Lit Ping Low, climate policy and economics specialist with PwC Sustainability & Climate Change team is an author of PwC’s 5th Annual Low Carbon Economy Index.

990GtCO2 (or 270GtC) is the carbon budget for 2012-2100 set out by UN scientists – the Intergovernmental Panel on Climate Change or IPCC. This is what will provide the world with a reasonable chance of limiting temperature increase to 2 degrees Celsius, the threshold of global dangerous irreversible climate impacts.

PwC’s Low Carbon Economy Index (LCEI) published here, considers the carbon intensity of the global economy against this carbon budget. Put simply, the results are alarming.

The global economy averaged a feeble 0.7% reduction in its carbon intensity between 2007 and 2012. At this projected rate of emissions and economic growth, we will have blown the global carbon budget by 2034, using up an 89-year budget in just 21.

The problem we face is that economic growth is currently too carbon intensive.

There is little question that economic growth is good for society in general. But the assumption that we can continue to grow will be seriously compromised, if food and water resources are threatened, if coastal population face inundation from sea level rise, or if the biodiversity and ecosystems that support us fail to function.

To keep within this budget, we now need to reduce carbon intensity by 6.0% a year, every year to 2100. We will need a virtually zero-carbon energy system by the end of the century.

Talking about zero-carbon at the end of the century may seem a faraway ideology, but to achieve that we need to halve our carbon intensity in the next ten years. Ten years is well within current decision making frameworks of politicians, businesses and civil society: the average US Senator stay in the Senate for 10.2 years (source: Congressional Research Service), the average CEO is in the top job for 8.1 years (source: Forbes), and the average time of an English owner-occupier in their home is 11 years (source: Office of National Statistics).

Decisions made today will determine not just whether we can grow out of a carbon addiction, but also whether we can preserve the assumption of long term, sustained economic growth. The fate of the global climate system, and some of the fundamentals of economic growth, could be sealed in 21 years. So it is perhaps ironic that 21 years ago in 1992, the UN Framework Convention of Climate Change (UNFCCC) was set up to combat climate change, and whether it is a success or failure would be decided 21 years later from today.

Read PwC’s Low Carbon Economy Index (LCEI)

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