IPCC 5th Assessment Report - Energy mix is far off a carbon fix.
September 26, 2013
Jonathan Grant & Lit Ping Low examine some of the significant shifts in energy and emissions from PwC's Low Carbon Economy Index, in advance of the publication of the Intergovernmental Panel on Climate Change's Fifth Assessment Report
PwC’s Low Carbon Economy Index has tracked the changes in global, and the G20’s carbon intensity (the measure of carbon per unit of GDP), since 2008. Since then, global carbon intensity has fallen by an average of only 0.7% a year, a fraction of what is required to keep emissions on track to limit global warming to 2C by 2100. Reviewing the last five year’s progress, it shows that:
- 92% of the small reduction in carbon emissions intensity is accounted for by energy efficiency improvements, and only 8% through a shift towards cleaner energy
- Even as we become less dependent on oil for energy, the global fuel mix remains heavily reliant on fossil fuels, with coal in particular experiencing increasing usage
- The overall share of gas in 2012 has been relatively unchanged from 2000-2007, undermining the belief that shale gas is revolutionising the energy mix
- The share of renewable energy sources increased from around 7.2% to 8.6%, with the rate of increase in the last five years significantly higher compared to 2000-2007
- Despite the levels of investment in Europe the share of renewable energy remains below 10% of the total energy mix in the EU
The emphasis is on energy efficiency as a cheap, and effective way to get quick wins on emissions reduction, but it’s nowhere near the scale of change we really need. The worry for a business is that policy shocks force action on climate change rather than incentives and innovation.
The IPCC report will be the most authoritative review of the science of climate change we have ever had, with an intense review process and scrutiny over the findings. While there may be debate about some of the details, the main message of the report is clear: climate change is real, and governments and business need to take action to address the potential risks.
For many companies, the debate about the science is over. They recognise that climate change is happening, are identifying risks to their business and making investments to address them. Four out of five companies in the CDP / PwC Global 500 index have reported physical impacts of climate change as a risk. Over half consumer goods companies (53%) have stated that changes in rainfall extremes and droughts are a particular threat to their operations.
Read PwC's full IPCC AR5 Preview here.