Carbon Budget — Definition and GHG Accounting Context
Limiting warming to 1.5 °C is not an aspiration that can be met at any pace — it is an arithmetic constraint. The climate responds to the total CO₂ ever emitted, so there is a finite quantity the world can still release before the limit is breached.
That finite quantity is the carbon budget: the hard ceiling on cumulative emissions that turns a temperature goal into a number of tonnes.
A carbon budget is the finite cumulative amount of CO₂ that can be emitted while keeping global warming below a chosen limit (such as 1.5 °C) with a given probability. It exists globally as a scientific limit, and can be allocated to a company as its fair share — the basis of a science-based target.
What a carbon budget is
A carbon budget is the maximum cumulative quantity of carbon dioxide that can be emitted globally for a given level of warming to remain within a chosen limit, at a stated probability. It converts a temperature target — 1.5 °C, or well below 2 °C — into a finite stock of tonnes that cannot be exceeded.
The word “budget” is exact: like a financial budget, it is a fixed total that is drawn down by spending (emitting) and cannot be replenished on human timescales. Once the budget is spent, holding to the temperature limit requires net emissions to be zero — there is no more room. This is what makes a carbon budget the scientific backbone of net-zero targets: net zero is simply the point at which drawing down the budget must stop.
This page defines the concept and how it is allocated; the emissions figures measured against a budget come from the inventory, and the target-setting that uses a company’s budget is covered by the concepts this entry links to.
Global vs organizational carbon budgets
“Carbon budget” is used in two related but distinct senses, and conflating them causes confusion.
| Global carbon budget | Organizational carbon budget | |
|---|---|---|
| What it is | The total CO₂ the world can still emit for a temperature limit | A company’s allocated share of that global budget over a period |
| Set by | Climate science (IPCC) | Fair-share allocation methods |
| Units | Gigatonnes CO₂ (GtCO₂) | Tonnes CO₂e (tCO₂e) |
| Used for | Defining the global limit | Setting a science-based target |
The global budget is the scientific quantity; the organizational budget is that quantity divided down — a single company’s slice of the remaining global allowance, which becomes the yardstick for how fast it must cut.
Why a budget exists
A carbon budget is possible because of a striking feature of the climate system: peak warming is very nearly proportional to the cumulative amount of CO₂ ever emitted, regardless of exactly when it was released. This near-linear relationship means each additional tonne of carbon dioxide adds roughly the same increment of eventual warming — so a temperature limit translates directly into a total-tonnes limit.
It works for CO₂ specifically because CO₂ is so long-lived that it accumulates rather than decaying. Short-lived gases like methane behave differently — their warming depends more on the ongoing rate of emission than the cumulative total — which is why carbon budgets are defined in CO₂ and other gases are handled alongside them. The cumulative logic is also why the timing of cuts matters less than the total: a tonne saved today and a tonne saved in 2040 both leave more room in the same fixed budget.
The remaining budget
What matters for policy is the remaining budget — how much is left from today. It depends on the temperature limit and the probability of staying within it: a higher chance of success means a smaller budget. The IPCC’s Sixth Assessment Report estimated that, from the start of 2020, about 500 GtCO₂ remained for a 50% chance of limiting warming to 1.5 °C, and roughly 400 GtCO₂ for a 67% chance.
| Point | GtCO₂ remaining |
|---|---|
| 2020 | 500.0 GtCO₂ remaining |
| 2021 | 460.0 GtCO₂ remaining |
| 2022 | 420.0 GtCO₂ remaining |
| 2023 | 380.0 GtCO₂ remaining |
| 2024 | 340.0 GtCO₂ remaining |
| 2025 | 300.0 GtCO₂ remaining |
The budget shrinks by roughly 40 GtCO₂ every year — the pace of current global emissions — so it is a fast-moving target. Delay is expensive in budget terms: every year of high emissions removes a year’s worth of room, forcing steeper cuts later or pushing the limit out of reach. Where emissions temporarily exceed a budget-consistent path, the resulting overshoot has to be compensated by later net-negative emissions — drawing CO₂ back out with removals — which is harder and less certain than not emitting in the first place.
A company’s carbon budget
Allocating a slice of the global budget to a single company turns the science into a corporate target. Fair-share methods divide the remaining budget across the economy — by sector convergence or by an equal rate of reduction — to give a company the cumulative emissions it can release on a 1.5 °C-aligned path. That allocation is precisely what a science-based target encodes: the near-term and net-zero reductions consistent with staying inside the company’s budget.
Because the budget is cumulative, a company’s target is really a constraint on its area under the emissions curve, not just its end-point. Front-loaded cuts spend less of the budget than a plan that stays high and drops late — another reason near-term targets and a credible net-zero trajectory matter more than a distant end-date alone.
Worked micro-example
A rough sense of scale from the global figures (IPCC AR6, from 2020):
| Quantity | Value |
|---|---|
| Remaining 1.5 °C budget (50% chance) | ~500 GtCO₂ |
| Current global CO₂ emissions | ~40 GtCO₂ / year |
| Years at the current rate | ~12.5 years |
At an unchanged rate, the 1.5 °C budget is exhausted within about a decade of 2020. That is the arithmetic behind the urgency of near-term targets: the constraint is not a distant 2050 line but a budget being spent right now, which is why cutting emissions this decade does far more to preserve it than the same cut made later.
Common mistakes
- Confusing the global and organizational budgets. One is the world’s total limit in GtCO₂; the other is a single company’s allocated share in tCO₂e. They are different quantities.
- Ignoring the probability. A carbon budget is meaningless without its odds — the budget for a 50% chance of 1.5 °C is larger than for a 67% chance.
- Treating the budget as fixed in time. The remaining budget shrinks every year by the amount emitted; a figure quoted for 2020 is already substantially smaller today.
- Thinking timing doesn’t matter. Because the budget is cumulative, delaying cuts spends more of it — front-loaded reductions preserve far more room than late ones.
- Assuming overshoot is easily reversed. Exceeding a budget requires later net-negative emissions via removals, which are harder, costlier, and less certain than avoiding the emissions.
Turn a 1.5 °C budget into a target — set a science-based near-term goal.
Frequently asked questions
A carbon budget is the finite cumulative amount of CO₂ that can be emitted while keeping global warming below a chosen limit, such as 1.5 °C, at a stated probability. It converts a temperature target into a fixed number of tonnes. It exists globally as a scientific limit and can be allocated to a company as its fair share.
The IPCC’s Sixth Assessment Report estimated that from the start of 2020, about 500 GtCO₂ remained for a 50% chance of limiting warming to 1.5 °C, and roughly 400 GtCO₂ for a 67% chance. Because the world emits around 40 GtCO₂ a year, the remaining budget is considerably smaller now and continues to shrink annually.
Because peak warming is very nearly proportional to the total CO₂ ever emitted, not to the rate in any single year. CO₂ is long-lived and accumulates, so each additional tonne adds roughly the same increment of eventual warming — which lets a temperature limit be expressed directly as a cumulative-tonnes limit.
A company carbon budget is a slice of the global budget allocated to one organisation as its fair share — the cumulative emissions it can release on a 1.5 °C-aligned path over a period. Fair-share allocation methods produce it, and it becomes the basis of a science-based target, which encodes the reductions needed to stay within it.
Overshoot is when cumulative emissions temporarily exceed a budget-consistent path. Returning within the limit then requires later net-negative emissions — actively removing CO₂ from the atmosphere with carbon removals. Overshoot is riskier than staying within budget, because large-scale removals are harder, costlier, and less certain than avoiding the emissions in the first place.