Carbon Budget
A carbon budget is the maximum cumulative amount of greenhouse gas emissions permitted over a defined period, used at global, national, and organisational levels to guide decarbonisation trajectories.
What is Carbon Budget?
The carbon budget concept operates at multiple levels. At the global level, the IPCC has estimated the remaining carbon budget — the total amount of CO₂ that can still be emitted while keeping global warming below 1.5°C or 2°C. As of the IPCC’s Sixth Assessment Report, the remaining budget for 1.5°C (with 50% probability) was approximately 500 GtCO₂ from the start of 2020.
At the national level, the UK’s Climate Change Act establishes five-yearly carbon budgets that cap total UK emissions. These budgets decline over time towards the net zero target. The Sixth Carbon Budget (2033–2037) limits emissions to 965 MtCO₂e over the period.
At the organisational level, a carbon budget translates the global or national budget into a company-specific emission allowance. The Science Based Targets initiative (SBTi) uses carbon budget concepts to calculate the annual reduction rate required for a company’s targets to align with 1.5°C or well-below 2°C pathways.
Practical Examples
The IPCC estimates the remaining global carbon budget for 1.5°C is approximately 400 GtCO₂ from 2023, meaning current annual emissions of 40 GtCO₂ would exhaust the budget within a decade.
The UK’s Sixth Carbon Budget requires a 78% reduction in emissions below 1990 levels by 2035, translating to a maximum cumulative budget of 965 MtCO₂e over the period.
A company uses the SBTi’s carbon budget approach to set a 4.2% annual reduction target for its Scope 1 and 2 emissions, aligning with a 1.5°C pathway.
How Climatise Helps
Climatise helps organisations set and track emission reduction targets aligned with carbon budget-based pathways, monitoring actual emissions against the required trajectory and highlighting deviations early.
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