South Africa’s goal to close the gap between business-as-usual carbon intensity from 4.7% a year to 1.5% a year is ambitious and is starting from a very high base – the highest of the Group of 20 countries, a PwC report has shown.

PwC’s Low Carbon Economy Index outlined that the country’s Intended Nationally Desired Contribution (INDC) proposed significant investments that required international support up to 2030, including more than $40-billion a year needed for investment in next-generation vehicles – split at three-quarters hybrid electric vehicles and one-quarter electric vehicles – and about $500-million a year for public transport infrastructure.

Further, the country would need to invest almost $8-billion a year in renewable and nuclear energy, including beyond 2030, while the estimated cost to expand government’s Renewable Energy Independent Power Producer Procurement Programme would need $3-billion a year.

The analysis further highlighted that carbon intensity rose in five countries, including South Africa, India, Brazil, Saudi Arabia and Turkey.

For South Africa, carbon intensity followed an erratic pattern, increasing by 2.3% in 2003 and then falling by 5.8% in 2005. This pattern was influenced more by emissions than gross domestic product (GDP).

PwC South Africa sustainability and climate change director Jayne Mammatt noted that the range of 398-million metric tons of carbon dioxide equivalent (MtCO²e) and 614 MtCO²e by 2025 to 2030 was a wide one, implying that the decarbonisation rate could be anything between 3.3% and 5.9% a year. “This could bring some uncertainty to businesses in South Africa expecting carbon regulations, as the room for manoeuvre is significant.

“Notwithstanding the uncertainty, the more ambitious target of 398 MtCO² would mean a decarbonisation rate close to the global rate required of 6.3%, making South Africa’s INDC an ambitious one; but, even at 3.3% it will be decarbonising marginally faster than the average of the INDC targets we have examined.”

GLOBAL CARBON INTENSITY
Meanwhile, the report showed that global carbon intensity fell by 2.7% in 2014, the steepest decline in seven years. Global growth of 3.2% in 2014 was achieved with only 0.5% growth in energy-related emissions.

“Despite progress by some countries, globally, the target level of reductions in greenhouse-gas emissions per unit of GDP has been missed for the seventh successive year. Rapid and sustained decarbonisation of around 6.3% is needed every year globally in order to limit global average temperature rise to 2 °C,” the report stated.

Mammatt further added that, despite being a step change, the United Nation's Conference of the Parties, or COP21, targets fell short of the 2 °C goal, which meant that the agreement would need a process to review national progress and to raise ambition in future.

“Companies need policies and regulations that are business-friendly and based on market mechanisms.  Such policies will help them to scale-up clean energy and energy efficiency, encourage conservation of natural resources, and provide the right incentives to drive investment in low carbon technologies – to build resilience into communities most affected by climate impacts,” she said.