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Global rate of decarbonisation must increase by five times to meet Paris Agreement climate goal

03 November, 2021

An annual decarbonisation rate of 12.9% is now required to achieve the 1.5ºC objective, more than five times greater than what was achieved over the last year.

In Ireland, as reported by the Environmental Protection Agency, overall emissions only fell by 3.6% last year.

Globally, the rate of decarbonisation required to achieve the 1.5°C objective set out in the Paris Agreement is a multiple of the COVID-19-related decline experienced last year.

A photo of wind turbines towering over the surface of the sea at dusk.

The PwC Net-zero Economy Index 2021 (which tracks the decarbonisation of energy-related CO2 emissions worldwide) finds that a decarbonisation rate of 12.9%—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—is required to halve global emissions by 2030 and to reach net zero by mid-century. This is the trajectory needed to meet the Paris Agreement goal of 1.5°C and avoid catastrophic climate change.

Global energy demand fell by 4.3% in 2020, leading to a reduction in energy related emissions of 5.6% (from 2019 levels) as well as a decline in total global emissions. As a result, the rate of global decarbonisation (reduction in carbon intensity: energy-related CO2 emissions per dollar of GDP) reached 2.5%, but this was just a slight increase from the 2019 rate of 2.4%. However, the emission reduction resulting from this energy-demand anomaly still falls way short of the progress needed to keep the temperature rise below 1.5°C.

Even with the global economic slowdown in 2020, no country in the Group of 20 (G20) was able to achieve the 12.9% rate of decarbonisation required to limit warming to 1.5°C. Only a handful of countries have ever successfully achieved double-digit rates of decarbonisation. Although the majority of the G20 have set ambitious climate targets, these have yet to translate into clear policy actions that will deliver the changes needed.

Delivering net zero by mid-century will require collaboration between sectors and across industry, however businesses can't go it alone. To deliver climate action at the scale required, the private sector needs clear and consistent signals from government that incentivise corporate climate action. Government and business leaders must 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 take more decisive action now.

According to the EPA, overall greenhouse gas emissions in Ireland decreased 3.6% in 2020 and energy industry emissions decreased by 7.9%.This decrease in 2020 for Ireland was primarily driven by economic restrictions imposed in response to the pandemic, reduced peat use in power generation and an increase in renewable generation.

Kim McClenaghan, Partner of PwC Advisory, Energy and Utility Practice said: "Sustaining Ireland's 2020 rate of decarbonisation will require significant investment and bold action. Our research tells us that many of Ireland's largest companies are making significant progress in committing to science based targets, which is a very important step towards the highest ambition levels. However, there is more to do as PwC's 2021 CEO survey highlighted a disconnect between the importance many CEOs place on climate change and how much they are prepared to invest towards a sustainable environment".

Ireland's climate ambition (the Climate Action and Low Carbon Development (Amendment) Bill 2021 (and which was passed into law) sets out Ireland's objective to achieve a climate-neutral economy no later than 2050, in line with the Paris agreement. Ambitious carbon budgets will now be approved, indicating a range of targets for each sector as binding goals. The importance of the nearer term targets are also essential if we are to halve emissions this decade.

Kim McClenaghan concluded: "The scale and pace of the economic and societal change and investment needed to achieve these targets are significant, but they will be necessary to reduce our emissions consistently and achieve the 1.5ºC goal set by the Paris Agreement. All sectors of the economy will need to transform to deliver net zero".

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Kim McClenaghan

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Tel: +353 1 792 6912

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Corporate Communications, PwC Ireland (Republic of)

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