September 29, 2023/Fitch Ratings

Global carbon emissions grew by 0.9% in 2022 compared to world GDP growth of 2.7%, Fitch Ratings says in a new dashboard. The link between emissions and GDP weakened compared to 2021 – when both rose by around 6% – but progress is still falling far short of paths consistent with net zero, which requires full decoupling of the two metrics.
 
The carbon intensity of GDP (CO2 emissions per unit of GDP) fell by 1.7% in 2022; a significant improvement from 2021 when this ratio fell by just 0.6%. The 1.7% decline was similar to the rate of progress seen in the 10 years prior to the pandemic.
 
Breaking down the carbon intensity of GDP shows that most of the improvement in 2022 came from a decline in the energy intensity of GDP (primary energy consumption per unit of GDP). World energy consumption grew by just 1.1%, translating to a decline in energy intensity of 1.5%. This marked good progress relative to 2020 and 2021 – when the ratio of energy consumption to GDP only declined by 0.6% a year – and was also an improvement relative to pre-pandemic trends.
 
However, progress in improving the carbon intensity of energy (C02 per unit of energy consumption) has been a lot less impressive. This ratio only fell by 0.2% in 2022, after being unchanged in 2021. The levelling off of this ratio in the last two years is in contrast to a steady, gentle decline in the carbon intensity of energy since 2009.
 
The recent flattening of the global CO2/energy ratio reflects a rise in the carbon intensity of energy consumption in Europe – as energy use switched away from natural gas – and the increased weight of India and Indonesia in global energy consumption. The latter two have a high ratio of C02/energy and their energy consumption is growing faster than the global average.