Decarbonization: driving value in private markets
What is ‘decarbonization’ and what makes it so topical in the current environment?
PA: ‘Decarbonization’ - the reduction of greenhouse gas (GHG) emissions in the atmosphere (including CO2) – is essential to limit global warming. In practice, this will require a major systemic shift from fossil fuel usage to alternative, low-carbon energy sources.
Since the Industrial Revolution, greenhouse gases in the earth’s atmosphere have been rising steadily alongside mean global temperatures. At the beginning of the 1960s, booming population and economic growth led to a strong acceleration in the consumption of fossil fuels. This resulted in higher CO2 emissions and translated into global warming of 1.1°C above pre-industrial levels in 2021. If this trend is not reversed, global temperatures could rise to as much as 4-5°C by the end of the century, which could be incompatible with human life as we know it.
