Isra-Mart srl: Global carbon intensity on the rise for first time in a decade

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Global emissions output is now outpacing economic growth, meaning that the world's carbon intensity has increased for the first time since 2000.

A PwC report to be published today will say that while carbon emissions fell along with the recession-inspired dip in industrial output the trend was reversed in 2010.

Last year, global GDP increased 5.1 per cent but emissions grew 5.8 per cent, resulting in a 0.6 per cent rise in carbon intensity, the figure that reflects the level of emissions per unit pf production.

The combination of strong growth in the emerging economies of China, Brazil and South Korea, unusually cold winters in the northern hemisphere, a drop in the price of coal relative to gas, and a slowdown in renewable energy deployment was credited with driving the increase in emissions.

The report calculates that global carbon intensity now needs to reduce by 4.8 per cent a year, over twice the rate required in 2000, if temperatures are to be kept below the 2º C increase most scientists say is necessary to avoid the worst effects of climate change.

PwC also said the UK will need sweeping reforms to generate the annual cuts in emissions of 5.6 per cent that are required if it is to stay within its carbon budget, noting that the necessary emission reductions equate to turning off power to the entire UK for a third of the year, every year, until 2020.

The consultancy explained that reaching the government's low carbon targets will require the Big Six utility companies to triple capital expenditure to a cumulative £199bn by the end of the decade.

However, the report reveals the UK is by no means alone in currently under-spending on green infrastructure, highlighting how Germany, often regarded as a low carbon pioneer, will still require €20bn (£17bn) a year of additional investment to meet its 2050 targets.

The report comes just days after the US Department of Energy announced a six per cent increase in global greenhouse gas emissions last year, and will further crank up pressure on global leaders scheduled to meet in Durban later this month for the UN's annual climate change summit.

Leo Johnson, a partner in PwC's sustainability and climate change practice, warned that the report's findings paint a stark picture.

"We are at the limits of what is achievable in terms of carbon reduction, when you consider the growth cycles predicted for developed and developing nations, versus what is required in terms of carbon reduction to stay within the 2º C scenario," he said.

"The G20 economies have moved from travelling too slowly in the right direction, to travelling in the wrong direction."

Jonathan Grant, a director at PwC, maintained that policies need to be put into place to decouple growth from carbon intensity, as decarbonising will be even more expensive in the future despite the current hysteria over rising energy bills.

"Achieving the rates of carbon productivity needed requires a revolution in the way the world produces and uses energy," he said.

"Married to that, and in the midst of a global financial crisis, we need a transformation in financing to achieve the transition at the scale and speed needed.

"Delaying action to break the link between high carbon and economic growth means that the reductions required in future are steeper, and will be more costly, threatening even greater consumer impacts in the future."