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UK’s decarbonisation progress neither 'sustainable' nor 'sufficient' for net zero, claims PwC

The UK will need to reduce carbon intensity by 9.7% a year.

The UK will need to reduce carbon intensity by 9.7% a year.

The UK will need to reduce carbon intensity by 9.7% a year if it is to meet its net zero by 2050 goal, according to new research by PwC.

The Low Carbon Economy Index (LCEI) shows that the UK has achieved the highest rate of decarbonisation of any G20 country this century, with an average rate of 3.7% a year. However, this is still much too slow for the country to meet its net zero obligation.

The majority of this decarbonisation has come from the phase-out of coal, which helped the UK decarbonise at a rate of 6.9% between 2012 and 2016, and even reach its necessary reduction level in 2014, when the country decarbonised by 9.7%.

There currently remains just six coal fired power stations in the UK, with another two to close in March 2020, and the country is on target to be coal-free by 2025.

However, PwC has warned that this trend is neither “sustainable” or “ sufficient” to meet decarbonisation goals.

Kiran Sura, assistant director in the sustainability & climate change team at PwC UK said that if the UK was to be a climate leader, particularly in the run up to COP25, it need to “act fast”.

“It’s clear that current efforts are not sufficient to deliver the net zero ambition. A more coherent and more ambitious policy response is required across all sectors of the economy.

“With the UK hosting COP26 in Glasgow in 2020, the country’s actions will be under close scrutiny and there will be nowhere to hide if we fall short of doing our part.”

In order to continue to decarbonise, the UK needs to focus on the transport and heating sector. These should be electrified and the quantity of renewables increased to meet demand, alongside the implementation of carbon negative technologies such as carbon capture and storage says the LCEI report.

While many private companies have made progress in reducing their emissions, “strong government action to stimulate new market solutions” is also needed according to Dr Celine Herweijer, partner at PwC UK and global climate change leader at PwC.

“Regulatory intervention will be key to helping many technologies and business models reach critical lift-off point. From R&D and clean infrastructure investment, to carbon pricing, tax incentives, and redirecting of subsidies; policy ambition in the UK needs to go hand in hand with business ambition.”

In order to quantify the necessary rate of decarbonisation for the UK, PwC used a combination of Core and Further Ambition scenarios outlined in the Net Zero Report: The UK's contribution to stopping global warming report produced by the Committee on Climate Change (CCC) this year.

This is not the first time the need for strong governmental leadership has been highlighted in calls to increase efforts to decarbonise. The CCC said in a letter to the government in August that a strong carbon price is "essential" but can’t facilitate decarbonisation alone.

Similarly, energy giants Orsted, SSE and Drax, and Sandbag, wrote to the Chancellor of the Exchequer Sajid Javid in October, urging him to “maintain the UK’s robust approach on carbon pricing” in order to meet Net Zero.

Elsewhere, groups such as Aurora Energy Research have highlighted the need for increased renewables generation. The group said that more than 100GW of additional wind and solar capacity, alongside 30GW of short duration energy storage, is needed in the UK if the country is to meet its net zero obligations.

Germany led the LCEI in 2018, with a decarbonisation rate of 6.5%. This is due to a reduction in coal, oil and gas, and an increase is solar generation. However, mild weather throughout the year also reduced energy demand, easing emissions. The country is still expected to miss its 2020 target of 40% less emission over 1990 rates.

Following this, Mexico, France, Italy and Saudi Arabia had the highest rates of decarbonisation alongside economic growth. This is due to a switch from coal to gas, and an increased carbon price, particularly in Europe where it has risen from less than €8 at the beginning of 2018 to around €25 today according to the report.

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