COP21 Targets: immediateaction is required to succeed An A.T. Kearney market-led approach

To meet the ambitious COP21 targets requires immediateaction, comprehensive measures, and global decouplingof emissions from economic growth

COP21 Targets

Required greenhouse gas (GHG) emission reductions�(GtCO2)

Note: GtCO2 is gigatonnes of carbon dioxide.Sources: United Nations Environment Programme (UNEP); A.T. Kearney analysis

52.7

2010

Historical development Future development201420001990

50.9

38.2 40.6

87

68

22

42

2030 2050

Business-as-usual

2° C-objective

Since 1990 global GHG emissions have increasedby more than 47 percent, and show little sign of anyimmediate improvement

COP21 Targets

Global development of GHG emission (million ton CO2 equivalents)

Notes: Includes international aviations. Excludes emissions and removals from the LULUCF sector (carbon sinks) and nitrogen trifluoride (NF3) emissions.Sources: World Resource Institute, European Environment Agency, A.T. Kearney

44.81642.96838.782

33.88731.55930.424

1990 201220101995 20052000

+47.3%GDP: +126%

Decoupling of GHG emissions from GDP growthis progressing with the U.S., EU, and Japan reachinglowest levels of GHG emission intensities

COP21 Targets

Development of GHG emission intensity* (tons CO2 equivalents/USD 2005)

Japan China

2.43

Russia

3.54

2.16

6.32

0.31

World IndiaEU28

0.81 0.940.51

UnitedStates

0.29 0.44 0.29

0.98

2.37

Brazil SouthAfrica

1.781.46

0.72 0.89

3.29

*Note: GHG emissions divided by GDP in real termsSources: World Resource Institute; A.T. Kearney

–17.6% –42.9% –38.9%–7.6%

–28.1%

–61.6%

–38.9%

–5.8%–17.8%

The historical events that led to the first wave of reductionsin emissions cannot be replicated, so new solutions mustbe found

COP21 Targets

Main reasons for historical emission reductions in EU

Source: A.T. Kearney analysis

Structural change1.

Innovation andchange of power mix2.

De-industrialization3.

The structural changes in Eastern European countriesafter the breakdown of the Soviet Union after 1990erratically a�ected emissions across all sectors

Strong support for renewables in EU led to an improvedCO2-intensity in power generation at high cost

The relocation of energy-intensive industries led to carbonleakage to developing countries such as China and India

We need to find more e�icient andsustainable ways in order to achievethe COP21 objectives on a global scale.Only a market-led energy transitionwill achieve climate targets in a generallyaccepted and cost-e�icient way.

COP21 Targets

Source: A.T. Kearney analysis

Policy recommendations for a market-led energy transition

COP21 Targets

Source: A.T. Kearney analysis

Select CO2-emission reduction as primary objective and expansionof renewables and energy e�iciency as alternative/complementaryways to achieve it

Develop a strong emissions trading system (ETS) covering all majoremitting sectors with an automatic certificate reduction mechanism

Introduce CO2 taxes, where an inclusion into ETS is not possible

Integrate other regions into ETS (if not possible adopt CO2 dutieson products from energy-intensive industries)

Use income from ETS and CO2 taxes for a central R&D support forbusinesses active in the field of energy (technology-neutrality)

Ensure market integration of new technologies from the beginning(e.g., integrate renewables into the energy-only-market)

Centralelementis globalpricing

of GHG-emission

For more information aboutCOP21 targets and A.T. Kearney’smarket-led approach to energytransition, please contactFlorian Haslauer.www.atkearney.com/utilities/florian-haslauer

COP21 Targets