Fitch Ratings has issued a warning that the global economy’s decarbonization is progressing at an unsatisfactory pace, according to a report released by the agency, as reported by Reuters. While significant strides have been made among major developed economies, emerging markets are lagging behind in their efforts to reduce emissions.
The report highlights that global CO2 emissions increased by 1.8% last year, contrasting with a 2.9% growth in world gross domestic product (GDP). This led to a slight decline of just over 1% in the emissions-to-GDP ratio, aligning with the average annual reduction observed over the past 25 years.
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However, this decline is far from adequate, as it falls significantly short of the ambitious 8% annual reduction required between 2020 and 2030 to meet net-zero targets by 2050.
Fitch further noted that emissions from ten developed economies have reached their lowest levels since 1970, showcasing the positive progress made in these regions.
In stark contrast, emerging markets collectively failed to make any strides toward decarbonization, with CO2 emissions and GDP among ten emerging markets tracked by Fitch rising by 4.7% last year.
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The report highlights that one key factor contributing to emerging markets’ underperformance is the lack of investment in clean energy projects, particularly in markets outside of China.
This underinvestment poses significant challenges to achieving the necessary emissions reductions.
