Current Growth Insufficient To Meet Global Net Zero Targets: KPMG Report

Current Growth Insufficient To Meet Global Net Zero Targets: KPMG Report

A latest report from KPMG said that current developments across the world were not enough to meet the net zero targets globally.  It said that governments and industry must deliver transformative change on net zero but are currently hamstrung by significant barriers, including global public debt, domestic tensions, increased opposition to decarbonization plans, and the need to guarantee energy supply, according to KPMG’s 2023 Net Zero Readiness Report.

Despite incremental momentum and specific successes such as the scaling up of low-carbon energy production from some of the world’s largest emitters, including the US, China, Brazil, Canada and the EU, progress is constrained by a backlash over the cost of decarbonization and conflict over its domestic impact.

Through conversations with national climate change experts in 24 markets and across 6 economic sectors, the report highlights those that are leading the charge in their progress towards net zero, and those where it is taking place more slowly. In certain markets and sectors, the impact of low carbon projects on local wildlife, biodiversity and communities is triggering a rise in ‘green on green’ conflicts, causing clashes between renewable projects and the local environment. On an individual country level, meaningful progress is hindered by opposition to measures that are perceived to have a considerable cost to people’s livelihoods, the report said.

The KPMG report said that despite worldwide variation in adoption levels, the significant growth in the sales share of EVs is a global success story in how rapidly some sectors can decarbonize. However, within the international aviation and shipping industries, the pace of change is considerably slower and the goal of reaching net zero by 2050 hinges on significant increases in the production of Sustainable Aviation Fuels (SAFs), as well as government incentives.

“While some countries are replacing coal with low carbon sources, fast-growing economies like India are adding both fossil fuel and low carbon generation to try to meet rapidly increasing demand,” the report said.

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Anish De, Global Head, Energy, Natural Resources and Chemicals, KPMG International said, “India is developing more generation from solar, wind, hydrogen as well as storage capacity. However, given the rapidly growing energy needs driven by economic growth in excess of 6 percent per annum India’s dependence on fossil fuels will persist, though the relative share will come down over a period of time.”

Namrata Rana, National Head, ESG, KPMG in India said, “The NetZero transition is more than Decarbonisation – it’s the biggest transformation of industry and business since the Industrial Revolution. It will impact jobs, business models and the way we work and live. Technology transformation can help enable this change and accelerate circular systems”.

Commenting on the Indian scenario, Apurba Mitra, Partner, ESG, KPMG in India said, “In India, the solar boom since 2009 has seen a new focus on cost with the government using reverse auctions that favor very large solar and wind projects. However, given the infirm nature of wind and solar, coal will still be needed for the near future”.