Monday, November 05, 2012

PwC Index Indicates Near Impossible Task Toward Decarbonization

Nov 4: PricewaterhouseCoopers LLP (PwC) has released its annual Low Carbon Economy Index which they say centers on one core statistic: the rate of change of global carbon intensity. This year PwC estimated that the required improvement in global carbon intensity to meet a  2°C warming target has risen to 5.1% a year, from now to 2050. They indicate that the world has passed a critical threshold -- not once since World War Two has the world achieved that rate of decarbonization in a single year, but the task now confronting us is to achieve it for 39 consecutive years.

    According to PwC the 2011 rate of improvement in carbon intensity was 0.8%. Even doubling the rate of decarbonization, would still lead to emissions consistent with six degrees of warming. To give ourselves a more than 50% chance of avoiding two degrees will require a six-fold improvement in our rate of decarbonization.

    The 2011 "rate of improvement" in carbon intensity was 0.7%, giving an average rate of decarbonization of 0.8% a year since 2000. If the world continues to decarbonize at the rate since the turn of the millennium, there will be an emissions gap of approximately 12 GtCO2 by 2020, 30GtCO2 by 2030 and nearly 70GtCO2 by 2050, as compared to our 2-degree scenario.

    the report indicates that, "In the emerging markets, where the E7 are now emitting more than the G7, improvements in carbon intensity have largely stalled, with strong GDP growth closely coupled with rapid emissions growth. Meanwhile the policy context for carbon capture and storage (CCS) and nuclear, critical technologies for low carbon energy generation, remains uncertain. Government support for renewable energy technologies is also being scaled back. As negotiators convene every year to attempt to agree a global deal, carbon emissions continue to rise in most parts of the world. Business leaders have been asking for clarity in political ambition on climate change. Now one thing is clear: businesses, governments and communities across the world need to plan for a warming world -- not just 2°C, but 4°C, or even 6°C.

    The 2°C target was formally agreed at COP-15 at Copenhagen 2009, and is based on a carbon budget that would stabilize atmospheric carbon dioxide concentrations at 450 ppm which would give a 50% probability of limiting warming to 2°C. Governments have since agreed to launch a review in 2013 to consider strengthening the long-term goal to 1.5°C.

    The report indicates that, "Governments' ambitions to limit warning to 2°C now appear highly unrealistic. This new reality means that we must contemplate a much more challenging future. While the negotiators continue to focus on 2°C, a growing number of scientists and other expert organizations are now projecting much more pessimistic scenarios for global temperatures. The International Energy Agency, for example, now considers 4°C and 6°C scenarios as well as 2°C in their latest analysis.

    In the period leading up to the Copenhagen UN summit on climate change in 2009, major economies came forward and pledged carbon reduction targets for 2020. Analyses of those pledges suggest that they are collectively insufficient to meet a 2°C target. Even more worryingly, with eight years to go, it is questionable whether several of these pledges can be met.

    PwC discusses what it calls "The shale gas dilemma" saying, "The boom of shale gas in the United States that has helped pushed down emissions there has sparked a debate on the use of gas as a transition fuel to a low carbon economy. The development and widespread deployment of fracking technology in the US has lowered the price of natural gas and resulted in a fall in greenhouse gas emissions as it displaces coal in power generation (although some analysts have raised questions around the lifecycle emissions of shale gas). Despite concerns about the possible environmental impacts of fracking, a world-wide hunt for unconventional gas reserves had already begun – China, India, Canada, Mexico, Australia, Russia and Saudi Arabia are all known to have significant reserves.

    "Gas may buy some time much needed by the global climate system and help limit emissions growth – displacing coal with gas in power generation roughly halves carbon emissions. But low gas prices may also reduce the incentive for investment in lower-carbon nuclear power and renewable energy. Large scale renewables and low carbon technology such as CCS and nuclear will require significant amounts of political will, finance and time. Our analysis suggests that at current rates of consumption, replacing 10% of global oil and coal consumption with gas could deliver a savings of around 1 GtCO2e per year, or 3% of global energy emissions."

    Looking toward the upcoming UNFCCC 18th session of the Conference of the Parties (COP18) meeting, November 26 to December 7, 2012, at the Qatar National Convention Centre in Doha, Qatar, PwC indicates, "Regardless of the outcomes at the UN climate change summit in Doha this year, one thing is clear. Governments and businesses can no longer assume that a 2°C warming world is the default scenario. Any investment in long-term assets or infrastructure, particularly in coastal or low-lying regions, needs to address more pessimistic scenarios. Sectors dependent on food, water, energy or ecosystem services need to scrutinize the resilience and viability of their supply chains. More carbon intensive sectors need to anticipate more invasive regulation and the possibility of stranded assets. And governments' support for vulnerable communities needs to consider more drastic actions.

    "The only way to avoid the pessimistic scenarios will be radical transformations in the ways the global economy currently functions: rapid uptake of renewable energy, sharp falls in fossil fuel use or massive deployment of CCS, removal of industrial emissions and halting deforestation. This suggests a need for much more ambition and urgency on climate policy, at both the national and international level. Either way, business-as-usual is not an option."

    Access an overview and video discussion of the report (click here). Access the complete 16-page report (click here). Access the UNFCCC website for extensive information on the upcoming COP18 meeting (click here). [#Climate]

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