Fitch Ratings warns on 'global economy': Decarbonization in the world economy is progressing too slowly

According to Fitch Ratings' analysis titled "Economic Indicator: The Rate of Global GDP Decarbonization is Still Too Slow," while no reduction has been achieved in the carbon intensity of developing economies, these countries' share in global energy consumption has increased.

Global economic growth was 2.9 percent in 2023, while the increase in carbon emissions was calculated at 1.8 percent. The ratio of emissions to global gross domestic product (GDP) showed a decline of only 1 percent, a rate that remains at the same level as the average decline over the last 25 years. However, to reach net-zero emissions by 2050, the decline in the ratio of emissions to global GDP needs to be at an annual rate of 8 percent.

Last year, emissions in advanced countries fell by 4.2 percent while their economies grew by 1.8 percent. Emissions in advanced economies have fallen to their lowest level since 1970. Most of this improvement stemmed from energy efficiency, while the carbon intensity of energy consumption also decreased steadily.

However, no progress has been recorded in the decarbonization of developing economies. The economies and carbon emissions of these countries increased at the same rate of 4.7 percent, marking the worst performance of the last 10 years. The share of these countries in global energy consumption rose to 64 percent in 2023.

One of the reasons for the weak performance in developing economies was identified as the lack of sufficient investment in clean energy projects, particularly in countries other than China. Most of the recent growth in global clean energy investments has been seen in advanced economies and China.

News Source: 12punto