UK sets annual record for low carbon growth in G20: City should gear up for climate finance opportunity

Published at 00:01 AM on 12 October 2015

 PwC Low Carbon Economy Index 2015

  • Annual PwC analysis finds the steepest decline in global carbon intensity since 2000 – led by UK 
  • Report warns that business needs to build carbon costs and regulation into business decisions, with the power, transport and finance sectors particularly affected
  • Capital intensive low carbon revolution opens up potential for City to play a major role in global climate financing

The UK tops the G20 in the Low Carbon Economy Index with a record breaking 10.9% year on year decline in greenhouse gas emissions linked to energy usage.

The analysis by PwCmodels major economies’ carbon intensity - the measure of energy related greenhouse gas emissions per million dollars of GDP.

The UK’s record breaking 10.9% reduction is better than any reported in PwC’s analysis over the past seven years. Recent changes to the Climate Change Levy, Green Deal, and renewables incentives have raised concerns in the industry about stability of regulation and incentives designed to underpin the transition to a low carbon economy.

As a result the report describes the performance as “exceptional”, cautioning that it owes more to “circumstance than policy” with the closure of coal fired power stations, strong economic growth and a warmer winter among the factors.

  • The UK lowered its energy related emissions by 8.7% while delivering strong GDP growth of 2.6%. 
  • The fall in emissions resulted from both an absolute reduction in energy consumption of 6.3%, to levels lower than recorded in 1990, and a shift away from carbon intensive fuels.  
  • The biggest driver of the fall in emissions was a reduction in coal consumption of just over 20%, taking total coal consumption to less than half of its 1990 level.
  • This was supported by a 19% increase in renewable energy consumption, taking renewables’ share in overall energy consumption to 8.3%. 
  • Overall the rate of carbon emissions per million dollars of GDP reduced by 3.3% a year on average since 2000, higher than Germany, France, the US, China and the EU average.

Jonathan Grant, director, PwC sustainability and climate change comments

“While the annual record for the UK is headline grabbing, it’s the UK’s consistent performance since 2000, reducing carbon intensity by 3.3% on average a year that is notable. It’s critical to at a minimum, maintain it, and ideally increase it.

“The level the UK achieved is more than twice the level achieved globally, and with a deal in Paris on long term climate change on the horizon, is a strong long term competitive positioning. While business should expect and plan for more regulation on carbon emissions, this shows the UK has a head start on other countries. Maintaining the UK’s leadership requires stability not surprises in government policy.”

Examining the implications of a global deal on climate change for business and investment, the report warns that as carbon pricing is adopted in developed and major developing countries, that it “is time for industry to build carbon costs into investment decisions.”

For London’s financial markets, the global climate deal expected in December in Paris, has the potential to herald a new era for the sector, to support the financing of an estimated $700bn per annum investment needed in the EU and China alone to transition to a low carbon economy.

Jon Williams, partner, and specialist in financial services and climate change at PwC comments

“A low carbon revolution will be capital intensive, so the City could play a leading global role here.  There’s a huge opportunity for London in providing not just access to capital markets, but risk management and specialist new instruments and approaches to how that money will be raised.

“Given increasingly stringent capital requirements that financial institutions face, capital markets finance, and not just bank debt , will be required to scale up if the missing ‘clean trillion’ is to be funded. For that to happen, financial structures will need to be created that meet the risk-return requirements of capital markets, and that means more innovative public-private financing. There will also need to be more concerted efforts to build domestic capital markets in emerging economies that can efficiently recycle savings there into low carbon assets. The skills of the City are there to not just mobilise investors, but create innovative financial products to finance and insure the projects involved.

“Climate change also has profound implications for asset values held in the financial system, as tightening regulation and the transition to a low carbon economy increases risk. The uncertainty is not whether something will happen, but the size, predictability and timing. The currency of the issue was only underlined by the Bank of England’s warning last week of climate change’s potential to “threaten financial resilience and long term prosperity.””

With less than 50 days to go before Governments meet in Paris to agree how to tackle climate change, the analysis indicates positive signs of ‘uncoupling’ or economies that can grow while reducing or maintaining a the same level, their carbon emissions per unit of GDP. Breaking the link between emissions and economic growth is essential to avoid the worst impacts of climate change. Overall, carbon intensity has fallen by 2.7% in 2014, the steepest decline in seven years of the PwC analysis.  Global growth of 3.2% in 2014 was achieved with only 0.5% growth in energy related emissions.

Overall however, the level of reductions in greenhouse gas emissions per unit of GDP needed to limit global warming to 2°C has been missed for the seventh successive year. Rapid and sustained decarbonisation of around 6.3% is needed every year globally in order to limit global average temperature rise to 2°C. Emissions reduction targets submitted already by over 160 national governments Paris targets would only limit warming to 3°C by the end of the century, if they were achieved.

For interviews, or an embargoed copy of the report including the index of G20 nations, please contact [email protected]

Download the Report  here


Rowena Mearley, Senior Manager PwC Media Relations
Office +44 207 213 47 27 Mobile: + 44 7841 563 180 
Email : [email protected]


1.About The Low Carbon Economy Index (LCEI): The LCEI model combines energy-related carbon dioxide emissions with historic and projected GDP data, and the IPCC’s carbon budgets.  The model covers energy and macroeconomic data from individual G20 economies, as well as world totals. Details of our model structure are available the Appendix of the LCEI report. The analyses of the Paris targets are based estimates of the decarbonisation rates implied by the INDCs submitted to UNFCCC and include the full national inventory of emissions (i.e. emissions from land use change, forestry, and industrial process).

2. Last year, the world’s leading scientists estimated a budget for the total amount of carbon emissions the world could absorb without risking global warming of more than 2C. PwC’s annual calculations show that on the current business – as – usual trajectory, that budget will be used up in just 20 years, in 2036.

3. Carbon budget: The target is an estimate of how much countries need to reduce their energy related emissions by, while growing their economy, in order to limit global warming to 2°C.  2°C of warming is the limit scientists agree is needed to ensuring the serious risks of runaway climate change impacts are avoided.

4.Under the UN climate negotiations process, all countries are expected to put forward their pledges (Intended Nationally Determined Contributions or INDCs) with the collective aim of reducing greenhouse gas emissions globally to limit the potential for global warming to 2°C by 2100. In the lead up to Paris, governments have submitted target and plans on how they will tackle emissions. Known as INDCs, these targets imply a global average decarbonisation rate of 3% per year – more than doubling the business as usual rate since 2000. These national plans are expected to drive action in the power, transport and finance sectors.

5. A 3°C world is one in which the IPCC’s Fifth Assessment Report describes potential impacts including ocean acidification and frequent heatwaves and drought challenging global food supply and trade with knock on effects for migration and conflict.  Furthermore there is potential that rising numbers of species face extinction, and more frequent extreme weather events will cause infrastructure damage, loss of life and business disruption

6. Last week, the Governor of the Bank of England published a special report on climate change and financial stability in the insurance and investment management sector, warning that “the combination of the weight of scientific evidence and the dynamics of the financial system suggest that, in the fullness of time, climate change will threaten financial resilience and longer-term prosperity.”

About PwC

At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 157 countries with more than 208,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at

PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see for further details.

©2015 PricewaterhouseCoopers. All rights reserved




About PwC

At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 157 countries with more than 208,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at

PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see for further details. © 2016 PwC. All rights reserved

« AIM Awards celebrate 20th year alongside AIM exchange’s 20th birthday as winners are announced | Homepage | PwC comment on ONS house price data: Small dip in London house prices, but UK picture remains strong »

  • Contact us
  • +44 (0) 20 7213 1768

Specific and out of hours contacts