HSBC says world is approaching "peak planet"

HSBC: World is hurtling towards Peak Planet

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HSBC says the world is rapidly depleting its carbon budget, approaching ‘Peak Planet’ and must achieve a peak in emissions by 2020, leaving much of its fossil fuels in the ground. Impossible? HSBC says not, and is encouraged by growing public awareness, favourable economic drivers and falling technology costs for renewables.

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Global investment bank HSBC says the world is hurtling towards a “Peak Planet” scenario where the global carbon budget from 2000 to 2050 is consumed well before 2030.

To address this, a peak in greenhouse emissions will need to be achieved as a matter or urgency, and by 2020 at the latest. “This is a tough task – but not impossible in our view,” it writes. “There is a growing recognition of the severity of the situation … and we believe that ambition is about to pick up again.”

In an analysis on climate change politics and the business case for action, HSBC economists say the focus is now on five key economies to break that nexus between economic growth and emissions – in fact to double the rate of decoupling.

This so-called Carbon 5 comprises China, Russia, India, the EU and the US, and HSBC says these countries need to cut the carbon emitted per unit of GDP by between 3 and 5 per cent per annum by 2020, beyond existing efforts.

It points to five reasons why this might be achievable, despite the apparent stalemate in international talks.

First, it notes that awareness of the severity of climate impacts is rising, and public opinion is shifting, particularly in the US. It says improving economic confidence and falling clean tech costs will assist the process, and it expects an increase in policy activism in the next three years after the recent plateau.

“Ultimately, climate change is like a chronic disease, where the problem accumulates over time. If we are to avoid unmanageable disruptions to the global economy, governments have agreed that we need to keep the rise in global temperatures below 2°C,” HSBC says.

“What they haven’t agreed, however, is the likelihood of hitting this target. This will be a core part of the negotiations that are now underway for an international climate agreement by the end of 2015.”

HSBC says there  are different views of carbon budgets for the global economy, depending on differing views of risk, and where investors can generate returns.

peak planet

The most commonly cited assessment is Malte Meinshausen’s 2009 evaluation that to have an 80 per cent chance staying below 2°C, the global carbon budget is  around 886 gigatonnes of  CO2 equivalent from 2000-2050. A riskier 50:50 scenario increases the budget substantially to 1440Gt (see chart above). But by the end of 2011, 420Gt had already been consumed.

HSBC says that with annual emissions from energy alone running at over 31Gt, the budget for the 80% scenario would de depleted by 2026, and by 2039 for the 50/50 chance.

This means that without large-scale deployment of carbon capture and storage, between two-thirds and four-fifths of current reserves cannot be commercialised in a 2°C world, and global emissions need to peak before 2020. The International Energy Agency, it notes, says global CO2 emissions from energy need to peak by 2017. “The contradiction between global carbon budgets and fossil fuel reserves is gaining increasing attention,” it says.

Is this target impossible? Nearly, but not quite, says HSBC. It says major European economies – France, Germany and the UK – peaked their emissions of greenhouse gases in the 1970s, and have each cut their emissions by more than 30 per cent as a result of  oil price shocks and a structural shift away from coal for economic and environmental reasons. (see chart below)

peak oil

The challenge is the emerging world. And while the historical peaks in carbon emissions in the industrialised world nearly all occurred without any input from climate policy, that is no longer an option in the emerging world.

Hence the focus on the Carbon 5. HSBC says that there is clearly growing awareness of the severity of climate change impacts, because it is already being felt, and a growing public opinion that is supportive of action.

The economics are also aligning – with major fossil fuel importers reducing subsidies for oil and coal. Importantly, as the costs of fossil fuels mount, costs for clean technologies are falling substantially.


learning curves

It uses this graph above to show the declining costs of clean technologies, which are falling rapidly, apart from nuclear which is showing a “negative learning curve”. The total cost of ownership of LED lamps will be competitive with compact fluorescents in the YS by 2016.

“All in all, this means that the world can deliver more climate improvement for less. These cost improvements are a boon for the macro-economics of climate action, but over-supply in key sectors have been tough for investors. “

Furthermore, consumption is also being reduced. This graph (below) illustrates the decline in traffic volumes, and auto vendors are increasingly focused on the “total cost of ownership”.  China is also implementing tougher environmental standards.

peak planet


Finally, HSBC says climate policy, which has stagnated since 2010, will return to political, public and media attention. This will be helped by the release of the IPCC reports, beginning this September.

HSBC says there will be a “bundle of drivers” that will increase the focus on low-carbon growth – and an explicit focus on cutting carbon will be only one element among many. The most important factors will be changing economic structure, energy substitution via efficiency and lower carbon supply, efforts to reduce local air pollution, water stress, as well as carbon regulation and pricing.

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  1. keith williams 7 years ago

    Surely there must be a way to get both major parties to respond to these kinds of reports?

    Finding out what each party plans to do about these issues is perhaps the most important information for voters figuring out who they will support.

    How do you vote to ensure another hung parliament ???… probably our best hope for the future currently as we wouldn’t have a price on carbon if either party had been able to govern in their own right.

    • Tim 7 years ago

      Thankfully UKIP is not a major party! They would have us all driving over a cliff in our 4x4s.

      • Terry Wall 7 years ago

        Hi Tim
        love every thing that you say with one exception. That is that we need less people.. Generations have been saying that and have been proven incorrect time and time again.

        There is more in the corruption of the food supply than the ability of the world (humanity and the soil) to produce it. From my book you will see that using a less commercial subsidized soil raping production systems including GMO, patents, Nano particles is a complete ponzi scheme for producing food. These regulation free unsustainable nutrient depleted methods of growing food are only producing enough food for 4.2 per hectare. EU is a little better at 6 per hectare. Now you need to get you mental wherewith all’s together: And if you live in the USA: Be afraid: China, by using largely organic nutrient recycling methods produces high integrity food enough for over 30 people per hectare.

        No shit does not describe it properly as it gets involved 🙂

      • Terry Wall 7 years ago

        Hi Tim
        love every thing that you say with one exception. That is that we need less people.. Generations have been saying that and have been proven incorrect time and time again.

        There is more in the corruption of the food supply than the ability of the world (humanity and the soil) to produce it. From my book you will see that using a less commercial subsidized soil raping production systems including GMO, patents, Nano particles is a complete ponzi scheme for producing food. These regulation free unsustainable nutrient depleted methods of growing food are only producing enough food for 4.2 people per hectare. The EU is a little better at 6 per hectare. Now you need to get you mental wherewith all’s together: And if you live in the USA: Be afraid: China, by using largely organic nutrient recycling methods produces high integrity food enough for over 30 people per hectare.

        No shit does not describe it properly as it gets involved 🙂

    • Jo Lewis 7 years ago

      Perhaps you could vote Green.

      • Tim 7 years ago

        Always do – I wish everyone else would!

  2. Terry Wall 7 years ago

    I just want to know, which part of this is difficult to understand?
    The world needs to:
    Sequest carbon in the soil and above and anywhere else
    Decrease extreme temperature fluctuations
    Increase humidity so plants grow better
    Increase food production
    Produce building materials from renewable sources
    Improve rainfall reliability
    Improve Gross Domestic Happiness

    Ok I am sure you will have connected the dots by now. This should be easy but as we all know it is not. Forestry from landowners gets little or no media debate. The single reason for that will be the difficulty that corporations perceive in patenting the process and informing their shareholders of the squillions that they can expect to make.

    Governments themselves, do not understand as they are led by people with little vision and what they have reaches our a maximum of 3 to 4 years. So they resort to listening to lobbyists and we all know what that is about.

    Third world countries do not even place any significance on private land title so have to continually battle with young men who have “no hope for the future” except by the gun.

    The answer is so easy that it is being missed.
    Put the Rules in place
    Use satellite monitoring
    Open trading desk for credits
    Then sit back and watch the speed and skills of
    those on the land using their own money do all of above.
    Problem solved. 🙂

  3. Kevin O'Dea 7 years ago

    The major parties in Australia may try to avoid the issue, but the mounting costs and evidence of extreme weather events as a consequence of climate change will force their hand in the near future. Witness the aftermath of Hurricane Sandy’s impact on New York and the shift in US public policy. Climate Change denialism is in its last death throes.

  4. keith williams 7 years ago


    The reason we are in this pickle is that we are trying to take a few hundred million years of stored carbon and put it into the atmosphere all at once.

    We are already in deep trouble and worse to come. The urgent need is to stop burning fossil fuels (oil, coal, gas). Virtually every expert group (academic groups, banks, insurance companies, etc all agree on the problem). The only groups trying to destroy the planet are those with vested interest in the fossil fuel industries and politicians who see their short term interest much more important than the survival of their citizens.

    Of course there are many many other things to do, but first we need to stop making it worse.

    • Terry Wall 7 years ago

      Totally agree and should have added that at beginning of my comment. It does appear that common sense and economics is rapidly and effectively motivating technology to reduce carbon output.

      But that is not going to be enough.. hence my reminder of the power of trees to slow the carbon flywheel, until technology makes our output manageable..

      • Alastair 7 years ago

        I’d suggest the technology is readily available Terry. Consider the Beyond Zero Emissions authored Zero Carbon Australia Stationary Energy Plan as one ten-year pathway to 100% renewable energy consumption in this country. Audited and costed and endorsed by many prominent Australians — yet bugger all buy in from Federal and State governments even though it’s the sort of plan they should have invested in three decades ago when even I knew AGW was a serious threat to the planet and any economies dependant on a “safe climate”.

        I’d also suggest shifting to zero emissions inside ten years will be the most effective single step we can take but certainly sequestration and geo-engineering are also inevitably going to be required since we left our run way to late on securing the climate. (Corporations will get their look in on those gigs as well as despatch-able utility scale renewable energy plants no doubt).

        • Julien Peter Benney 7 years ago


          what is needed is for the “Zero Carbon Australia” plan to be shown to foreign governments and enforced on Australia via the threat of severe sanctions or loss of its phosphate supply without which our 300,000,000 year old soils would be totally unable to support crops.

          The real cause of the global environmental crisis lies in the exploitation (via land clearing and coal mining) of the huge carbon storage of the extremely ancient lands of Australia and the African nations of South Africa, Botswana and Namibia. These nations – not the so-called emerging economies – are and always have been the real challenge in greenhouse gas emissions.

          Europe, Asia, even the Americas could achieve a 100 percent renewables economy and it would do absolutely nothing without putting Australia and Southern Africa into line. Given that Australia and Southern Africa have many times more species and thousand more unique species plus an ecology greatly more representative of geological history than Eurasia and the Americas, where to start is a non-issue.

  5. D. John Hunwick 7 years ago

    “This is a tough task – but not impossible in our view,”

    Any Report that contains a sentence like this is not worth reading!! “It’s a tough ask” Well blow me down. The reason this prolem is still floating around unresolved is because – its tough!! More than that – we don’t have an option. It is NOT impossible. It will be achieved one way or another. Nature will either kill us off, or we will control ourselves to the point where the problem will be less catastrophic than it would be otherwise. Democratically elected governments can not get the mandate to dramatically reduce the hyuman population. We do NOT need more food – we less people eating it. If we cannot stop coal-fired power stations by 2020 then like the Titanic – we have run out of time and we will hit the iceberg. I read recently what Winston Churchill once said:
    “If you will not fight for right when you can easily win without blood shed; if you will not fight when your victory is sure and not too costly; you may come to the moment when you will have to fight with all the odds against you and only a precarious chance of survival. There may even be a worse case. You may have to fight when there is no hope of victory, because it is better to perish than to live as slaves.”
    What effective fighting are you doing??

  6. Nick Sharp 7 years ago

    Maybe the time of the denialosaurs is passing at last!

    It’s great when the sober-suited bankers (and no doubt insurance company actuaries) start sounding the siren.

    And quietly, without fanfare, I bet those risk-averse folk are working out how to protect their corporate empires from the biggest catastrophe that may now be well on its way – massive sea level rise. It is no longer apocalyptic to envisage a time (~2100-2200?) when most of the world’s current cities have sunk below sea level. Many of the greats (London, Tokyo, New York, Shanghai, Sydney) are now only a few metres above. Except Canberra … sigh.

    Of course the likes of Tuvalu, The Maldives, and large chunks of Bangladesh will go under decades before. And The Nederlands will be struggling (eventually to fail) with its centuries long fight with the ocean.

    So where next, and when?

    All move to a 5-acre plot at least 70M above current mean high tide, grow veggies, raise chooks? Okay for the hardy, and only then until there are kids to school or invalids needing a hospital.

    No, we need to begin to consider new medium sized towns, perhaps 10-20K residents. Large enough to support the key infrastructure facilities (schools, clinics, small hospital), yet small enough to avoid most of the costs of today’s cities and suburbs which gobble up vast quantities of non-renewables. And surrounded by enough land to provide most of its food, fibre, timber and wilderness area.

    Such towns could avoid the need (internally) for: cars (walk, cycle, skate, scoot); huge roads (just big enough for walkers, cyclists, and a very occasional service vehicle); sewers (composting toilets, light grey waste water to gardens); storm drains, reservoirs and mains water reticulation (use roof runoff).

    Australians generally might not need such a move for some time, (though it would be good to prototype very soon). But perhaps it is time to consider a new home for an island people. We could call the first town New Tuvalu. There’s about 10,000 of them. They’d fit nicely in one such town. Their highest land is only 4500 above sea level. Er, that’s millimetres.

    It’s time to realise that the impact of climate change is only the second biggest issue facing humanity. Topping the list is total sustainability. Oh, the ‘S’ word again – so last year!

    No it isn’t. It’s here to haunt us until we obey the planet’s simplest long term rule: “stop using up non-renewables” or get off. Our choice. No further options.

    Nick Sharp
    Author of:…ForHumanity

    • Nick Sharp 7 years ago

      Hmmph! This web site thinks an ellipsis (“…”) marks the end of a URI, so my link above has been broken, as “…ForHumanity” is not considered part of it. It is! Instead, just click Nick Sharp at the HEAD of my comment above.

      • Concerned 7 years ago

        What sea rise?

        • Nick Sharp 7 years ago

          I shall assume yours is a serious question. You might like to start at:

          But my main argument is that true long term sustainability is almost impossible to achieve in today’s city/suburban living, even if significant sea level rise were never to happen.

          But as some rise is very probable, and probably human-caused, we should be considering the fate of those populations directly and almost immediately threatened. The holding of a Maldives cabinet meeting under water may have been a PR stunt, but its point was deadly serious. With an average height above sea level of 1.5M THe Maldives be history within this century.

          • concerned 7 years ago

            Your references do not inspire me. There is recent discussion regarding the modelling, as is becoming prevalent. Basically the predicted end results are not being seen.
            In addition from Quadrant recently.
            “The rates of global sea-level rise cited by CSIRO/BOM are well established in the scientific literature; they are therefore neither surprising nor alarming.
            High quality tide-gauge measurements have established (i) that global sea-level rose at an overall average rate of ~1.8 mm/yr (18 cm) during the 20th century, and (ii) that in line with the background multi-decadal climate signal and regional tectonic movement, local variations in the annual rate of global sea-level change spanned a range between ~-2 mm/yr (i.e., sea-level fall) and +6 mm/yrii. Modern satellite measurements of sea-level change are available since 2004, and indicate a slower rate of average rise over recent years of only 0.33 mm/yriii.
            In any case, global average mean sea-level is an abstracted statistic that has little relevance to coastal management at specific sites. As summarised by Singer et al. (Non-governmental International Panel on Climate Change, 2008 Report, p. 51):”

  7. Ramon Arratia 7 years ago

    As mass consumers of ‘stuff’ (Which I can’t see changing any time soon) a sensible start might be to focus on creating a circular economy (primarily via full product transparency). If businesses take this seriously now, we can tackle this problem at the root.

  8. M Buckner 7 years ago

    Guy McPherson, professor emeritus of natural resources and the environment at the University of Arizona, says that nine of the ten climactic self-feedback loops are now irreversible. That’s pretty succinct.

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