Jonathan Grant of PwC examines the uncoupling of growth and emissions which is widely recognised as essential to avoid the worst impacts of climate change
PricewaterhouseCoopers seventh Low Carbon Economy Index, examines the uncoupling of growth and emissions which is widely recognised as essential to avoid the worst impacts of climate change.
However, there is still a big gap between current progress and what's needed to meet the 2°C carbon budget.
Jonathan Grant shares the highlights from a year marked by progress, but by no means the end of the policy story.
"Governments are meeting in Paris in December to agree a deal to limit warming to two degrees. It could be a historic deal, replacing the Kyoto Protocol agreed in 1997 and making up for the failure in Copenhagen in 2009. And there's no doubt the outcome will have a significant impact on business.
"Our Low Carbon Economy Index tracks the G20 countries carbon intensity, or emissions per million dollars of GDP.
"On average, carbon intensity has fallen by 1.3 per cent each year since 2000 and on that trajectory the two degrees carbon budget will run out in 2035.
"But for the first time, in 2014 there was signs of rapid uncoupling of emissions from economic growth.
"Overall carbon intensity fell by 2.7 per cent, with the largest EU countries making sharp reductions of over seven per cent.
"But at the global level there is still a big gap between current progress and the 6.3 per cent reductions needed every year to stick to the 2 degrees carbon budget.
"In the lead up to Paris, countries have proposed a range of emissions targets known as INDCs. We have looked at the ambition of these targets and found that on average they require carbon intensity reductions of 3 per cent, not enough to achieve 2 degrees, but clearly a step change from business as usual.
"This raises the prospect of more regulation of carbon intensive sectors like energy, steel and cement and more incentives for renewables with total low carbon investment in China and the EU expected to exceed $500 billion a year between now and 2030.
"See our Low Carbon Economy Index for all the detail, along with ten country briefings including the US, Australia, India and others."