G20 businesses need "change of gear" on climate change

The G20 economies need to slash carbon emissions by four times the level they achieved last year to keep within environmental constraints, according to a major new report by PriceWaterhouseCoopers (PwC).

The PwC Low Carbon Economy report said that the world's largest economies have already used half of their projected carbon budget for the entire 21st century in the first eight years.

The authors of the report calculated the carbon emission constraints that the planet would need to remain within to keep average global temperature rises to within 2 degrees celsius of pre industrial levels for the first half of the century.

They found that the G20 is already 10 per cent off the required trajectory of emission cuts, adding that at current rates of reduction the G20 will have used up its entire budget for the first half of the decade by 2034, 16 years ahead of schedule.

The report said that the breaking of the budget to date means that the G20 will now have to cut its carbon emissions 35 per cent by the year 2020 - four times the amount that it managed in between 2000 and 2009. To date, only Norway has set such an ambitious short term emission target aiming to cut emissions 40 per cent by 2020. Meanwhile, most other developed countries are aiming to cut emissions by between 10 and 25 per cent by 2020.

The report also argued that global emissions from energy use must have peaked by 2015 and begin declining after that point to stand a reasonable chance of avoiding dangerous levels of temperature rises.

The scale of the required cuts have huge implications for businesses, according to Richard Gledhill, global leader of climate change at PwC. " Business needs to get ready for a change of gear on climate," he warned.

Saudi Arabia was by far the worst performer in the G20 between 2000 and 2008, missing the necessary emission reductions to stay within its carbon budget by 28.9 per cent. China, Mexico, Italy and Canada were also near the bottom of the ladder.

Russia was the only country to have exceeded its emission reduction targets, beating the necessary reduction target by 5.2 per cent, largely as a result of energy efficiencies, according to the authors. Although, they added that the country was helped by a relatively low starting point as a result of its economic collapse in the 1990s.

Gledhill said the report emphasised the case for a strong deal on climate change at the international climate change conference in Copenhagen this month, adding that he was confident the "pieces are coming together" for a strong political treaty to be enforced in 2010.

The last few weeks have seen a number of encouraging signals ahead of the Copenhagen summit with China already offering to reduce its carbon intensity - the amount of carbon emitted per economic unit of production - by 40-45 per cent, while the US has announced a preliminary target to reduce emissions 17 per cent on 2005 levels by 2020. Moreover, around 80 world leaders have now confirmed they will attend the crucial talks, further bolstering optimism that some form of deal will be reached.