Bad news: 2022 is a record year for global greenhouse gas emissions
Global fossil fuel emissions are now 5% higher than when the Paris agreement was executed. While emissions were predicted to fall post-COVID in a global effort to build back better, only 6% of stimulus money across G-20 nations went into areas with emissions reduction potential.
We’ve seen this type of bounce-back before—emissions recover or even rise after economic crises. It demonstrates a continuous failure in our ability to decouple environmental impact from economic growth.
This time around, the reasons for the rise in emissions are primarily a surge in flights in the U.S. and a significant increase in coal and oil emissions in India (6%!). While the EU has increased its use of coal to an all-time high—part of why we’re back to where we were in 2014—the resulting emissions are a wash when you factor in reductions in natural gas. And China has not seen an emissions increase as the pandemic lockdowns continue. While India has overtaken the EU in annual emissions, per capita emissions in India and China continue to be lower than in the U.S. or EU.
A glimmer of hope is that year-over-year, the rise in emissions has decreased as new climate policies are implemented, but this isn’t enough to get us anywhere near 1.5°C by 2050.
Going into 2023, companies should accelerate their emissions reduction targets and implement business models that allow for sustainable growth (i.e., without further increasing emissions as would be the case in a circular economy), support climate policy, and electrify their operations alongside a renewable energy transition strategy. This brings us to our next point…
Good news: Renewables will continue their exponential growth
Coal today accounts for more than a third of all electricity generation globally and is the most common generation source. That will soon change. A new International Energy Agency (IEA) report projects a rosy picture for the growth of renewables. The expectation: They’ll overtake coal by 2025.
IEA projects renewables will go from a 28% share of electricity generation globally to 38% by 2027 and solar alone is expected to exceed coal by 2027. IEA also projects that renewable capacity expansion over the next five years will be 2,400 GW—nearly as much capacity added in the last 20.
Renewables are expected to account for 90% of all new grid capacity during the next five years. The IEA’s projections are 30% higher than last year, largely due to the U.S. Inflation Reduction Act and new plans from the EU and China. It also attributes the acceleration of Europe’s clean energy transition to Russia’s invasion of Ukraine. In short: this rapid expansion of renewables is expected to accelerate the continuation of the falling costs of renewables—they may soon be undeniably cheap and simply good business.