Carbon Emissions Ratio to World GDP Falls by 1.6% in 2024
The carbon intensity of world gross domestic product (GDP) or the ratio of CO2 emissions to GDP, declined by 1.6% in 2024 as economy expanded by 2.9% in real terms, Fitch Ratings said in a note,
As the world economy expanded, carbon emissions also rose by 1.2% in the same period but at a slow pace compared with GDP growth.
The pace of decarbonisation is being held back by the growing share in world GDP of emerging markets – which are far more carbon intensive – and recently by a slowdown in improvements in global energy efficiency.
With world GDP expected to grow by more than 2.5% a year in the next few years, the pace of decarbonisation would need to roughly double from recent rates to ensure that global carbon emissions start to fall.
Fitch said the carbon intensity of GDP can be decomposed into the energy intensity of GDP (energy consumption/GDP) and the carbon intensity of energy (CO2/energy consumption).
Most of the fall in CO2/GDP since the 1960s is because of falling energy intensity, but CO2/energy has been falling more quickly since 2010.
However, energy/GDP hardly fell last year as energy consumption growth rose to 2.8%. This reflected extreme weather, rapid growth in energy-intensive data centres related to the AI boom and a rebound in energy consumption in Europe as energy prices fell from earlier highs.
The rising share of emerging markets in world GDP is also constraining the global pace of decarbonisation. Emerging markets now account for all the growth in CO2 emissions. Developed market emissions have been falling steadily since 2007 and are now back to where they were in 1970.
Fitch said emerging markets are much more carbon intensive than developed economies, accounting for 42% of world GDP in 2024 but 65% of world energy consumption and 70% of global emissions.
The rising share of emerging markets in global GDP is therefore slowing the pace of global decarbonisation, even as the CO2/GDP ratio in emerging markets falls. Nigeria’s External Reserves Provide 11-Month Import Cover – CBN
