China Leads Decarbonization Race As Global Carbon Intensity Falls 2.8%, Says PwC

November 2nd, 2016 by Joshua S Hill

The latest Low Carbon Economy Index report from PwC has revealed that China led the way in decreasing its carbon intensity during 2015, in a year which saw global carbon intensity drop by 2.8%, double the average fall of 1.3%.

PwC published its latest Low Carbon Economy Index report on Tuesday, detailing the carbon intensity of the world’s major economies — where carbon intensity is the emissions per unit of GDP. In the past, carbon intensity went up alongside economic growth, a pairing that many economists and experts believed was inseparable. However, over the last few years we have seen time and time again that economic growth need not necessarily also see a rise in carbon intensity.

The Index first of all revealed that decarbonization in 2015 jumped dramatically at 2.8%, double the recent average of 1.3%, though unsurprisingly still short of the rapid reductions we need to achieve a cessation to global warming. Specifically, the Intended Nationally Determined Contributions pledges made by countries for the global decarbonization of the economy require an average of 3% per year, requiring what PwC describes as “a step change in government policies to reduce emissions and support clean infrastructure investment.” As can be seen below, however, this is still far below the annual decarbonization rate required if we are to keep global warming to below 2°C.



“In 2015 the world economy decarbonised at record levels but it still falls far short of the rapid reductions needed to achieve the two degrees goal,” said Jonathan Grant, sustainability and climate change director at PwC. “With each passing year, the global challenge gets tougher. To stay within the two degrees carbon budget the annual reduction in carbon intensity now needs to reach 6.5%, up from 5.1% four years ago.”

“On business as usual trends we’ll use up the two degrees global carbon budget for this century by 2036. But our Index shows that national targets set in the Paris Agreement only buy another four years. If governments want to hit the global goal of ‘well below two degrees’ they will need to raise the ambition of their targets immediately and do much more to accelerate low carbon investment.”

Commenting on the information revealed in the report, Richard Black, director of the Energy and Climate Intelligence Unit (ECIU), said:

“This analysis shows once again that economic growth and carbon emissions are not inextricably linked. Over the last year the global economy has grown by about 2.5 percent, but in major economies at least, that’s exceeded by the rate of decarbonisation.”

When looking at the performance of individual countries in this year’s Index, China for the first time topped the list of countries in terms of its change in carbon intensity. Some outlets are somewhat inaccurately saying that China topped carbon intensity, which would mean they had the highest level of emissions per GDP, which is not something we are applauding here. Rather, China decreased its carbon intensity by 6.4% in 2015, beating out the UK which decreased its carbon intensity by 6%, and the United States which decreased its carbon intensity by 4.7%. China’s annual target for carbon intensity decrease is 3.5%, based on its Paris INDC, which puts it off to a good start.

“Coal consumption falling has been the most significant factor in leveling China’s emissions and is partly the result of policies to improve air quality and power plant efficiency,” explained Jonathan Grant, referring to China’s impressive carbon intensity decrease. “And although it is a small part of China’s economy, solar power grew by 70% in 2015.”

The question asked by the Index report is whether coal consumption in China has already peaked, given the country’s sudden rise to the top of the Index. China currently consumes half the global coal output, so it is unsurprising that when China modifies its policies towards coal, which in turn affects its coal consumption, there are global changes as well. In 2015, Chinese coal consumption fell by 1.5%, or around 29 million tonnes of oil equivalent (Mtoe) — compared to the UK’s total consumption of 23 Mtoe.

“The success has largely come from reducing use of coal, especially in China which has taken extraordinary steps this year to clean up its act and is now erecting two wind turbines every hour,” added Richard Black of the ECIU). “And that is very significant, because climate science is unequivocal in showing that switching away from coal is an essential first step in keeping climate change within ‘safe’ limits.”











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