Shocking wake-up call on global warming – report stresses renewable energy investment needs
Despite the billions of investment being ploughed into renewable energy and low carbon technologies across the globe, the world is failing dramatically in its battle to stem the tide of global warming, according to research published yesterday by PricewaterhouseCoopers (PwC). “Governments and businesses can no longer assume that a 2oC warming world is the default scenario,” the firm says.
Any investments in long-term assets or infrastructure, particularly in coastal or low-lying regions, need to address “far more pessimistic” scenarios.
“The new reality is a much more challenging future in terms of planning, financing and predictability,” according to PwC’s Jonathan Grant, director, sustainability and climate change. “Even doubling our current annual rates of decarbonisation globally every year to 2050, would still lead to 6oC, making governments’ ambitions to limit warming to 2oC appear highly unrealistic.”
The analysis in this year’s PwC Low Carbon Economy Index shows clearly that the annual rate of reduction of carbon emissions per unit of GDP needed to limit global warming to 2oC, has “passed a critical threshold”. PwC points out the task ahead is mammoth, with the rate of reduction now required never achieved before.
While the increase in emissions intensity in 2010 has been reversed, there was only a 0.7% reduction globally in 2011 - it’s a fraction what is required against the international commitment to limit global warming to 2oC, PwC notes.
To limit global warming to 2oC would now mean reducing global carbon intensity by an average of 5.1% a year, a performance never achieved since 1950, when records began.
The issue is further complicated, PwC notes, by a slow market recovery in developed nations, but sustained growth in E7 economies which it warns could lock economic growth into high carbon assets.
Simple maths = shocking results
“While we’ve reversed the increase in emissions intensity reported last year, we’re still seeing results that are simply too little too late. We’ve now got to achieve, for the next 39 years running, a target we’ve never achieved before,” said Leo Johnson, partner, PwC.
“This isn’t about shock tactics, it’s simple maths. We’re heading into uncharted territory for the scale of transformation and technical innovations required.”
With less than four weeks to the UN Climate Summit in Doha, the analysis illustrates the scale of the challenge facing negotiations. As Grant says: “The challenge now is to implement gigatonne scale reductions across the economy, in power generation, energy efficiency, transport and industry, as well as REDD+ in forested nations.”
So in Doha and beyond, governments and industry have to put aside their differences and find a way to come together like never before to foster development and deployment of low carbon and renewable energy technologies. Frankly, the time for debate as to whether or not to support renewables (both deployment and R&D) should be long over, as Austin Brentley from Re-Nuble has also pointed out this week.
After all, as PwC’s Johnson says: “Whatever the scenario, or the response, business as usual is not an option.” So true. But then again business-as-usual has not been an option for a long time. Governments say it all the time. And to be fair, much as changed. Renewables growth has maintained momentum, while other sectors have struggled.
Is shale gas the answer?
With so many countries pulling back on their support policies for the sector (or considering it) as they grapple with the harsh economic realities we now live in, the PwC report is a timely reminder that they can ill afford to do so.
Of course, there will be many who will be quick to seize on the PwC report as further proof of the need to take forward initiatives on shale gas. And sure, PwC’s analysis does concede that at current rates of consumption, replacing 10% of global oil and coal consumption with gas could deliver emissions savings of around 3% a year (1gt CO2e per annum).
But the firm also warns this would simply “buy some time”. In fact it stresses that such a knee-jerk move towards shale gas would reduce the incentive for investment in lower carbon technologies such as renewables, and could lock in emerging economies with high energy demand to a dependence on fossil fuels.
The world can ill-afford for that to happen...it will be interesting to see what the International Energy Agency has to say this year in its World Energy Outlook due to be published next week. Check back here in a week's time to find out!
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