In October 2024 Goldman Sachs published an updated “Carbonomics” report. It covers new pathways to achieving carbon neutrality. The document presents three global scenarios for limiting warming: 1.5°C, <2.0°C, and 2.0°C. The 2.0°C scenario is considered the most realistic but less ambitious compared to previous models.
This revised model takes into account global changes over the past three years. Key factors include the 2022 energy crisis and increased coal consumption. As a result, global CO2 emissions reached a record 43.2 billion tons in 2023. The 2021 forecasts did not materialize. Instead of the planned 5% reduction, emissions rose by 2.2%.
The main contributors to emissions growth were the energy, transport, and agriculture sectors. Indicators exceeded expectations by an average of 6%. On the other hand, building emissions decreased by 2%, surpassing the previously expected 1% reduction. Low-carbon technologies, including heat pumps, were deployed more rapidly.
In the energy sector, the increase in emissions was unexpected. In 2021 a 5% reduction was forecasted, but instead, there was a 2% increase. Despite the growth in renewable energy capacities such as solar and nuclear, dependence on coal and gas remained high. By 2023 the global capacity of renewable energy exceeded 2,400 GW, higher than the forecasted 2,200 GW. China saw particularly significant growth.
The GS 2024 (2.0°C) scenario aims for carbon neutrality by 2070. This is longer compared to the GS 2021 (<2.0°C) scenario, which projected net zero by 2060. The main reason for the delay was the adaptation of global energy systems to new realities. The increase in gas prices and reduced hydropower generation due to the 2023 drought drove higher coal use.
Goldman Sachs predicts that renewable energy and nuclear power will grow faster. However, the share of wind energy will increase more slowly due to economic difficulties. Complex supply chains and high costs are slowing down wind energy development. At the same time, solar energy will exceed previous forecasts by 60% by 2030.
Unlike previous forecasts, hydrocarbons will maintain a significant role until 2040. Gas will act as a transitional fuel. Its share will remain higher than previously expected. The share of coal, on the contrary, will decrease, but more slowly than projected. Coal use is expected to drop from 28% in 2030 to 4% by 2060.
By 2050 low-emission sources—renewable energy, nuclear plants, and hydrogen—will make up 75% of global power generation. By 2060, this figure will reach 84%. However, the GS 2024 forecast indicates that some developing countries will continue to use coal and gas. As a result, the energy sector will still account for 7% of emissions even after 2060.
The transport sector has also been revised. Electric vehicles (EVs) exceeded 2021 forecasts, thanks to China. In 2023, their share in passenger car sales reached 16% instead of the projected 10%. China became the world leader in EV sales, with a 35% share. By 2030 this figure is expected to reach 80%.
However, in the U.S. and Europe, the adoption of electric vehicles lagged behind. Some manufacturers reported a slowdown in sales due to concerns about driving range and charging infrastructure. Goldman Sachs revised its 2024-2027 expectations for these regions.
Goldman Sachs’ new scenarios show that the path to carbon neutrality is more complex than anticipated. The main challenges include dependence on coal and gas, limited opportunities for rapid shifts in the energy balance, and economic difficulties for new technologies. However, the growth of solar and nuclear energy provides hope for mitigating crisis situations.
Achieving the GS 2.0°C scenario will require approximately $74.6 trillion in investments by 2070. This involves all sectors, including transport, energy infrastructure, and industry. The Goldman Sachs forecast emphasizes the need for accelerated measures to meet global climate commitments.
Prepared by: Alen Serik, expert of the Economy KZ portal
