Gold Magazine December 2013 - January 2014, Issue 33 | Page 65

GLOBAL WARMING

IPCC
carbon
budget
to 2100
will be
used by
2034
New PwC analysis
sounds warning

A

ccording to a
PwC analysis, the world
is on track
to blow the
2°C carbon
budget, estimated by the
IPCC for the
next 89 years,
within 21 years. This puts the world on a
path consistent with potential global warming of around 4°C by 2100, the most extreme scenario presented in the recent IPCC
5th Assessment Report on climate science.

Italy, the UK and
Argentina rank as
the most energyefficient economies
in the G20

The results, from the 5th annual PwC Low
Carbon Economy Index, examine the
amount of energy-related carbon emitted
per unit of GDP needed to limit global
warming to 2°C.
The report warns that this level of warming
“will have serious and far-reaching implications.” Current investment planning cycles
for major business and infrastructure investments now need to factor this into their
decision making.
It finds that policies and low carbon technologies have failed to break the link
between growth and carbon emissions in
the global economy. The world’s energy
mix remains dominated by fossil fuels:
• Reductions in carbon intensity globally
have averaged 0.7% per year over the
past five years – a fraction of the 6%
reductions now required every year to
2100
• The G7 averaged a 2.3% reduction while
the E7 – which includes much of the
manufacturing base of the global economy – only managed 0.4%
• The US, Australia and Indonesia
achieved significant reductions in carbon
intensity in 2012, but no country has
sustained major reductions over several
years
• While the fracking revolution has helped
lower emissions in the US, cheaper coal
has contributed to higher coal usage
elsewhere, for example in the EU, raising concerns that decarbonisation in
one country can just shift emissions elsewhere.
If the world continues at current rates of
decarbonisation, the carbon budget outlined
by the IPCC for the period 2012-2100 will
be spent in less than a quarter of that time
and be used up by 2034. Emissions over and
above that budget will increase the chances
of dangerous climate change, with the average warming of surface temperature projected to be beyond 2°C.
Energy efficiency progress was one bright
spot in the analysis. Some 92% of the small
reduction in carbon intensity achieved last
year is down to improvements in energy
efficiency with the remaining 8% through
a shift towards a cleaner energy mix. Italy,
the UK and Argentina rank as the most
energy-efficient economies in the G20,
consuming less energy for every $1m of
GDP generated than their counterparts.
But the report warns that there is a limit
to which we can cut energy use per unit of
GDP.
Jonathan Grant, director, PwC sustainability and climate change said:
“Our analysis assumes long term moderate

economic growth in emerging economies,
and slow steady growth in developed
economies. But, failing to tackle climate
change is unlikely to result in such a
benign scenario of steady growth. Something’s got to give, and potentially soon.
This has implications for a raft of investments in carbon intensive technologies
that are currently being planned and executed today.”
The PwC Low Carbon Economy Index calculates the rate of decarbonisation
of the global economy that is needed to
limit warming to 2°C. In 2013, the Intergovernmental Panel on Climate Change
(IPCC) issued its Fifth Assessment Report, which includes a carbon budget for
the remainder of this century giving a
reasonable probability of limiting warming to 2°C.
In 2008, the PwC LCEI, calculated that
to maintain growth without exceeding
two degrees of warming, the G20 needed
to improve its carbon intensity at 3.5%
per year. Over the next four years the rate
of decarbonisation failed to exceed 0.7%.
By 2012, to make up for lost ground, the
rate had risen to 5.1%, requiring a rate of
decarbonisation never achieved in a single
year to be sustained for the rest of the
century. This year’s report increases that
rate to 6%.
Energy gener