The Net Zero Economy Index is an annual index that measures progress in reducing energy-related CO2 emissions and decarbonizing the economy. The global decarbonization rate in 2023 is just 1.02%, and the world will need to decarbonize 20 times faster to limit warming to 1.5°C above pre-industrial levels.
The possibility of crossing this threshold is rapidly becoming a reality. Just limiting global warming to 2°C, the minimum level targeted by the Paris Agreement, will require fundamental changes to the process with an annual decarbonization rate of 6.9%.
Gradual progress is being made. Renewable energy generation capacity is increasing significantly. However, as demand increases, so does our reliance on fossil fuels, which continue to dominate the energy mix.
Reducing energy intensity and managing demand more effectively creates opportunities for businesses and governments to accelerate the process of decarbonizing their economies. The private sector can take the lead in deploying energy efficiency technologies, adopting circular business models and applying advanced manufacturing processes. Governments can strengthen this effort by aligning public policy and private innovation, an important step towards a secure and sustainable energy future.
The current situation reflects a widening gap between goals and action, and the space for action is rapidly narrowing. Immediate and sustained efforts are essential to turn current progress into significant change. Only in this way can we ensure a sustainable and resilient future for all. The time to act is now.
