Global carbon budget blown by 2034

Analysis by PwC reveals that the IPCC's "carbon budget" to limit global temperature rise to 2°C by 2100 will be blown by 2034, with a rise of 4°C more likely by the end of the century

The consultancy warns that the 2034 timeframe is within the planning cycle for major infrastructure and business investment decisions, and that firms which do not take the budget into consideration when deciding where to invest risk wasting money on assets that will become obsolete.

The annual low-carbon economy index (LCEI) from PwC examines the amount of energy-related carbon emitted per unit of gross domestic product (GDP) needed to limit global warming to 2°C.

The latest findings show 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, says PwC, noting that reductions in carbon intensity globally have averaged just 0.7% a year over the past five years – a fraction of the 3.5% annual cut that it said in 2008 was necessary every year to 2100 to prevent temperatures breaking the 2°C threshold.

If the world continues at the current 0.7% rate of decarbonisation, the carbon budget outlined recently by the IPCC for the period 2012 to 2100 would be spent in less than a quarter of that time, and be used up by 2034, reports PwC. It calculates that annual reductions in carbon intensity now need to reach 6% to make up for lost ground, and provide a reasonable probability of limiting warming to 2°C.

“Something’s got to give, and potentially soon,” warned Jonathan Grant, PwC director for sustainability and climate change, who said the latest LCEI findings had implications for a raft of investments in carbon-intensive technologies that are currently being planned and executed.