World leaders are set to meet in New York in two weeks time to discuss how best to address global climate change. High on the agenda will be working out how to wean countries off cheap fossil fuels while keeping their economies afloat.
A new report by consultancy PwC shows that for all the politicians’ promises, the global economy is still far from being “green”. Current efforts to incentivise cleaner economic growth are falling short of those needed to avoid dangerous global warming, it says.
Global carbon intensity – annual emissions divided by GDP – has fallen by 1.2 per cent, the report shows. But that somewhat masks what’s actually happening to global emissions.
Carbon intensity is a measure of how efficiently countries use their polluting energy resources, such as coal, oil and gas.
So long as a country’s energy sector emissions grow at a slower rate than its GDP, the carbon intensity of its economy falls. But although some countries are ramping up renewables, many still rely on burning large amounts of fossil fuels to drive economic growth.
As a consequence, global emissions have rapidly risen despite great progress in reducing the energy sector’s carbon intensity, as this chart shows:
As the global economy has grown over the past 25 years, global emissions have risen rapidly. That’s despite many countries improving their energy efficiency and switching from coal to less-polluting gas power.
Unless countries get more ambitious about restricting fossil fuel use, this trend is likely to continue. That’s why the slight fall in global carbon intensity isn’t particularly good news.
Keeping to two degrees
At this rate, the world could be set to warm by as much as four degrees above pre-industrial levels by 2100, PwC says.
Politicians have agreed to try and curb warming by two degrees. For that to happen, countries can’t emit more than around one billion tonnes of carbon dioxide, according to the Intergovernmental Panel on Climate Change’s (IPCC) latest report. At current rates, the world is likely to have emitted that amount by 2034, PwC says.
To keep within two degrees, it estimates that global carbon intensity must fall by 6.2 per cent a year, with the energy sector being totally decarbonised by the end of the century:
Source: PwC’s 6th Low Carbon Economy Index Report. Discrepancy from starting point compared to graph above is due to using different datasets. PwC does not provide raw data with its report.
That will be a major challenge. Many developing economies, including India and China, are growing largely thanks to the availability of cheap, high carbon, fuels such as coal. Even countries making better progress at cutting carbon intensity, such as the UK, continue to rely on fossil fuels for much of their energy.
PwC’s report shows just how tough government’s are finding it to decouple their economies from high carbon energy systems. For all politicians’ talk of promoting “green growth”, the data shows current policies are largely failing to deliver.