Carbon Budgets Seminar Summary

Carbon Budgets Seminar

Thank you to everyone who attended our Carbon Budgets Seminar on 10 October 2017. In particular we would like to thank our speakers, David Ritter (Greenpeace), Professor John Chandler (UWA) and Michael Bennett (UWA / EDOWA) for their interesting presentations, which certainly generated a lot of debate and discussion at the end. In case you missed this event, we have a summary of the impact of carbon budgets below prepared by Marc Allen, Technical Director from Engeco.


In recent years, discussions around greenhouse gas (GHG) management and action on climate change have featured carbon budgets as a core concept. The concept of the carbon budget is relatively simple, it’s the total amount of greenhouse gases we can emit that will give us a likely chance of meeting our climate targets. In the Intergovernmental Panel on Climate Change (IPCC) fifth assessment report (AR5), the carbon budget was quantified for a number of scenarios showing the probability of certain temperature rises by the year 2100. The full set of scenarios is shown below:

In order to have a 66% probability of limiting temperature rise to 2 degrees by 2100, the global carbon budget (from 1870) is estimated to be 2,900 Gt of CO2-e (2,900,000,000,000 tonnes.) [IPCC AR5 Synthesis Report]. This sounds like a lot but it does include that which was emitted between 1870 and today. (Note – the 66% isn’t a true probability, rather it is the carbon budget that corresponds to 66% of model outputs resulting in temperature rise of less than 2 degrees by 2100. A subtle difference but worth acknowledging.)

The lower part of the table above shows that the carbon budget from 2011 is 1,000 Gt of CO2-e, which implies that estimated total GHG emissions between 1870 and 2011 were 1,900 Gt of CO2-e. According to Carbon Brief, who provide an update on performance to the carbon budget annually, global emissions between 2011 and 2016 consumed 238 Gt of this budget – which leaves 762 Gt CO2-e. Annual anthropogenic emissions (fuel combustion, cement, land use change etc.) are estimated at approximately 40 Gt CO2-e currently. This means that there is approximately 20 years of available budget left at current rates.

Now the IPCC report was released prior to the events at COP21 in 2015. This is where, via the Paris Agreement, the world agreed to limit temperature rise to “well below 2 degrees C … and to pursue efforts to limit the temperature increase to 1.5 degrees”. The IPCC also provided detail on carbon provided detail on carbon budgets for 1.5 degrees Celsius. The Synthesis report of AR5 indicated that the budget for a 66% chance of 1.5 degrees temperature rise by 2100 is 400 Gt of CO2-e from 2011. This would then leave just 4 years to decarbonise fully.


So clearly the concept of a carbon budget is important. It appears that the growth in global emissions has plateaued as growth in emissions has greatly reduced for the last three years in a row – driven in part by a move away from coal as a primary energy source in both China and the US, the world’s two largest emitters in absolute terms. This provides some hope that the carbon budget might be met – for two degrees at least.

Equally important however, is the trajectory taken to get to the budget. These trajectories can be seen as the emissions reductions pledges made by countries as part of their Nationally Determined Contributions (NDC) under the Paris Agreement. Given the budget is just that, a limit on the total amount of emissions allowable, the emissions reduction trajectories set how quickly we can get there. Earlier action can be considered to be more cost effective as delay means that more steep emissions reductions will be required, which will be more of a shock on the global economy. There may then come a time where the rate of emissions reduction required is so steep that emissions removal is required.

Any technology to remove carbon dioxide from the atmosphere once it has dispersed to ~400 parts per million is likely to be very expensive, and negative emissions concepts such as bio-energy carbon capture and storage have not yet been proven at scale. Given the global carbon budget to achieve 1.5 degrees is already quite tight, it is probable that CO2 removal will be a necessity for this scenario. A number of 2 degree scenarios also shows negative emissions in the latter half of the century, given expected/assumed emissions reduction trajectories. This is an acknowledgement of the fact that a total decarbonisation within 20 years is considered unlikely. From a carbon budget point of view, current thinking is that there will be an element of overshoot and then negative emissions at a later time.

The IPCC has published detail on Representative Concentration Pathways (RCPs), which are different paths that emissions can take, leading to different temperature rise outcomes. RCP 2.6 corresponds to a temperature rise of less than 2 degrees by 2100 (the 2.6 refers to radiative forcing not temperature), though still includes a degree of negative emissions between 2050 and 2100. A new set of pathways is being developed by the IPCC and will form part of a special report that is intended to be released in September 2018 and explores 1.5 degree temperature rises.


Companies should understand what different scenarios of climate change action mean for their bottom line. When planning scenarios for developing a company’s response to climate change risks, trajectories for emissions reductions must be looked at in conjunction with carbon budgets. as stakeholders are increasingly looking at both when judging future performance of a company. The trajectories can provide insight into the expected level of price signal applied to GHG emissions and into changing commodity prices and how rapidly they may move relative to now. The budget provides detail on whether expected trajectories can meet overall climate targets.

Another action that can be taken is to consider setting science based targets for their organisations, and using their internal analysis to determine their targets to influence their supply chain. Science based targets look at climate science and the effort required to meet global temperature targets to generate company based targets – which are then publicly disclosed. It is important to explore emissions across the whole value chain of the company including suppliers and the use of products to determine total impacts on the company from climate action and to encourage science based targets for key providers in the supply chain.

We thank the sponsor of the Carbon Budgets seminar, Engeco for providing this summary.