PwC's Net Zero Economy Index (NZEI), an indicator of the progress G20 members have made in reducing energy-related CO2 emissions and decarbonising their economies, shows that at just 0.5%, the global rate of decarbonisation in 2021 was at its lowest level in over a decade. With further economic headwinds and energy price challenges ahead, countries – and businesses – have important decisions to make if they are to place decarbonisation efforts at the heart of their economic futures.
The lifting of pandemic restrictions in 2021 has given way
to a much needed resurgence in economic activity, but
with this, we have seen a rebound in emissions.
The 2021 data has been skewed by the ramping up of
economic activity, and appears to show the recovery from
COVID-19 has not – at least in the short term – been a
green one. This continues to take us further away from
what we need to do in order to limit warming to 1.5°C
above pre-industrial levels.
In 2021 we moved further away from limiting warming to 1.5°C above pre-industrial levels. At just 0.5%, the global rate of decarbonisation in 2021 – the reduction in carbon intensity, or energy-related CO2 emissions per GDP – was at its lowest level in over ten years. While skewed by the rebound in economic activity from the pandemic, the recovery has not – at least in the short term – been green.
Looking ahead, the current geopolitical and economic context presents a real risk to future progress. The IPCC’s 2030
deadline to reduce emissions by 43% is fast approaching, and our analysis shows that countries now need to work
even harder to meet this figure. When looking at global carbon intensity, which accounts for the projected rise in GDP
until 2030, we need to see a 77% reduction over this period.
Each country and sector will have its own route to
decarbonisation, focusing on changes to its own unique
energy mix and efficiency gains, as well as other actions
outside of our core energy analysis, for example, naturebased solutions and use of technology.
Businesses, governments and investors will need to focus
on the quick wins with the highest impacts to put us on
track to 2030, while at the same time investing in longer
term interventions that will deliver on agreed goals for
2050. In parallel, they will need to adapt to the impacts of
climate change that are already being experienced, and
those that are increasingly inevitable in the shorter term. Businesses are continuing to drive forward the climate
agenda, particularly at a sector level. Motivated by shifts
in the regulatory and consumer environment, and an
increased recognition by investors of the importance of a
low carbon transition.
Find out more.