Brussels, 4 November 2022 – To meet the Paris Agreement goal and limit global warming to below 1.5°C over the next five years, we now need to decarbonise at a rate of 15.2% per year. This is clear from PwC’s “Net Zero Economy Index”, a report that calculates the speed at which G20 countries need to decarbonise their economies on an annual basis. The reduction in carbon emissions must accelerate to 11 times faster than the global average over the last two decades, a far higher rate than what any country has achieved to date. The current geopolitical and economic context is putting even more pressure on that goal, leading to “genuine risks towards future progress in the field of emissions reduction”, PwC reports.
In 2021, we fell even further behind in our efforts to keep global warming below 1.5°C over the next five years. The speed at which G20 countries are decarbonising their economies dropped to just 0.2% in 2021, the lowest level in over 10 years. Although that figure was impacted by the economic recovery following the Covid-19 pandemic, it has nonetheless had disastrous effects on global warming.
Average global decarbonisation needs to hit 15.2% per year
Last year, not a single member of the G20 was on track to achieve the Paris Agreement target to halve global emissions by 2030. However, this is required if we are to achieve climate neutrality by 2050. To get back on track and meet this target, an average global decarbonisation rate of 15.2% per year is now required, compared to the 12.9% required based on last year’s analysis. This would be 11 times faster than the global average for the past two decades, let alone what any country has achieved to date. Last year’s required decarbonisation percentage of 12.9% was already five times higher than the 2020 figure of 2.5%.
Fragile geopolitical and economic backdrop
Furthermore, the current geopolitical and economic context poses a genuine risk to future progress. Jochen Vincke, Partner in PwC Belgium’s Management Consulting practice, comments: “The current climate emergency, as well as the urgent need for a strong and sustainable economy, requires a decarbonisation rate of 15.2% per year. While we have observed a willingness to change, this is set against a fragile geopolitical and economic backdrop. The stimulation of the economy following the Covid-19 crisis has primarily served to impede recent progress. Rising energy prices may now serve as a wake-up call to persevere with new measures and investment, putting us back on track towards a climate-neutral economy.”
Need for strategic collaboration between nations, businesses and investors
Today more than ever, there is a need for strategic collaboration – between countries, businesses and investors – both at national and international level. Businesses, governments and investors will need to concentrate on the quick wins with the biggest impact to help us on our way towards 2030. At the same time, they must invest in longer-term measures to help reach the goals they had previously agreed to.
About the Net Zero Economy Index
The Net Zero Economy Index tracks the decarbonisation of energy-related CO2 emissions worldwide. The analysis is supported by the BP Statistical Review of World Energy, which outlines carbon emissions based on the consumption of oil, gas and coal for combustion-related activities. The analysis does not consider emissions from other sectors (e.g. AFOLU) or from any other greenhouse gases and does not allow for any stored carbon. As a result, this data cannot be directly compared with national emissions inventories.