PwC analysis finds meeting 2 °C warming target would require “unprecedented and sustained” reductions over four decades
05 November 2012
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| PwC analysis finds a need for global carbon intensity to drop an average of 5.1% per year through 2050. Click to enlarge. |
The low annual rate of global reduction of carbon emissions per unit of GDP needed to limit global warming to 2 °C—based on the probability assessments of the UN IPCC—is insufficient to achieve that goal, according to the latest Low Carbon Economy Index published by business consultancy PwC. The analysis is based on a carbon budget that would stabilize atmospheric carbon dioxide concentrations at 450 ppm and give a 50% probability of limiting warming to 2 °C.
Since 2000, the global rate of decarbonization has averaged 0.8%; from 2010 to 2011, global carbon intensity fell by just 0.7%. Because of this slow start, global carbon intensity now needs to be cut by an average of 5.1% a year from now to 2050. This required rate of decarbonization has not been seen even in a single year since the mid-20th century when these records began. Keeping to the 2 °C carbon budget will require “unprecedented and sustained” reductions over four decades, according to the PwC analysis. Even to have a reasonable prospect of getting to a 4°C scenario would imply nearly quadrupling the current rate of decarbonization.
This new reality means that we must contemplate a much more challenging future. Whilst the negotiators continue to focus on 2 °C, a growing number of scientists and other expert organisations are now projecting much more pessimistic scenarios for global temperatures. The International Energy Agency, for example, now considers 4°C and 6°C scenarios as well as 2°C in their latest analysis.
—PwC report
This year we estimated that the required improvement in global carbon intensity to meet a 2 °C warming target has risen to 5.1% a year, from now to 2050. We have passed a critical threshold—not once since World War 2 has the world achieved that rate of decarbonization, but the task now confronting us is to achieve it for 39 consecutive years.
This isn’t about shock tactics, it’s simple maths. We’re heading into uncharted territory for the scale of transformation and technical innovations required. Whatever the scenario, or the response, business as usual is not an option.
—Leo Johnson, Partner, Sustainability and Climate Change, PwC
The analysis in the PwC Low Carbon Economy Index measures the progress of developed and emerging economies towards reducing emissions linked to economic output. The report warns that “governments and businesses can no longer assume that a 2 °C warming world is the default scenario.” It adds that any investments in long term assets or infrastructure—particularly in coastal or low-lying regions—need to address far more pessimistic scenarios.
| “Governments’ ambitions to limit warming to 2°C appear highly unrealistic.” —PwC |
The issue is further complicated by a slow market recovery in developed nations, but sustained growth in E7 economies which could lock economic growth into high carbon assets.
Emerging markets’ previous trends on carbon emissions reductions linked to growth and productivity have stalled, and their total emissions grew by 7.4%. By contrast, the UK, France and Germany achieved record levels of annual carbon emissions intensity reductions, but were helped on by milder winters.
The risk to business is that it faces more unpredictable and extreme weather, and disruptions to market and supply chains. Resilience will become a watch word in the boardroom—to policy responses as well as to the climate. More radical and disruptive policy reactions in the medium term could lead to high carbon assets being stranded.
The new reality is a much more challenging future in terms of planning, financing and predictability. Even doubling our current annual rates of decarbonisation globally every year to 2050, would still lead to 6 °C, making governments’ ambitions to limit warming to 2 °C appear highly unrealistic.
The challenge now is to implement gigatonne scale reductions across the economy, in power generation, energy efficiency, transport and industry, as well as REDD+ in forested nations.
—Jonathan Grant, director, sustainability and climate change, PwC
The pace of reducing global carbon intensity has been slow despite growing international focus on climate change. The financial crisis has dampened progress further, with carbon intensity falling less than 1% in the four years since it began.
Examining the role of shale gas, PwC’s report suggests that at current rates of consumption, replacing 10% of global oil and coal consumption with gas could deliver emissions savings of around 3% a year (1gt CO2e per annum). However, the report warns that while it may “buy some time”, it reduces the incentive for investment in lower carbon technologies such as nuclear and renewables, and could lock in emerging economies with high energy demand to a dependence on fossil fuels.
Regardless of the outcomes at the UN climate change summit in Doha this year, one thing is clear. Governments and businesses can no longer assume that a 2 °C warming world is the default scenario. Any investment in long-term assets or infrastructure, particularly in coastal or low-lying regions, needs to address more pessimistic scenarios. Sectors dependent on food, water, energy or ecosystem services need to scrutinise the resilience and viability of their supply chains. More carbon intensive sectors need to anticipate more invasive regulation and the possibility of stranded assets. And governments’ support for vulnerable communities needs to consider more drastic actions.
The only way to avoid the pessimistic scenarios will be radical transformations in the ways the global economy currently functions: rapid uptake of renewable energy, sharp falls in fossil fuel use or massive deployment of CCS, removal of industrial emissions and halting deforestation. This suggests a need for much more ambition and urgency on climate policy, at both the national and international level.
—PwC report
PwC model. PwC divides the G20 into three blocks:
- G7 economies (US, Japan, Germany, UK, France, Italy, Canada).
- E7 economies—the BRICs (Brazil, Russia, India and China), and Indonesia, Mexico and Turkey.
- Other G20 (Australia, Korea, EU, South Africa, Saudi Arabia, Argentina).
The study draws on long-term GDP projections from an updated version of PwC’s World in 2050 model, which is based on a long-term GDP growth model structure. Each country is modelled individually but connected with linkages via US productivity growth (known as the global technological frontier). Each country is driven by a Cobb-Douglas production function with growth driven by:
Investment in physical capital.
Working age population growth (UN projections).
Investment in human capital (rising average education levels).
Catch-up with US productivity levels (at varying rates).
Real exchange rates will also vary with relative productivity growth. The results are not forecasts, but rather indicate growth potential assuming broadly growth-friendly policies are followed and no major disasters (e.g. nuclear war, radical climate change before 2050).
The study considers energy-related carbon emissions, driven by a series of assumptions including the primary energy intensity and fuel mix share. In 2012, PwC made two key changes to the assumptions in previous model versions:
Delaying the start of commercial CCS at scale from 2016 to 2021.
Updating country-specific rates of decline in energy intensity of GDP in 2001 – 2025 to better reflect relative historical progress between countries, and explicit policy targets in this area.
Resources
For the first time in modern history, a small sail boat went across the North-West passage from the Atlantic to the Pacific without touching ice. This would have been impossible just a few years ago.
That is one more confirmation that warming is going on.
Posted by: HarveyD | 05 November 2012 at 09:08 AM
http://www.youtube.com/watch?v=X-G6Z2xDuM4&list=UU-KTrAqt2784gL_I4JisF1w
Posted by: ai_vin | 05 November 2012 at 10:57 AM
It is interesting to see, how they consider only one way to lower temperature, while, in fact, there are other approaches - which are not unprecedented at all - for 280 billion dollars it is possible to lower temperature
see http://www.sciencedaily.com/releases/2008/12/081222114546.htm ( scientific papers with same claims could be could). are projects with this price tag unprecedented?
it is more like we would have to use these other approaches, rather than try to make things which are impossible to make ( though seems, lead cooled nuclear reactors, or some other new types of reactors, might prove cheap and ready to displace current coal, or relatively new supercritical co2 turbines could potentially have 40% reduction of emissions from coal plants for the same energy output, so the pace of reduction might be higher later ).
Even if the only option to reduce temperature is reduction of CO2 then the question is how for example things are 'unprecedented' ?
Say to move to all nuclear energy production will require only 5% of US GDP - is is less than variation in military spending ( 3-11% GDP ) http://bravenewclimate.com/2011/01/21/the-cost-of-ending-global-warming-a-calculation/ , so could be easily sustained . Other countries might follow.
So why numbers on CO2 reduction are interesting - wording in the 'research' reads like propaganda.
Posted by: Kurdakov | 05 November 2012 at 11:00 AM
Regardless of what options might be available as a solution, the action needed has to be a concerted effort by all. Which means humans a doomed.
Posted by: Brotherkenny4 | 05 November 2012 at 11:45 AM
One US political party mocks 'global warming'. This party has a recent eight year final Presidential approval rating of 22%, their VP's performance rating was 13%.
The same $billionaires and policies control the latest Republican offering.
Posted by: kelly | 05 November 2012 at 03:40 PM
Nuclear power has been so demonized that it's probably not possible to get it out soon enough.
You would think that the Fukushima "disaster" would be a sign to go FULL SPEED AHEAD ON NUCLEAR! 3 injuries and zero deaths from radiation, future deaths likely zero but in any case too few to measure. The Dai'ini and Onagawa plants came through smiling, and newer designs are even tougher.
Suppose that Fukushima prefecture isn't suitable for agriculture for the next 50 years. So what? It can become the nuclear power center for all of Japan! The worst that can happen is something else has a release (likely zero deaths), and you re-set the clock on when you can grow crops again; in the mean time, nuclear power keeps on providing energy.
People are all paranoid about one of the greatest success stories in the history of technology. This is nuts!
Posted by: Engineer-Poet | 05 November 2012 at 03:50 PM
Maybe E-P, but overcoming that paranoia will take more time than we have. So let's take a path with less resistance.
Posted by: ai_vin | 05 November 2012 at 05:16 PM
Kelly its far more complex then that.
Keeping people calm is not easy and one group keeps one bunch of loons calm and the other keeps the other group calm.. and we need to keep those two groups calm as long as possible.
So we need the skeptics doing thier job and the global warming people doing thiers or else we are toast.
We live in interesting times the most interesting in a very long time.. and thats the only FACT we realy have right now.
Posted by: wintermane2000 | 05 November 2012 at 05:26 PM
our comment about "interesting times" reminded me of the origin of those words.
It is reported that a Chinese Emperor ended his first meeting with a western explorer with the words, "May you always live in interesting times".
For many years it was thought of as a blessing. Many years later it was discovered to be a curse.
Posted by: Lucas | 05 November 2012 at 06:11 PM
I understood it as being part of a longer phrase:
"May you live in interesting times, and come to the attention of powerful people."
Posted by: Engineer-Poet | 05 November 2012 at 06:48 PM
Yup thats how I ment it;/
If you look at the trends it looks like we are in the same sort of cycle as the one that ended the egyptian empire. Now I dont expect it will end us but I do expect we wont end it.
Posted by: wintermane2000 | 05 November 2012 at 07:20 PM
I think we should do everything the same as it was in the 70-80s. I think a few years of extreme global cooling will offset the gravity of extreme global warming.
If only we could subdue volcanoes, cow farts, and termites.
O and as a republican, I'll fullfill my duty to hate the environment by realising R134a into it via canned air spray. None of that illeagal venting of R134a(refrigerant) as per EPA that will cost a min. of $75K.
winter its not good to imply that the world is beyond mans control, it offends certain parties.
I'm all for Coolplanet, and bluetower and the like. Those are allegedly sustainable. But to suppose we take extreme radical measures to address this or any problem might be the end of us.
Heck, if it was fiscally feasable (like a <5 year ROI). I'd suggest placing solar panels on every roof built in the last 3years and on. Thats a lot of surface area, and would offset tons of CO2, but it lacks feasablilty in the near term.
Even if the United States sequestered more CO2 than it realeased, how would you propose we do the same for the rest of the world?
Posted by: CheeseEater88 | 06 November 2012 at 05:14 AM
One can question if ours are particularly 'interesting'(implying cursed, dangerous, paranoid, etc.) times.
In the late 1700's, American government wasn't even formed, yet had the world's most powerful(British) empire as a vengeful enemy. One who would later invade, burn down Washington, DC., etc during the War of 1812.
Our leaders responded by creating the Bill of Rights - not the Patriot Act of federal citizen surveillance.
Course the founders of the US Constitution also had a degree of morality and common sense. They did not look at some papers, example - papers of incorporation, and say, "Your a citizen(united)- date my daughter, buy my elections, buy my representatives, buy my freedom.."
And just try to imagine George Washington compiling a 'kill list' of those 'all created equal' for 'disposition matrix'.. a bayonet for Ed, hang Joe, explode Saul(and anyone else at coordinates xyz on earth, etc..)
Posted by: kelly | 06 November 2012 at 05:53 AM
We need to accelerate R&D on next generation nuclear. Passively safe, factory-built molten salt reactors could give us energy cheaper than coal. The only way the coal stays in the ground is if it is uneconomic to dig it out and burn it.
Posted by: Nick Lyons | 06 November 2012 at 06:23 AM
I am not opposed to nuclear energy, but you will never get private industry to risk its capital. It will only happen if the Government guarantees the loans. If we are going to do that, I would prefer to underwrite solar and wind, but would not oppose all three. I do oppose oil and coal subsidies and wars.
Posted by: JMartin | 06 November 2012 at 07:50 AM
Wind farms are built in two years or less, sometimes in less than one year. Wind is the cheapest way to generate electricity.
Large commercial rooftop solar arrays are installed in weeks. The price of solar is dropping below ten cents per kWh.
These two generation technologies produce clean, safe electricity. They can be brought on line very rapidly.
We could convert our existing grids to 25% to 35% wind and solar with no changes or other additions to the the grid. We already have ample dispatchable generation and storage to fill in for when the wind isn't blowing or Sun shining.
Wind is now supplying 3.5% of our electricity, solar has yet to hit 1%. We could build the hell out of wind and solar for the next few years, get coal off our grids and minimize natural gas use.
By the time we hit the 25% to 35% hurdle we will almost certainly have finished development on cheap storage. We can then keep installing wind and solar while replacing natural gas with storage.
Throw in the other clean, renewable generation we have developed - hydro, geothermal, tidal, biogas/mass - and we can crack this nut. And in doing so we will create a lot of great American jobs, clean up our environment, and supply ourselves with all the cheap electricity we could ever want.
Posted by: Bob Wallace | 06 November 2012 at 11:16 AM
I would not be shocked if over the next 40 years nuke power goes from 20ish percent to 25-30% of the mix coal hopefully will drop some but I dont expect it to go away... hydro is fairly locked right now so its percentage will drop as total demand increases...
Soo the rest is up to the rest of our tech... Thats alot of power.
Its my hole truely industrial scale windmils will be designed in the next 20-30 years.. 20-50 mw units able to tap winds at 1000-2500 feet.
Posted by: wintermane2000 | 06 November 2012 at 04:52 PM
This is of extreme importance, because without dispatchable capacity the grid goes down. Nuclear power has very low variable costs and provides some of the firmest capacity the grid has; wind and solar can only provide firmness by generating at less than capacity, which increases their cost. Offloading the burden of firming to other generators increases their costs and CO2 emissions; the system might not allocate those costs to wind/solar, but consumers will pay anyway.
No, we couldn't. Radical changes in the type of powerplant on the grid and their operation would be required. From the above link:Increasing variable supply also increases the per-kWh fuel burn required to serve the remaining demand. There is No Free Lunch. If there is a solution, it is for "renewables" to be required to supply firm, dispatchable power with enough duration that other generators can be shut down until required.
Denmark has been about there for something like a decade, and they don't have it. Germany's PV generation now peaks at 50% of instantaneous Saturday demand, and this is handled by dumping steam and wasting fuel in thermal powerplants. Conventional hydro is maxed out, and is being removed in many places to restore rivers to their natural state. CAES would need to be exploding to make up the difference, and there's nothing of the sort going on. Handwaving doesn't generate enough wind to fill the lulls.
There are a few ways to manage such things, such as balancing variable supply with dispatchable demand. But the scale of the need is staggering; shaving Germany's 22.15 GW PV peak flat over the 10A-3P stretch would have required schedulable demand of nearly 7 GW, roughly 12% of peak grid demand. You could e.g. charge EVs from the excess, but absorbing 30 GWH of net generation at a peak of 7 GW would require a minimum of about 1 million such vehicles on the grid, soaking up the difference up to 6+ kW apiece for hours. You can "we'll almost certainly have" it, but there has been no effort to balance PV/wind variability this way with or without storage.
And that's with PV only generating 50% of instantaneous demand. How are you going to deal with it supplying 50% of the total? This is not going to happen.
Posted by: Engineer-Poet | 06 November 2012 at 07:29 PM
I meant 50% of total daily generation, of course; the peak would be much higher than total instantaneous demand.
Posted by: Engineer-Poet | 06 November 2012 at 07:30 PM
Good discussion, E-P.
Intermittency of solar and wind have been the Achilles' heel of RE. One way to overcome that is to use solar thermal in desert area with thermal energy storage for night time generation. HVDC lines will need to be built to transmit the electricity from the sunbelt to Northern Europe. This will give a firm and dependable solar capacity. Local solar PV's and wind turbines can be used to produce H2 for transportation or for H2-FC grid back up or for home CHP generation. H2-FC can come on line much faster than CCGT that will take a lot of time to spool up. Hydrogen economy will be the key for full RE implementatiion. Living things have thrived on solar energy alone for billions of years. Now, we have technologies that are 10-100x more efficient than photosynthesis. Electrolysis can be 75-80% efficient with the latest technology, and used in combination with home FC-CHP, can deliver 90%-99% efficiency in heat-led mode, for Northern Europe. Southern Europe has lower energy requirement than the North and can do well with just solar thermal with thermal energy storage for night-time generation, and BEV's for transportation with H2-FCV to take advantage of the wind to H2.
Germany is also designing and producing high-pressure CAES with storage of both high-pressure air and heat in different compartments to maximize storage capacity, for wind and solar PV electricity. Round trip efficiency is around 70% or higher, if my memory serves correctly, and is quite cost-effective.
I hope that the continual destructive weather pattern will help remind everyone of the problem of GW and Climate Change and that humanity will wake up before it will be too late! I further hope that governments around the world will be able to connect the dots...linking massive RE + H2 economy developments to massive job creation in order to solve current global unemployment and economic crises. Furthermore, the jobs created with RE will use a lot of low-skilled or unskilled labor that are increasingly difficult to employ in the manufacturing sector due to increasing automation. We can kill 3-4 birds with one stone!
Posted by: Roger Pham | 06 November 2012 at 08:20 PM
Posted by: Engineer-Poet | 06 November 2012 at 09:55 PM
German wind power is actualy casuing massive problems as they are dumping excess on other countries grids and those countries are begining to take steps to block this as its damaging thier grids and could soon start bringing them down even.
H2 isnt a distraction.. it turns something cheap into something more spendy that is STILL cheaper then gasoline and useful for those cars and trucks that need/can use that much total energy.
Its an option one that alot of people will need/want and thats all it ever had to be.
Posted by: wintermane2000 | 07 November 2012 at 12:44 AM
http://www.canrea.ca/site/wp-content/uploads/2009/03/canrea-six-ways-of-providing-base-load-power-from-wind-feb09.pdf
"The wind is always blowing somewhere so if widely distributed farms are linked together, we can always count on some wind production. How much? A study in the US mid-west showed that one third or 33% of annual power production from distributed wind farms could be counted on to supply base load with the same reliability as a coal power plant. Because generation sites would also be closer to demand, grid distribution losses would be cut from 7% to less than 2%. In Spain, where wind farms are distributed over the entire country, hourly variations in the supply from wind are
effectively eliminated - smoothing out the electricity supply from wind."
http://www.skepticalscience.com/renewable-energy-baseload-power-advanced.htm
Posted by: ai_vin | 07 November 2012 at 01:58 AM
http://www.abc.net.au/science/articles/2010/12/02/3081889.htm
http://www.global-greenhouse-warming.com/myth-of-baseload.html
Posted by: ai_vin | 07 November 2012 at 02:06 AM
Fabulous contributions E-P, Roger, Ai_Vin. Respect. Not forgetting the rest of the GCC family of regulars, thanks to you all (and PwC).
I'm linking my all time favourite source outlining energy systems options and integration. I think it's very relevant background.
David MacKay FRS Chief Scientific Officer in UK Govt Department for Climate Change, wrote and distributed (free) this wonderful review. A simple factual account of key contributing technologies. The book memorably quantifies and personalises the balancing energy sinks and sources.
This is the single most relevant book I've ever read on energy futures - and an almost essential 'primer' for any balanced and comprehensive public debate.
12 page summary :-
http://www.withouthotair.com/synopsis10.pdf
The whole book (12MB) :-
http://www.inference.phy.cam.ac.uk/sustainable/book/tex/sewtha.pdf
Please check it out.
I'm intereseted in the level of international collaboration we need to resolve these issues, commented on above...
I'm European and we need to work with and grid connect the desert states south of the Mediteranian (for Solar Generation) as well as Skandinavia (for Hydro Storage).
It seems to me compeltely appropriate that we need a new level of Global collaboration for a new level of Global problem. The outcome should be a more secure co-dependance and maybe even a peace dividend big enough to assist building a low carbon future.
There is no end to the jobs and investment, manpower, intelligence, (wisdom, leadership, clarity) required. The Carbon Capture Storage alone, required by our coal burning brothers around the world (whatever we think of it) excedes the size of the current oil and gas industry (whilst employing similar skills and technologies).
Jobs for all for Life...Let's get started.
Posted by: Robert | 07 November 2012 at 05:34 AM