No country is decarbonising fast enough, PwC study finds

No country in the G20 is decarbonising quickly enough to maintain a safe climate, according to new analysis by business consultants PwC.

The PwC Net Zero Economy Index found that progress on decarbonisation is falling short of what is required to limit global warming to 1.5°C above pre-industrial levels, with nine of 20 major economies showing increases in carbon intensity over the last year.

In a similar study conducted in 2021, PwC said a global decarbonisation rate of 12.9 per cent would be required to limit warming to 1.5°C. But in 2021 the global rate was just 0.5 per cent, while the average in the G20 – who collectively account for around 80 per cent of global energy-related emissions – was only 0.2 per cent, its lowest level for two decades.

This has pushed the global rate of decarbonisation now needed to 15.2 per cent year-on-year to meet the climate goals adopted in the Paris Agreement and endorsed at COP26 last year.

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This rate, which is 11 times faster than the global average achieved over the past two decades, is further complicated by the current geopolitical and economic context, creating “real risk on future progress towards emissions reduction”, PwC said.

PwC’s Net Zero Economy Index tracks the progress G20 countries have made to reduce energy-related CO2 emissions and decarbonise their economies. This is done by measuring levels of energy consumption relative to economic growth as measured by Gross Domestic Product (GDP), and the carbon content of that energy.

China achieved a 2.8 per cent reduction in carbon intensity, while the US, India, Japan, Germany and France all saw increases, in part due to economic recovery from the pandemic. The best performing country was South Africa (-4.6%), ahead of Australia (-3.3%).

The report notes that there is no single pathway to net zero, with each country moving at a different pace by different means. Ultimately, however, all nations must accelerate action to reduce global carbon intensity by 77 per cent by 2030.

The Environmental Protection Agency (EPA) shows that overall greenhouse gas emissions in the Republic increased by 4.7 per cent in 2021. This increase is primarily driven by the recovery from the Covid-19 pandemic, with the easing of lockdown restrictions and the return of economic activity. But relative to 2019 emission levels, 2021 greenhouse gas emissions and energy industry CO2 emissions were still 1.1 per cent and 9.4 per cent higher respectively.

An EPA analysis found in June that Ireland faces a significant challenge to achieve its legally-binding 51 per cent emissions-reduction targets by 2030 in line with the Climate Action Plan 2021. The State is currently on-track for a reduction of between 9 per cent and 28 per cent.

“In Ireland, there remains much work to be done to decarbonise our economy and, in particular, to meet our carbon-neutral and net-zero commitments,” said Kim McClenaghan, a partner in PwC Ireland’s advisory, energy and utility practice.