zero with each country moving at a different pace by different means. Ultimately however, all nations must accelerate action, with a pressing need to reduce global carbon intensity by 77% by 2030.
Encouragingly, there is growing worldwide consensus by governments, investors, and businesses on the need for large-scale decarbonisation and an acceleration in the switch to renewable forms of energy.
Businesses are continuing to drive forward the climate agenda through the decarbonisation of their own organisations, improving the performance and resilience of their supply chains, and exerting their influence over others – for example more than 3,000 businesses and financial institutions are working with the Science Based Targets initiative (SBTi) to reduce their emissions by setting science-based targets.
The rise in energy prices and threats to supply have created a rush to fossil fuels in the short term; but strengthen the case for investment in renewable energy capacity for the long term.
Similarly, the financial case for energy efficiency has strengthened, especially in high energy-consuming and hard to abate sectors. Businesses will be looking at ways to consume less, while using energy more effectively, signalling a possible turning point in how we think about energy.