Warning of ‘dirty’ recovery as carbon emissions outpace economic growth

Analysis by the PwC Low Carbon Economy Index shows that during the recession, many countries including the UK saw emissions fall faster than gross domestic product – a broad measure of the total economy – because their manufacturing output fell.

But in 2010, global GDP growth was just above 5 per cent, while emissions rose by nearly 6 per cent.

In the UK last year, greenhouse gas emissions increased by 3.5 per cent, more than double the 1.3 per cent growth in the economy, the PwC study said.

The report suggested growth in emerging economies including China, Brazil and Korea, the fall in the price of coal compared to cleaner gas, a drop in renewable energy deployment and colder winters in the northern hemisphere at the beginning and end of 2010 all contributed to the carbon emissions rise.

It means that for the first year since 2000, no improvement has been made in decoupling growth and emissions by reducing the “carbon intensity” – the greenhouse gases emitted for each unit of economic output – of G20 economies.

PwC said the findings called into question whether the world could reduce emissions enough to stay within the goal of limiting global warming to just 2C above pre-industrial levels.

It also revealed the scale of funding needed to decarbonise the global economy, and warned that it must now be done at rates which have only been achieved in “exceptional circumstances” in the past.

Leo Johnson, partner, sustainability and climate change for PwC, said: “The G20 economies have moved from travelling too slowly in the right direction, to travelling in the wrong direction.

“It is only in exceptional circumstances that countries have come close to removing 4.8 per cent emissions from their economies over the course of a decade.”

Jonathan Grant, director of PwC sustainability and climate change, said: “The economic recovery, where it has occurred, has been a dirty one.” He said there was a need for a revolution in the way the world produced and used energy.