Global Energy Perspective 2023: CO2 emissions outlook

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The Global Energy Perspective 2023 models the outlook for demand and supply of energy commodities across a 1.5°C pathway, aligned with the Paris Agreement, and four bottom-up energy transition scenarios. These energy transition scenarios examine outcomes ranging from warming of 1.6°C to 2.9°C by 2100 (scenario descriptions outlined below in sidebar “About the Global Energy Perspective 2023”). These wide-ranging scenarios sketch a range of outcomes based on varying underlying assumptions—for example, about the pace of technological progress and the level of policy enforcement. The scenarios are shaped by more than 400 drivers across sectors, technologies, policies, costs, and fuels, and serve as a fact base to inform decision makers on the challenges to be overcome to enable the energy transition.

CO2 emissions are the main driver of global warming, and have increased to record highs. In 2022, following a short-lived dip at the height of the COVID-19 pandemic, global CO2 emissions reached 36.8 gigatons (Gt).1 Emissions increased by an additional 1.1 percent in 2023, largely due to the economic rebound and a further increase in fossil fuel consumption, with the energy crisis and high natural gas and liquefied natural gas (LNG) prices in 2022 triggering an increased use of unabated coal as a cheaper but more emissive fuel.2

The increase in global temperatures caused by elevated atmospheric CO2 levels is already being felt. In the second half of 2023, the global average temperature exceeded the 1.5°C threshold for 182 of the 184 days between July 1 and January 1, with 2023’s “short-term El Niño influenced” global warming already at 1.48°C compared to pre-industrial levels.3 In all our bottom-up energy transition scenarios, average warming (excluding potential short-term effects such as this year’s El Niño) would reach 1.5°C before 2035, in line with IPCC expectations.4 This could cause significant impacts, including increasingly extreme weather conditions and disruption to countries and economies around the globe.

Given the fact that global temperatures would increase beyond the 1.5°C threshold in all our bottom-up models, there is an urgent need to further increase efforts in both mitigation and adaption to minimize further temperature increases. The UAE Consensus, delivered at COP28 in December 2023, acknowledges that limiting global warming to 1.5°C with no or limited overshoot requires deep, rapid, and sustained reductions in global greenhouse gas emissions of 43 percent by 2030 and 60 percent by 2035 relative to the 2019 level to reach net-zero carbon dioxide emissions by 2050.5 Progress in curtailing emissions is being made—in all our energy transition scenarios, global carbon dioxide emissions begin to decline before 2025, driven largely by the replacement of coal power by renewables and natural gas, along with other changes to the emissions trajectories of major emitters.

CO2 emissions have continued to rise, largely driven by coal

Emissions have continued to rise since 2019, driven by coal in emerging economies.

A large proportion of global emissions are covered by net-zero commitments and emissions trading systems

An increasing amount of emissions fall under an emissions trading system.

Across scenarios, CO2 emissions would begin to decline by 2025

Reduction of coal in China and increased uptake of EVS in advanced economies largely drive the emissions peak before 2025.

The projected post-2025 decline in emissions is driven by several major sectors and geographies

Industry in China and road transport in North America and the EU are the largest drivers of overall short-term emissions decline.

Average warming would exceed 1.5°C by 2035 in all scenarios

Under all scenarios, average warming is expected to exceed 1.5 degrees Celcius by 2035.

Due to rising temperatures, adaptation efforts will likely be required regardless of the speed of the energy transition

Adaption efforts are likely to be needed regardless of the speed of transition.

Despite a significant trend-break in the global emissions trajectory, our projections show that, without urgent action, there is still a high likelihood that the world will experience warming of over 1.5°C. This, along with the growing likelihood of larger-scale negative impacts of global warming , emphasize the urgency to accelerate efforts to reduce emissions and mitigate climate change, along with the need to prepare for additional avoidance measures and to mitigate the consequences of a changing climate with adaptation and climate risk premiums.

Climate adaptation is a fast-growing field today, with 128 countries, covering around 60 percent of the world’s population, having national adaptation plans. However, for 70 percent of the countries with plans in place, these are still at a high level of abstraction (for example, they are still missing a cost assessment). Moreover, investment requirements tend to be significant; of these countries that have assessed plans, the investments can already run up to 5 percent of GDP in emerging economies, with climate adaptation measures in the future likely to require a larger share of GDP as climate change effects compound. At the same time, creative applications of climate mitigation strategies can help to create jobs and economic value for communities while mitigating their risk of the impacts of global warming.6Paving the way to resilience: Strengthening public sector adaptation planning and execution,” McKinsey, November 27, 2023; and “Ten key requirements for a systemic approach to climate adaptation,” McKinsey, November 8, 2023.

Advancing climate adaptation may need to occur alongside concerted global efforts to reduce greenhouse gas emissions. The opportunities this creates should be captured proactively, as vulnerable groups and the planet at large have much to gain.

To request access to the data and analytics related to our CO2 outlook, or to speak to our team, please contact us.

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