PwC report highlights lack of policy action over climate goals
Sunday’s start of the United Nations Climate Change Conference (COP26) is being overshadowed by a new PwC report that casts doubt on the ability of world governments to reach their primary objective, as a step towards saving the planet.
Even after the recent pandemic-related decline in world emissions, the report finds that the global rate of decarbonisation must increase five times to meet the Paris Agreement climate goal.
The 2015 Paris Agreement saw 195 countries agree to an accord to slow global warming and transform fossil fuel-driven economies within decades.
The objective was to cap global warming at “well below 2C”, with a view to limiting this figure to 1.5C.
But the PwC Net Zero Economy Index finds that global rate of decarbonisation must increase five times to meet that goal.
The report said: “The rate of decarbonisation required to achieve the 1.5°C objective set out in the Paris Agreement is five times as challenging, following a shortlived Covid-19 related decline in global emissions.
“As world leaders prepare to head to the UN Climate Summit: COP26, the PwC Net Zero Economy Index 2021 finds that a decarbonisation rate of 12.9 per cent — more than five times greater than what was achieved over the last year (2.5 per cent) and eight times faster than the global average over the course of the 21st century — is required to halve global emissions by 2030 and to reach net zero by mid-century.
Arthur Wightman, PwC in the Caribbean ESG leader and PwC Bermuda leader, said: “Over the past year, businesses and governments have significantly stepped up their ambition to act on climate change. However, the emissions gap continues to widen.
“We must heed what the climate science is telling us — higher ambition and an acceleration of action is needed to keep 1.5C in striking distance.”
Marisa Savage, ESG partner, PwC Bermuda, said: “Climate change matters to every business in every sector.
“It cannot be ignored, with ESG pressures intensifying from a broad group of stakeholders, including investors, regulators, consumers and employees.”
The report said: “Even with the global economic slowdown in 2020, no country in the Group of 20 (G20) was able to achieve the 12.9 per cent rate of decarbonisation required to limit warming to 1.5°C.
“Only a handful of countries have ever successfully achieved double-digit rates of decarbonisation.
“Although the majority of the G20 have set ambitious climate targets, these have yet to translate into clear policy actions that will deliver the changes needed.
“Global energy demand fell by 4.3 per cent in 2020, leading to a reduction in energy-related emissions of 5.6 per cent (from 2019 levels) as well as a decline in total global emissions.
“As a result, the rate of global decarbonisation (reduction in carbon intensity: energy-related CO2 emissions per dollar of GDP) reached 2.5 per cent, but this was just a slight increase from the 2019 rate of 2.4 per cent.
“However, the emission reduction resulting from this energy demand anomaly still falls way short of the progress needed to keep the temperature rise below 1.5°C.”