Reaching net zero Change

Time to act is now

We need to accelerate the progress on decarbonising the economy to hit our bold targets, says PwC

PwC’s latest Net Zero Economy Index found that a decarbonisation rate of 12.9% (up from 11.7% last year) is now required to achieve the 1.5ºC climate goal – more than five times greater than what was achieved over the last year (2.5%) and eight times faster than the global average over the course of the 21st century.

Tracking a complete year of energy and economic data from 2020, PwC’s Net Zero Index shows that, in 2020, due to the impact of Covid, energy demand fell by 4.3%, leading to a reduction in energy related emissions of 5.6% (from 2019 levels) and a fall in total global emissions. There was a notable 4.6% reduction in coal consumption and 9.3% reduction in oil consumption. However, as economic activity rebounds worldwide, so do emissions, driven by an increase in demand for coal in electricity generation in particular.

The UK achieved a 6.5% rate of decarbonisation in 2020. This was linked to a significant reduction of 15.7% in energy related emissions as a result of the pandemic. For the UK to deliver on its climate commitments and align with the 1.5°C Paris goal it will need to significantly accelerate progress on decarbonising the economy.

Mexico and Indonesia recorded the highest rates of emission reductions relative to their economic growth at 12.4% and 10.6% respectively. These results are expected to be an isolated occurrence rather than evidence of a longer-term trend as economic activity resumes and both countries have announced plans to invest in fossil fuel production in 2021.

No country in the G20 was able to achieve the 12.9% rate of decarbonisation required to limit warming to 1.5°C.

Kiran Sura, Assistant Director in the Sustainability & Climate Change at PwC UK, said: “World leaders need to heed what the climate science is telling us – we need higher ambition and an acceleration of action to keep 1.5°C in striking distance. The window of opportunity is narrow so it’s imperative we see more decisive action from world leaders.

“We also need to ramp up efforts to enhance adaptation and build resilience globally to manage the impacts of climate we have already locked in, especially for those countries on the frontlines of climate change who are least able to adapt.”

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