EDINBURGH/LONDON, 04 November 2016 – Wood Mackenzie's latest analysis and preliminary outlook on energy demand shows the emissions goal implied by the current version of the Paris Agreement is likely to be missed.
The Paris Agreement comes into force today, imposing greenhouse gas emission limits on countries across the globe.
According to Wood Mackenzie's study, developed countries have committed to emissions cuts they will be unable to make without additional efforts to decarbonise their economies. Such efforts include increased energy efficiency, greater focus on renewable energy and the trend towards electric vehicles.
Although developed economies have progressed in addressing greenhouse gases, a lot more needs to be done to boost renewable energy and increase efforts to lower emissions.
Paul McConnell, research director for global trends at Wood Mackenzie, says: "Emerging markets should meet their Paris Agreement targets with relative ease, given these are in general not much of a constraint on development. Some emerging economies may choose to go further on emission constraints, particularly if there is any political ground to be gained by 'climate leadership'."
But NGOs and other external actors are certain to demand all parties do more to ensure the Paris Agreement meets its self-proclaimed goal of limiting global warming to 2 °C above pre-industrial levels.
"Whether more stringent targets emerge now or some years in the future, recent trends suggest continued pressure on emissions growth is a reliable bet," says McConnell.
"Hydrocarbon fuel consumption is in the firing line, and energy sector impacts are being felt already, despite Paris Agreement targets not kicking in until the end of the decade," he adds.
Wood Mackenzie's study shows a formalised global policy framework favouring low-carbon energy challenges the traditional business models in oil and gas production, coal extraction and power utilities in the longer run.
"Judging the pace of transition from old to new is among the big difficulties facing companies as they survey this emerging energy landscape," says McConnell. "Companies will need to change, beginning with understanding their own carbon footprint, then developing strategies to adapt."
World CO2 emissions vs. Paris Agreement vs. IEA 450 scenario*
*WEO 2015. NDC emissions profile post 2030 WM assumption
Paul sheds some light on the study and our recent analysis in these short videos:
About Wood Mackenzie:
Wood Mackenzie, a Verisk Analytics business, is a trusted source of commercial intelligence for the world's natural resources sector. We empower clients to make better strategic decisions, providing objective analysis and advice on assets, companies and markets. For more information, visit: www.woodmac.com or follow us on Twitter @WoodMackenzie
WOOD MACKENZIE is a trade mark of Wood Mackenzie Limited and is the subject of trade mark registrations and/or applications in the European Community, the USA and other countries around the world.
For further information, please contact:
Europe, Middle East, Africa, Russia and Caspian Region
- Anthea Pitt
- +44 203 060 0624
- Laura Hindley
- +44 203 060 8742
- Abe Silva
- +1 713 470 1871
Asia Pacific Region
- Ann Lee
- +65 65180823
To read more view our latest article: Paris Agreement ratified: is the bar set too high?
To read a summary and purchase the full report visit: Paris Agreement comes into force: Global carbon constraints from 2020