UK leads record drop in carbon emissions as City told to gear up for climate finance opportunities
The UK leads the steepest decline in carbon emissions since 2000 – and analysts suggest London’s financial markets should be gearing up for climate finance opportunities.
The country’s greenhouse gas emissions dropped by 10.9 per cent last year, according to PwC’s annual report Low Carbon Economy Index 2015. This puts the UK ahead of all other G20 nations, managing to combine falling emissions with strong GDP growth.
“While the annual record for the UK is headline grabbing, it’s the UK’s consistent performance since 2000, reducing carbon intensity by 3.3% on average a year that is notable,” said Jonathan Grant, director of sustainability and climate change at PwC.
Globally, carbon intensity has dropped by 2.7 per cent in 2014, as the link between greenhouse gas emissions and economic growth finally appears to be weakening. This is the steepest decline in seven years, and is calculated based on global growth of 3.2 per cent alongside a 0.5 growth in emissions.
As the climate summit in Paris draws nearer, the City should be taking strides to support the transition to a low carbon economy, according to Jon Williams, partner and specialist in financial services and climate change at PwC, who said the City has an opportunity not just to mobilise investors, but to create "innovative financial products" to finance climate projects:
A low carbon revolution will be capital intensive, so the City could play a leading global role here. There’s a huge opportunity for London in providing not just access to capital markets, but risk management and specialist new instruments and approaches to how that money will be raised. […]
Given increasingly stringent capital requirements that financial institutions face, capital markets finance, and not just bank debt , will be required to scale up if the missing ‘clean trillion’ is to be funded.