As world leaders and corporate representatives have returned from COP27 in Sharm el-Sheikh, a major challenge remains to bend the curve of global greenhouse-gas (GHG) emissions and mitigate the worst outcomes of climate change. While the global media’s focus will quickly shift to other, more immediate world events, continuous record-breaking and extreme weather conditions throughout 2022 are a reminder that climate change is already affecting millions of people. With the trend of global warming continuing in the coming years and decades, these impacts are expected to become increasingly visible—and the consequences increasingly dire.
This article summarizes our latest thinking on global emissions trends, based on the McKinsey Global Energy Perspective 2022 (see sidebar, “McKinsey’s Global Energy Perspective 2022”), and describes nine requirements for an orderly transition. While emissions are expected to peak in the next few years across most of our scenario outlooks, even in our most progressive scenario (which assumes that countries that currently have net-zero commitments will deliver on those targets), the world is likely to overshoot the 1.5ºC target. Indeed, an emerging take-away from Sharm el-Sheikh is that there are growing concerns that the 1.5ºC target is likely no longer realistic.1 Still, every 0.1ºC matters in trying to limit the impacts of climate warming.
Despite net-zero commitments and a global focus on increasing the rate of implementation and availability of finance, global GHG emissions are on a trajectory that leads to an expected global temperature increase of between 1.7ºC and 2.4ºC by 2100, depending on the scenario
Following a decline in 2020, global emissions showed a strong rebound and are projected to return to 2019 levels this year. The current energy crisis in Europe will at least temporarily lead to further increases in emissions as gas is replaced by oil or coal in certain applications and countries. At the same time, many countries have updated their decarbonization plans over the past two years to include more ambitious reduction targets. Across all four scenarios explored in our Global Energy Perspective 2022, global energy-related CO2 emissions are projected to peak before 2030 (see sidebar, “McKinsey’s Global Energy Perspective 2022”).2 By 2050, projected emissions are expected to be 30 to 70 percent below those in 2019. In the Achieved Commitments scenario, for example, global energy-related CO2 emissions are expected to peak around 2023 and decline by 69 percent to 11 gigatons of CO2 (GtCO2) by 2050. Across these scenarios, the global mean surface air temperature (GSAT) is expected to increase by 1.7ºC to 2.4ºC by 2100. However, given the uncertainties around the relationship between emission concentrations and global-warming impact, our scenarios show that global warming could even exceed 2.1ºC to 2.9ºC by 2100 with a one-in-six probability.3 Therefore, even though projected emissions reductions have accelerated compared to earlier outlooks, attributed in part to stakeholders’ more ambitious emissions-reduction efforts and commitments, the world remains far from achieving the 1.5º Pathway.
CO2 emissions in 2021 rebounded to historic trends alongside the global economic recovery
Meanwhile, there is an ever-increasing focus on net-zero commitments
Fossil-fuel consumption is projected to be replaced by electricity, hydrogen, and biofuels
In addition to energy-related CO2 emissions, other greenhouse gases need to be abated to achieve climate targets
Despite the growing focus on increasing the rate of implementation and availability of finance, as well as adoption of net-zero commitments, the current trajectory of global GHG emissions could lead to a global temperature increase of 1.7ºC to 2.4ºC by 2100, depending on the scenario
The 1.5º Pathway is getting out of sight, given the short time frame that remains to keep emissions within the carbon budget
Limiting global warming will require a joint effort from private companies, public institutions, and citizens
The next decade of the energy transition will be crucial. Even as reaching a 1.5º Pathway is becoming increasingly infeasible, the physical and societal impact of global warming increases with every additional 0.1ºC. Moreover, delaying the warming trajectory is crucial to give communities more time to adapt.
Striving toward net zero and the 1.5º Pathway would limit the extent of physical climate risks and reduce the odds of triggering the most catastrophic impacts of climate change. The transition itself is not without risks, including that of energy-supply volatility and supply-demand imbalances. Yet, the transition is also rich in opportunity with meaningful growth prospects, as shifting energy systems and accelerating decarbonization trends can bring new markets for low-emissions products and services. In parallel, while acting quickly will be key to achieving a low-carbon future and reaping the rewards, preparing for a world with climate-change impacts is already relevant—and becoming ever more important.