International accounting firm PriceWaterhouseCoopers has just released its latest Low Carbon Economy Index, an annual report on how the world’s transition to renewable energy is going. It makes very sobering reading, the more so because PwC can not by any stretch of the imagination be counted among the loony-left-alarmist greenies.
The whole report is not very long but I will present its key messages here, beginning with its ‘Foreword’ which is actually a one-page summary of its findings.
It’s time to plan for a warmer world. The annual Low Carbon Economy Index centres on one core statistic: the rate of change of global carbon intensity. This year we estimated that the required improvement in global carbon intensity to meet a 2°C warming target has risen to 5.1% a year, from now to 2050. We have passed a critical threshold – not once since World War 2 has the world achieved that rate of decarbonisation, but the task now confronting us is to achieve it for 39 consecutive years.
The 2011 rate of improvement in carbon intensity was 0.7%, giving an average rate of decarbonisation of 0.8% a year since 2000. … Even doubling our current rate of decarbonisation, would still lead to emissions consistent with 6 degrees of warming by the end of the century.
To give ourselves a more than 50% chance of avoiding 2 degrees will require a six-fold improvement in our rate of decarbonisation.
In the emerging markets, where the E7 are now emitting more than the G7, improvements in carbon intensity have largely stalled, with strong GDP growth closely coupled with rapid emissions growth. Meanwhile the policy context for carbon capture and storage (CCS) and nuclear, critical technologies for low carbon energy generation, remains uncertain. Government support for renewable energy technologies is also being scaled back. As negotiators convene every year to attempt to agree a global deal, carbon emissions continue to rise in most parts of the world.
Business leaders have been asking for clarity in political ambition on climate change. Now one thing is clear: businesses, governments and communities across the world need to plan for a warming world – not just 2°C, but 4°C, or even 6°C.
Partner, Sustainability and Climate Change, PwC
On p.3 they mention other warnings that we may be unable to avoid a temperature rise of more than 2°C:
Governments’ ambitions to limit warning to 2°C now appear highly unrealistic. This new reality means that we must contemplate a much more challenging future. Whilst the negotiators continue to focus on 2°C, a growing number of scientists and other expert organisations are now projecting much more pessimistic scenarios for global temperatures. The International Energy Agency, for example, now considers 4°C and 6°C scenarios as well as 2°C in their latest analysis.
Guy Rowland drew my attention to the report in a comment thread over at RealClimate, saying, “That sounds pretty bad to me,” and asked for comments.
Wili said, “It is bad. Beyond bad, really, if you’ve read what six degrees means in Lynas’s book of the same name,” and added Hansen (NASA) and Brown (WWI) to the list of experts predicting large temperature increases.
MARodger was slightly more positive: “PWC do not actually say it is all too late. Note the PWC conclusions – as well as talking of a need to start considering plans for a global temperature rise of 4°C as the 2°C limit will not be achieved with current rates of decarbonisation, they do not say 2°C is a totally impossible target, only that such a target ‘…suggests a need for much more ambition and urgency on climate policy, at both the national and international level.’
“This year the PWC analysis yields a required continual annual reduction in global carbon intensity of 5.1%, up from 4.8% last year. This is not good news but … the reductions achieved between 2004 & 2007 at least paralleled their suggested decarbonisation course. So when more folk come on board to address emission cuts, when denialists are at last treated as pariahs, then [their] graph can surely be steepened and brought back on course.”
Back to PwC: On p.8 they consider shale gas and conclude that it is not a solution, despite its short-term advantages, and may contribute to the problem:
The boom of shale gas in the United States that has helped push down emissions there has sparked a debate on the use of gas as a transition fuel to a low carbon economy. The development and widespread deployment of fracking technology in the US has lowered the price of natural gas and resulted in a fall in greenhouse gas emissions as it displaces coal in power generation (although some analysts have raised questions around the lifecycle emissions of shale gas). Despite concerns about the possible environmental impacts of fracking, a world-wide hunt for unconventional gas reserves had already begun – China, India, Canada, Mexico, Australia, Russia and Saudi Arabia are all known to have significant reserves.
Gas may buy some time much needed by the global climate system and help limit emissions growth – displacing coal with gas in power generation roughly halves carbon emissions. But low gas prices may also reduce the incentive for investment in lower-carbon nuclear power and renewable energy. … A shift to gas away from oil and coal can provide temporary respite, a necessary but not sufficient move to the low carbon challenge. At the same time, an over-reliance on gas, particularly in emerging economies expecting high energy demand growth, could lock in the dependence on fossil fuel.
Their text ends thus:
Increasing degrees of risk
Regardless of the outcomes at the UN climate change summit in Doha this year, one thing is clear. Governments and businesses can no longer assume that a 2°C warming world is the default scenario. Any investment in long-term assets or infrastructure, particularly in coastal or low-lying regions, needs to address more pessimistic scenarios. Sectors dependent on food, water, energy or ecosystem services need to scrutinise the resilience and viability of their supply chains. More carbon intensive sectors need to anticipate more invasive regulation and the possibility of stranded assets. And governments’ support for vulnerable communities needs to consider more drastic actions.
The only way to avoid the pessimistic scenarios will be radical transformations in the ways the global economy currently functions: rapid uptake of renewable energy, sharp falls in fossil fuel use or massive deployment of CCS, removal of industrial emissions and halting deforestation. This suggests a need for much more ambition and urgency on climate policy, at both the national and international level.
Either way, business-as-usual is not an option.
Edit, 20.12.19: the full report is no longer available on the PWC website.