Global | CO2 emissions stabilize, with new record, at historical highs

Summary

Despite high interest rates and geopolitics curbing economic activity, the reduction in coal consumption and the increasing penetration of renewables, CO2 emissions slightly increased in 2023 (0.1%), pushing the World closer to surpassing the 1.5°C warming threshold before 2030.

Key points

• Key points:
• Real time estimations by Carbon Monitor reveal that worldwide CO2 emissions have exhibited a marked stability, registering a slight increment of 0.1% in 2023 (vs. 1% in 2022).
• This diminished rate of growth can be attributed to several key factors. Elevated interest rates and geopolitical uncertainties have exerted a significant dampening effect on economic activities, thereby influencing emission levels. Concurrently, the expedited integration of renewable energy sources into the energy mix and a discernible decrease in coal consumption have played pivotal roles in mitigating the extent of emission growth. Despite these developments, the trajectory of emission increases remains considerably divergent from the reductions necessary to align with established transition scenarios towards a net-zero future.
• The emission intensity ratio (the quotient of total emissions over Gross Domestic Product) has adhered to its well established trend, registering an enhancement of approximately 2.7% in 2023.
• Focusing on China, the USA, and the EU, it becomes evident that the situation regarding emissions varies significantly across these geographies. CO2 emissions in the USA have declined by 2.2%, while the EU saw a more substantial reduction of 5.1%. Conversely, China’s emissions escalated by 3%. Furthermore, the emission intensities saw a reduction of 4.5% in the USA, 5.5% in the EU, and 2.1% in China.
• This situation underscores the critical need for reinforcing decarbonization narratives with increasingly effective strategies. It is becoming increasingly clear that the willful narratives put forth by nations (story-telling) are not fully aligned with their practical actions (story-doing).

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