The UK leads the G20 in having the most rapid decarbonisation rate (3.7%) since 2000, says the latest PwC Low Carbon Economy Index (LCEI).
However, the rate of progress has slowed and the gap to meet climate targets is widening.
PwC said to achieve the UK’s commitment to achieving net zero emissions by 2050, an annual decarbonisation rate of 9.7% will be required.
The majority of the UK’s recent emissions reductions have come from the phasing-out of coal. But, this trend of decarbonisation is neither substantial or sufficient, according to PwC’s stats.
Achieving net zero will require action and a transition of every sector of the UK economy. The electrification of sectors such as transport and heating needs to be met by the scaling up of renewables and increased investment in clean energy sources, advanced storage solutions, and smart grids. Negative emissions technologies such as carbon capture and storage will need to be scaled, and improved agriculture and land use practices will be critical for removing carbon from the atmosphere and restoring carbon sinks.
Currently the UK is making limited progress outside the power and industry sectors, according to the Index. Some businesses are increasingly adopting ambitious climate commitments and demonstrating climate leadership. Over 1,000 leading companies have signed up to initiatives such as Science Based Targets and RE100, while nearly 100 companies have committed to more ambitious decarbonisation to reach net zero by 2050, showing their willingness to both align with, and drive, the low carbon transition.
PwC’s Global Climate Change Leader, Dr Celine Herweijer, said: “Achieving net zero will require companies across all sectors to transform, drive innovation and grow while managing transition risks. This needs to happen at scale and speed over the coming two to three business cycles. It’s one thing for leading companies to set ambitious targets, but the ability to meet these will need strong government action to stimulate new market solutions.”
Herweijer stressed regulatory intervention will be key to helping many technologies and business models to reach a critical lift-off point. We are talking R&D, clean infrastructure investment, carbon pricing, tax incentives, and redirecting subsidies.