Pathways to a low-carbon economy
Whilst leaders in many nations discuss ambitious targets for reducing emissions of greenhouse gases (GHGs), there is also an intense debate underway regarding the technical and economic feasibility of different target levels, what emission reduction opportunities should be pursued, and the costs of different options for meeting the targets.
To provide a quantitative basis for such discussions, McKinsey, supported by ten leading global companies and organisations – The Carbon Trust, ClimateWorks, Enel, Entergy, Holcim, Honeywell, Shell, Vattenfall, Volvo, WWF – has assessed more than 200 GHG abatement opportunities across 10 major sectors and 21 world regions between now and 2030. The results comprise an in-depth evaluation of the potential, costs and investment required for each of those measures.
Our analysis finds that:
- The potential exists to reduce GHG emissions by just enough to stay on track until 2030 to contain global warming below 2 degrees Celsius.
- Opportunities can be grouped into three categories of technical measures: energy efficiency, low–carbon energy supply, and terrestrial carbon.
- Capturing all the potential will be a major challenge: it will require change on a massive scale, strong global cross-sectoral action and commitment, and a strong policy framework.
- While the costs and investments seem manageable at a global level, they are likely to be challenging for individual sectors.
- Delays in action of even 10 years would mean missing the 2 degrees Celsius target.
This report builds on our first global study published in January 2007 and subsequent national studies. It includes an updated assessment of the development of low–carbon technologies, of macro–economic trends and a more detailed understanding of abatement potential in different regions and industries. Furthermore it assesses investment and financing requirements and incorporates implementation scenarios for a more dynamic understanding of how abatement reductions could unfold.
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