Carbon Emissions: the Levy Under the Paris Agreements

According to the latest IPCC (Intergovernmental Panel on Climate Change) Report, published last August, unless greenhouse gas (GHG) emissions are reduced immediately and on a large scale, limiting warming to around 1.5°C or even 2°C will be an unattainable goal.

As PwC‘s Net Zero Economy Index 2020 releases, the current decarbonization rate is well below the expected within what is needed to achieve the Paris Agreement target: while the annual decarbonization rates needed to limit warming to 2°C and 1.5°C are estimated at 7.7% and 11.7% respectively, only 2.4% was achieved during 2019.

Belén Zermatten, ESG & Sustainability Manager at PwC Argentina, commented: “The decarbonization goals are supported by leading companies around the world, which have made public commitments to achieve greenhouse gas reductions, and have undertaken and in many cases strengthened the development of clean technologies.

However, beyond these important global milestones, the gap between ambition and action remains substantial. Building a low-emissions economic model will require further deepening these efforts and it will be critical for business leaders to lead the transformation by rethinking their corporate strategy with clear targets for emissions reduction, integrating it across the organization, and implementing it in all operations (including the value chain as a key player in the process).”

According to the IPCC, with each additional “quota” of global warming, the impacts will be greater, and extreme events of greater intensity and frequency are expected.

Regarding the effects of the COVID-19 pandemic, both the PwC Report and the IPCC agree that decarbonization since the appearance of the virus occurred largely during the first half of 2020 due to the decrease in economic activity when mandatory insulation deepened globally; but a rapid rebound in emissions has been observed as economies and societies began to resume their activities.

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Situation in Argentina

In 2020, the country has submitted its second NDC (Nationally Determined Contribution), which includes three main components:

Commitment to limit GHG (greenhouse gas) emissions by 26% with respect to the first NDC (2016).

Present a long-term low-emission development strategy, with the goal of achieving carbon-neutral development by 2050.

Reaffirm the commitment to work on climate change mitigation and adaptation measures, starting with the development of a National Adaptation and Mitigation Plan.

Diego López, partner of PwC Argentina, stated, “the public and private sectors and civil society as a whole, we must work hard and in a coordinated manner to achieve the transformations required to meet the objectives of the Paris Agreement. In this sense, at PwC we work day by day with clients, suppliers, and collaborators to measure and manage the impact of our activities on the environment, committed to reducing our greenhouse gas emissions by 50% by 2030”.

68% of Argentine businesspeople surveyed in PwC’s 24th Annual Global CEO Survey expressed concern about the threats associated with climate change and environmental damage, and 45% plan to increase their budget on ESG (environmental, social, and corporate governance) issues in the next 3 years.

Rocío Martínez, from PwC Argentina’s Sustainability team, concluded, “achieving these objectives will require the adoption of sustainable production and consumption practices. According to what is established in this second NDC, it will be a priority to focus on reducing vulnerability, increasing adaptive capacity, and strengthening the resilience of the different social, economic and environmental sectors through awareness-raising and capacity-building measures that will allow the country and its population to respond to the urgent challenge of protecting the planet.

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(Featured image by Etienne Girardet via Unsplash)

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