Last year marked a disheartening milestone in the global fight against climate change, as reported by PwC's newly released Net Zero Economy Index 2024 report.
With a paltry decarbonisation rate of just 1.02%, the world has veered off track from the average 1.43% decrease between 2000 and 2023. More alarmingly, this rate stands significantly below the 20% reduction necessary each year to limit global warming to 1.5°C by the end of the century.
Reflecting on this trend, Lullu Krugel, PwC Africa Sustainability Platform Leader, pointed to a surge in energy consumption as a central factor.
Krugel noted a notable rise in demand attributed to the energy-intensive artificial intelligence industry, as well as a pressing need for heating and cooling due to extreme temperature shifts.
In South Africa, the scenario appears equally troubling, with the country’s carbon intensity escalating by nearly 3% and its fuel factor rising by almost 4% from 2022 to 2023.
“While South Africa witnessed record installations of solar PV systems in 2023 and faced pervasive load shedding, the reality is that our journey toward emission reduction is still in its infancy,” Krugel said.
“The fuel factor encompasses various energy sources beyond electricity generation, including the diesel used to power generators during load shedding, as well as traditional fuels like wood, coal, and paraffin for home heating and cooking.”
Matt Muller, PwC South Africa Climate and Nature Specialist, acknowledged a glimmer of hope within this narrative.
“Despite recent increases, it is important to highlight that South Africa remains below pre-COVID levels in terms of carbon intensity and fuel factor,” he said.
“This small silver lining should not lead to complacency. South Africa is still the largest polluter on the African continent and faces significant risks from climate change.”
The repercussions of climate change loom large, with rising living costs, food and water insecurity, and threats to livelihoods becoming increasingly apparent. The devastating floods in KwaZulu-Natal in 2022 serve as a stark reminder of the urgent need for resilience against a shifting climate.
The Index further underscores the necessity for South Africa to bolster its current decarbonisation strategies.
The authors advocate for a collective effort to implement nature-smart solutions that are economically inclusive, safeguarding livelihoods while driving sound business decisions aligned with decarbonisation goals. They assert that while climate risks serve as motivation for action, the financial opportunities presented should also spur momentum.
Dr Dayalan Govender, PwC Africa People and Organisation Leader, pointed to an urgent requirement for new technical solutions that will, in turn, require an equally innovative skillset.
“In accordance with the World Economic Forum Future of Jobs Report, the demand for expertise in climate resilience has surged by 40% since 2015, yet the supply of skills is lagging,” he explained.
South Africa grapples with an unemployment rate soaring at 33.5%, facing compounded threats from climate-related impacts.
Krugel emphasised the need for a dual-faceted solution to build climate resilience while simultaneously unlocking job creation.
“By developing the skills necessary for future climate resilience, we can cultivate a new economy of opportunities that additionally prepares us for climate shocks,” she said.
According to PwC South Africa, collective adaptation must hasten to meet these changing conditions. Reflecting on the determined achievements made during the COVID-19 pandemic, the organisation argued that similar urgency is essential in combating the current climate crisis.
“There is no alternative; delaying action is not an option,” they condemned.
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