TORONTO – PwC’s Low Carbon Economy Index analysis shows global emissions growth slowed in 2016, rising only 0.4 per cent while global GDP growth was 3.1 per cent. Carbon intensity has been falling at around 2.6 per cent for the past three years. This is a clear change from the historical rate, which averaged 1 per cent per year up to 2014.
This year’s decarbonization rate of 2.6 per cent is less than half of what is required to limit global warming to below two degrees.
Canada reduced its GHG emissions while continuing to grow its economy, although at a more moderate pace as compared to G20 leaders. Canada’s decrease in emissions intensity slowed between 2015-2016 to 2.1 per cent, down by half from its 2014-2015 rate of 4.2 per cent. The slow down brings Canada back in line with its average annual decrease in intensity over the last 15 years.
UK and China lead the G20 on clean growth, decarbonizing their economies by 7.7 per cent and 6.5 per cent respectively in 2016 – the result of tackling coal consumption and improving energy efficiency while growing their economies.
Now in its ninth year, PwC’s Low Carbon Economy Index tracks G20 countries’ progress in reducing the carbon intensity of their economies – i.e. energy-related greenhouse gas emissions per million dollars of GDP.
“Since signing onto the Paris Agreement in 2015, and reaffirming that commitment through the Vancouver Declaration, Canada has taken important steps at federal, provincial, territorial and municipal levels to transition our economy towards low-carbon energy,” says David Greenall, director, sustainable business solutions, PwC Canada. “This transformation is complex, and a step-change acceleration in this transition will be required to achieve our 2030 greenhouse gas reduction ambitions, let alone the reductions required to keep global warming to two degrees Celsius or below.”
“Canadian companies need to consider how they will integrate climate change into their strategic and financial risk analysis, as well as accurately price and disclose climate financial risk, and financial institutions must substantially increase their investments in low carbon development,” adds Greenall.
Top performers, such as the UK, China, Mexico and Australia, all reduced their emissions while growing their economies. Countries at the bottom of the Index, including Indonesia, Argentina, Turkey and South Africa all had emissions growth which exceeded their GDP growth.
In Canada, coal production dropped to a three-decade low in 2016, at 60.4 million tonnes, a 12 per cent decline since 2013. Approximately half of Canada’s production is thermal coal used in power generation, which is expected to see a continued steady decline as the country moves to virtually phase out coal-fired power plants by 2030. Solar and wind electricity consumption increased by 19 per cent and 11 per cent respectively, with hydro growing modestly at 3 per cent.
Katie Sullivan, Managing Director, IETA, comments: “As the report confirms, a lot of hard work and transformative change lies ahead to stay below the 2-degree Celsius warming threshold – especially in Canada, with its ambitious climate goals.”
Overall, Canada remains well short of the 4.5 per cent average decarbonization rate required to achieve its 2015 Paris Agreement pledge to reduce emissions by 30 per cent below 2005 emission levels by 2030.