Carbon Budget Explained: How Much Budget is Left?

As global warming getting worse, the Intergovernmental Panel on Climate Change (IPCC) set a goal called “carbon budget“. It limits the temperature increase after the Industrial Revolution to 1.5°C. 

This article aims to explain the meaning and contents of the carbon budget, as well as the necessary reductions in CO2 emissions for advanced countries.

What dose the Carbon Budget mean?

The carbon budget represents the maximum limit of greenhouse gas emissions that can be released into the atmosphere without causing severe damage to the Earth’s climate and environment.

In efforts to stop global warming, the goal is to limit the temperature increase since the Industrial Revolution to 1.5°C. The term refers to the maximum amount of CO2 that can still be emitted in pursuit of this target.

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Why do we care? – importance and background of carbon budgets –

The more global warming has become a bigger problem, the more people get attention to reduce Greenhouse Gas.  As the problems associated with global warming become apparent, there arises a need for indicators that reveal the consequences of a rise in the overall temperature on the Earth.

COP16 and the Cancun Agreement

The turning point came during COP16 in Cancun, Mexico, in 2010 when the scientific consensus declared the need to limit global temperature rise to below 2°C. This was based on the IPCC’s fourth assessment report highlighting the potential damages and losses associated with a 2-3°C temperature increase compared to 1990 levels. The Cancun Agreement urged advanced nations to submit emission reduction targets for 2020, with developing countries outlining actions for emissions reductions.

Inception of carbon budgets: AR5

The word “Carbon Budgets” was formally introduced in 2013, the IPCC’s fifth assessment report. The report revealed a proportional relationship between cumulative CO2 emissions and predicted changes in the world’s average temperature. To keep the temperature increase below 2°C with a 66% probability, it was estimated that cumulative human-induced CO2 emissions since 1870 should stay below approximately 2,900 GtCO2.

The Paris Agreement

Ongoing research indicated that limiting temperature rise to 2°C might not be sufficient, as crossing certain critical thresholds could trigger uncontrollable warming. This hypothesis led to the realization that more ambitious goals were necessary.

In 2015, the Paris Agreement was forged during COP21, emphasizing the goal of limiting global warming to well below 2°C and striving for efforts to keep it below 1.5°C. 

This marked a significant shift in international climate ambitions, acknowledging the need for more stringent measures to combat climate change.

AR6 Climate Change 2022

The IPCC’s sixth assessment report in 2021 further defined temperature rise targets at 1.5°C, 1.7°C, and 2°C. It calculated the “Remaining Carbon Budget” for each scenario, aligning with the NDCs (Nationally Determined Contributions) set by countries worldwide. The standard for these contributions revolves around achieving the goal of limiting temperature rise to 1.5°C.

Current situation of the carbon budget

Based on scientific calculations, achieving net-zero emissions by 2050 is imperative. Failing to do so makes it statistically improbable, with a 66% certainty, to keep global warming below 1.5°C. This sets the stage for an in-depth analysis of the remaining Carbon Budget.

Evaluating emission limits

The remaining carbon budget that can be emitted in the future refers to the amount obtained by subtracting the cumulative CO2 emissions from human activities since the beginning of the industrial revolution, when global warming started, until now.

For a 50% probability of staying below 1.5°C, the cumulative emissions target is 2,600 GtCO2, and for a 66% probability of staying below 2°C, it is 2,900 GtCO2

However, between 1876 and 2017, the world had already emitted 2,200 GtCO2. As of 2018, the remaining Carbon Budget stands are below:

• 400 GtCO2 for a 50% probability of staying below 1.5°C
• 700 GtCO2 for a 66% probability of staying below 2°C

The severity of the remaining carbon budget

The quantity of the remaining Carbon Budget underscores the gravity of the current situation. The world currently emits approximately 40 GtCO2 annually. Examining the data from 2018 reveals a pressing reality:

• To stay below 2°C with a 66% probability, we have around 12 years left.
• To stay below 1.5°C with a 50% probability, we have a mere seven years until 2030 to curb CO2 emissions.

Moreover, if we exhaust the remaining Carbon Budget during this period, we may reach an irreversible tipping point. Predictions suggest that even if the world reduces CO2 emissions afterward, it will become impossible to stay below the critical thresholds of 1.5°C or 2°C, leading to unstoppable global warming.

The challenge of the emissions gap

Despite the urgency, there exists a significant challenge known as the “emissions gap.” The emissions gap is the disparity between the reduction targets set by countries (Nationally Determined Contributions – NDC) and the actual reductions needed to limit global warming. The estimated emissions gap for achieving 1.5°C by 2030 is as follows:

• Current policies = Approximately 25 GtCO2
• Unconditional NDCs = Approximately 23 GtCO2
• Conditional NDCs = Approximately 20 GtCO2

The emissions gap arises due to varying conditions and targets set by countries, making it a complex challenge to address.

The global stalemate in reducing CO2 emissions

Despite the urgent need for action, the forecast for 2022 predicts global CO2 emissions to be 40.6 GtCO2, showing no signs of decrease. While many countries, including those in the G20, pledged goals for carbon neutrality and net-zero at COP26, the current progress falls significantly behind.

Current situation in Japan

Applying the concept of the Carbon Budget globally, Japan, responsible for 3.2% of the world’s emissions, has a remaining budget equivalent to 7.5 years (the amount post-2020 to stay below 1.5°C). 

However, considering Japan’s historical cumulative emissions, accounting for 5.1% of the global total, and the per capita distribution, Japan effectively has only 1.7% of the world’s remaining Carbon Budget.

The concept of the Carbon Budget confronts countries with the harsh reality of how much greenhouse gas reduction is necessary. To achieve the goals by 2030:

• A 67% reduction in current CO2 levels is required.
• Annual global reductions of 7.6-10% (approximately 1.4 GtCO2) are necessary from 2020 to 2030.

How much should GHGs be reduced in the future?

The concept of a “carbon budget” starkly confronts each country with the reality of how much they must reduce greenhouse gas emissions. To meet the targets by 2030, a ruthless calculation demands a 67% reduction in CO2 compared to current levels. This translates to an annual global reduction of 7.6-10%, amounting to over 1.4 GtCO2 between 2020 and 2030. The IPCC’s sixth report emphasizes the imperative to cap global greenhouse gas emissions by 2025.

However, this is a global perspective. Environmental activist Greta Thunberg argues that even if the goal is to stay within a 2°C increase, advanced nations must achieve a 15% annual reduction. 

Considering cumulative emissions, advanced countries like Japan have already exceeded their allocated carbon budget. As an immediate transition to zero emissions is not feasible, these nations are compelled to intensify their reduction efforts.

The annual reduction target of approximately 1.4 GtCO2 is comparable to the emissions reduction during the 2020 COVID-19 lockdowns. Thus, adhering to the carbon budget implies that the world economy must maintain this level for the next decade, highlighting the formidable challenges ahead.

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Approaches and technologies for CO2 emission reduction

Considering the remaining carbon budget, urgent, rapid, and large-scale efforts are imperative for effective CO2 reduction by 2030. Emphasizing speed, cost-effectiveness, and widespread impact, existing decarbonization technologies need swift global implementation. Key technologies include:

• Renewable Energy: Prioritizing rapidly deployable wind power on an international scale.
• Electric Vehicles (EVs): Considering life cycle assessments, EVs have an advantage over internal combustion engine vehicles.
• Zero Energy Buildings (ZEB) / Zero Energy Homes (ZEH): Expecting significant CO2 reduction in both new and existing constructions.

While technologies like hydrogen, CCUS, and synthetic fuels hold promise, their short-term practicality is limited. With the 2030 deadline in mind, current emphasis should be on prioritizing existing technologies such as renewable energy.

Financial perspective: divestment from fossil fuels

The carbon budget acts as an indicator for investors globally to withdraw investments from fossil fuel-related companies. This divestment trend, initiated before the surge in ESG investments in 2015, indicates an 80% risk of stranded fossil fuel assets worldwide.

 Corporations globally are adopting practices like Science-Based Targets (SBT), setting emissions reduction goals, RE100 for corporate decarbonization goals, and TCFD for climate-related disclosure.

Citizen contributions to achieving the carbon budget

Changing citizens’ lifestyles plays a crucial role in conserving the limited carbon budget. The three major contributors to CO2 emissions in our lifestyles are housing, transportation, and diet. Target reductions for the average Japanese individual by 2030 are:

• Housing: 68% reduction
• Transportation: 72% reduction
• Diet: 47% reduction

For 2050, these targets increase to 93% for housing, 96% for transportation, and 75% for diet. To achieve these goals, citizens can focus on initiatives like transitioning to renewable energy for housing, adopting eco-friendly transportation options, and implementing sustainable dietary habits.

The concept of a carbon budget symbolizes the current state of climate change and the limited time and resources available.

Despite the fact that the goal of carbon budget seems nearly impossible to achieve, there is still hope and a call to action for countries, corporations, and individuals. The urgency is emphasized by the 2030 targets, making it imperative for everyone to stand up and contribute towards resolving this global crisis.

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