Background to the need for carbon valuation

The impact of greenhouse gases (GHGs)

Increasing atmospheric concentrations of ‘greenhouse gases’ (GHGs), of which carbon dioxide (CO₂) is the most important, is a primary cause of anthropogenic (human-made) climate change.

The global atmospheric CO₂ concentration has risen by over a third from pre-industrial levels of about 280 ppm in 1750 to 406ppm in 2018, far exceeding the maximum of the natural range over the past 650,000 years of 300 ppm. Some recent estimates (GCP, 2020) indicate that the global atmospheric CO₂ concentration is currently rising at over 2ppm a year. Aggregate atmospheric GHG concentrations (including gases such as methane and nitrous oxide), often measured in carbon dioxide equivalents (CO₂e), currently exceed 450ppm CO₂e (EEA, 2019).

Human activities to date are estimated to have caused a global temperature rise by around 1°C above pre-industrial levels. If warming continues at its current rate, global temperatures are expected to rise to 1.5°C above pre-industrial levels by between 2030 and 2052. For global warming to be limited to 1.5°C with no (or limited) overshoot, a reduction of around 45% in global net zero CO₂ emissions will be needed by 2030, with global net zero CO₂ emissions needed by around 2050 (IPCC, 2018).

Establishing a target stabilisation level

As the impacts of warming associated with different atmospheric concentrations of GHGs are uncertain, the target stabilisation level depends on a balance of expected probabilities and attitudes to risk. To avoid dangerous climate change, the UK and other signatories to the Paris Agreement (FCCC, 2015) committed to adopting policies consistent with holding the increase in the global average temperature to well below 2°C above pre-industrial levels, and to pursuing efforts to limit the temperature increase to 1.5 °C. There has been a growing international consensus that limiting global average temperature increase to 1.5 °C is more consistent with limiting risks of dangerous climate change to an acceptable level, than 2°C warming (e.g. IPCC, 2018).

In the absence of additional efforts to reduce emissions, ‘Business as usual’ could lead to an atmospheric concentration of between 750ppm and over 1300ppm CO₂e by 2100. This could potentially lead to a temperature rise of 7°C or more above pre-industrial levels (Stern Review, 2006, Box 8.1, p.220; IPCC, 2014).

In 2019 the UK became the first major economy to commit to bringing all its GHG emissions to net zero by 2050 (DBEIS, 2019a). A number of other countries also have committed to reaching a net zero emissions target by 2050, or in some cases, earlier (CCC, 2019, Table 2, p.22). For example, Scotland has adopted a target of net zero emissions by 2045. Pledges so far by signatories to the Paris Agreement are viewed as consistent only with limiting warming to around 3°C by 2100 (CCC, 2019). A crucial international climate change conference (COP26) is expected to be hosted in the UK in 2021.

The impact of higher temperatures

With higher temperature increase, comes more severe impacts and a greater likelihood of exceeding critical thresholds. For example, instability of the marine ice sheet in Antarctica and irreversible loss of the Greenland ice sheet could be triggered at around 1.5°C to 2°C of global warming, which would lead to global sea level rise of several metres (IPCC, 2018).

If mitigation measures are only gradually introduced, we might be facing a 5% probability of a greater than 10°C change in mean global surface temperature and a 1% probability of a greater than 20°C change in around the next 200 years compared to pre-industrial revolution levels (based on data from scientific papers covered by the IPCC (2007, Table 9.3). Weitzman (2009) notes that in either case such rapid warming would lead to mass extinctions and biosphere ecosystem disintegration, destroying life on Earth as we know it.