New figures show that without swift action, global warming will become uncontrollable. The ensuing droughts, famines and floods will cause chaos worldwide. The only way to avert tragedy is to act now. By Giles Crosse
The risk consultancy PricewaterhouseCoopers (PwC) has analysed economic growth rates and greenhouse gas emissions for all the G20 economies. PwC warns against any complacency on global warming’s impacts. The company says that global economies must cut energy-related carbon emissions for every dollar of GDP by 6.2% every year from now to 2100.
If global warming is limited to 2°C, it would prevent the most damaging impacts. PwC’s 6.2% target also includes economic growth. If it is met, they say that growth and living standards can still rise without harming the planet.
Growth and climate change to date
Thus far, decoupling growth from carbon emissions has proved tough for the world’s economies. Conventional economic growth has long been tied to the exploitation of fossil fuels and resource consumption. Solving the problems requires a major change of thinking. Political and social stability both rely on economic growth, but making more things is driving global warming.
How do the world’s economies stack up?
Australia recorded a decarbonisation rate of 7.2% over 2013, putting it top of the G20 list. Three other countries, the UK, Italy and China, achieved a decarbonisation rate of between 4% and 5%. Five countries however increased their carbon intensity over 2013. These were France, the US, India, Germany and Brazil.
20 year deadline
On today’s rates, the time to act is scarce. All the carbon the world can emit this century to limit climate change to 2°C will be released within the next 20 years. Unless action is taken, warming of more than 2°C will be inevitable.
Leo Johnson, Partner, PwC Sustainability and Climate Change said: “After a decade of carbon inertia, we are way behind, and now need to decarbonise at more than five times our current rate to avoid 2°C.
“But there are reasons for optimism. The E7 group of emerging economies has woken up to the business logic of green growth, decarbonising faster than the G7 for the first recorded time. Renewables are emerging fast. As they approach cost parity the stage is set for a policy framework that shifts subsidies away from fossil fuels and accelerates the renewables rollout.”
Renewable electricity generation has grown by around 16% over the last decade. This means energy sources like wind and tidal power now account for nearly 10% of the total energy mix in six of the G20 economies. PwC’s research came out shortly before the UN’s September summit on climate change in New York. The paper’s convenient timing made it a lobbying tool for world leaders.
The numbers we have to hit
1) Annual energy-related emissions in the G20 need to fall by one third by 2030 and just over half by 2050 to stay within the 2°C budget.
2) Collectively, the G7 group needs to almost double its decarbonisation to 4.2% per year between 2014 and 2020.
3) Absolute carbon emissions, not just those related to energy, need to fall by 44% by 2030 and 75% by 2050 relative to 2010 levels.
4) For the E7, a carbon intensity reduction of 8.5% per annum is required from 2020, followed by further reductions of 5.3% a year from 2030 to 2050 to stay within the 2°C budget.
Jonathan Grant, Director, PwC Sustainability and Climate Change, said: “What we’ve seen over the past 12 months is a subtle change in the carbon rhetoric. The costs of climate inaction, from flooding to energy costs appear to be growing stronger. A broader recognition is needed by business and political leaders. Taking decisive action to avoid the extremes of climate change is a precondition for sustained economic growth.”
Some corporates have already reacted to the calls for action. Tesco has cut transport emissions by 14% in the UK in the last two years. This comes on top of a 50% reduction achieved between 2006 and 2012.
Instead of transporting from Poland to its distribution centre in Middlesbrough by road, Tesco now uses a short sea route from Gdynia in Poland. Goods come directly to Teesport, the UK’s third largest port, next to the supermarket’s Middlesbrough Distribution Centre. In addition to reducing road travel by over 80%, Tesco estimates this saves over €300,000 per year.
There are, therefore, simple opportunities for global business to grow by embracing carbon challenges. Business must become more adaptive, neutralizing carbon threats and making money. All it takes is true recognition of the danger carbon poses. Shifting to more benign economies and power sources is a no-brainer.