Global Carbon Emissions Are on the Rise Again

IMF Blog, December 5, 2019

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After good progress in the beginning of the decade, global carbon emissions have started to pick up again.
Emissions increased by 1 percent in 2017 and another 2 percent in 2018.
This recent trend sets the world on a dangerous path: to slow the pace of climate change, carbon emissions need to be reduced.

Total carbon emissions growth can be decomposed as the sum of:
- growth in carbon intensity (carbon emissions per unit of energy),
- energy intensity (energy use per unit of GDP),
- GDP per capita, and
- population.
Declines in energy intensity and carbon intensity have consistently helped reduce the growth of carbon emissions over the past 5 years.
In 2018, the contribution of energy intensity to that reduction was lower, possibly because of a cyclical pickup in global industrial production.
These weaker contributions could not offset the increase in carbon emissions stemming from population and, especially, global per capita income growth—which picked up in 2017 and 2018.
The decline in carbon intensity in 2018 was larger than in previous years, as wind, solar, and natural gas continued to slowly replace coal in major emitters’ power sectors.

China has been a key driver of emission growth since the turn of the century, but its impact has diminished in recent years as:
- investments in renewable energy have increased, and
- economic growth has become more rooted in the service sector rather than manufacturing.
India and other emerging markets are partially filling the gap left by China's diminishing impact.
In 2018, emissions decreased in all Group of Seven economies besides the United States, whose emissions increased because of a resurgence of industrial production and, possibly, bad weather.

Policymakers should continue to adopt policies aimed at curbing the appetite for coal and other polluting fossil fuels.
Increasing the price of carbon emissions would accelerate the ongoing energy transition toward low-carbon energy sources.
Subsidies for research and development would improve energy efficiency.

Emissions growth: "1 percent in 2017" and "2 percent in 2018".
Timeframe referenced for intensity trends: "the past 5 years".
Years highlighted for per capita income pickup: "2017 and 2018".
Regional group referenced: "Group of Seven" and specific country: "United States".
Major economies noted: "China" and "India".

Source: Christian Bogmans, Akito Matsumoto, Andrea Pescatori — December 5, 2019