Global | We can’t afford it

Reality is a stubborn beast. 2024 turned out to be yet another year in which greenhouse gas emissions grew globally (2% according to Global Carbon Budget 2024), with energy efficiency gains or the penetration of renewables in the energy mix failing to counter the effect of increased economic activity.

Key points

• Key points:
• Unless we see a significant, immediate and sustained decoupling between economic growth and emissions, each passing year makes it less likely that we will achieve net zero emissions by the middle of this century. Less than 10–15% if the current trend continues, according to a simple exercise published by BBVA Research.
• 2024 is a good example of insufficient progress being made toward climate commitments. The mere existence of UN conferences is positive within a geopolitical landscape in which multilateralism is weakening, although the outcome of the 29th conference held in Azerbaijan, even with that low expectation, is pretty bittersweet.
• In 2025, we need to keep a close eye on the kind of policies the new US government will roll out. Energy and environmental policies are likely to change, with rollbacks for certain subsidies set out in the Inflation Reduction Act, less regulation, lower overall funding for sustainability, and more lax corporate sustainability and social responsibility (ESG) standards.
• Throughout the year, we will analyze the ambitiousness of the new climate commitments that the signatories of the Paris Agreement are to present for review at COP30 in November in Brazil. We cannot afford to set our sights any lower.

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