4 October 2018: PricewaterhouseCoopers (PwC) Low Carbon Economy Index (LCEI) 2018 finds that national decarbonization rates do not match the level needed to achieve commitments under the Paris Agreement on climate change. The top performing countries on the Index are China, Mexico, Argentina and the UK, all of which grew their economies while reducing their greenhouse gas (GHG) emissions.

The report titled, ‘Time to Get on with It: The LCEI 2018: Tracking the Progress G20 Countries Have Made to Decarbonize Their Economies,’ finds that the gap between the current decarbonization rate and the rate needed to limit global warming to 2°C above preindustrial levels is widening. In 2017, no country was on track with the decarbonization rate needed to achieve the Paris Agreement temperature goal. Over the past four years, the Index reports that many countries have cut the carbon intensity of their economies but the average decarbonization rate of 2.6 percent annually “remains less than half of what is required.” The report cautions that each year that the global economy fails to decarbonize at the 3 percent average rate needed to meet the Paris Agreement, “the two degree goal becomes more difficult to achieve.”

The biggest factor in emissions changes in recent years is the growth in coal consumption, which has risen by one percent. Although coal consumption remains below the 2013 peak, coal remains the largest energy source in countries such as Turkey, Indonesia and India. All three of these countries have experienced growth in heavy industrial sectors, which has contributed to increasing coal emissions.

There is no shortage of solutions to limit warming to 2°C; governments and business just need to implement them.

Wind, solar and other renewable energy sources have risen by 17 percent, driven by increased government investment and decreasing prices. Solar energy grew 35 percent, including 87 percent in India, 76 percent in China and 41 percent in the US. Mexico and Brazil have invested in scaling renewable power, which has helped them move up the Index.

China leads the LCEI with a decarbonization rate of 5.2 percent in 2017. Over the past ten years, China has reduced the carbon intensity of its economy by 42 percent, which puts the country on track to achieve its nationally determined contribution (NDC) under the Paris Agreement. China has also made “significant strides” towards meeting its commitment to generate 20 percent of its energy from low-carbon sources by 2030. Despite China’s “impressive statistics” over the past yen years, PwC cautions that in 2017, China’s emissions increased by 1.4 percent and its carbon intensity still remains about the Emerging 7 (E7) average.

Among the Group of 20 (G20) countries, the UK has had the fastest low carbon transition since 2000, decarbonizing at 3.7 percent annually. The UK has grown its economy by 34 percent since 2000 while reducing its emissions by 29 percent. The UK has achieved this decarbonization rate through an ‘Ultra Low Emission Vehicles’ strategy and increasing its renewable energy use, including a 33 percent increase in wind energy and a 22 percent increase in solar generation over the past year. According to the Index, the UK’s absolute carbon intensity is comparable to France, Brazil and Italy.

The Index’s accompanying report emphasizes that there is “no shortage of solutions” to limit warming to 2°C; “governments and business just need to implement them.” Among the solutions featured in the report is the systemic deployment of Autonomous Electric Vehicles, which the report states could “bridge one-third of the emissions gap” needed to limit warming to 2°C. The report also highlights the potential of blockchain and other technologies to disrupt the current high carbon economic model.

The LCEI model combines energy-related carbon dioxide (CO2) emissions with historic and projected gross domestic product (GDP) data and the Intergovernmental Panel on Climate Change (IPCC) carbon budgets. PwC has produced the LCEI for the past ten years. [Publication: Time to Get on with It: The LCEI 2018: Tracking the Progress G20 Countries Have Made to Decarbonize Their Economies] [Report Interactive Website] [PwC Press Release]