Global energy-related carbon dioxide (CO2) emissions rise through 2050 in the IEO2021 Reference case, largely driven by non-OECD countries where 2050 emissions increase by 35% over 2020 levels, compared with a 5% emissions growth in OECD countries. Energy-related CO2 emissions tend to follow GDP and population growth, which typically correlate with increasing energy demand. However, changes in the fuel mix and energy efficiency directly affect the degree to which emissions correlate with energy consumption.
Carbon intensity and energy intensity are two useful indicators of the relationship between energy consumption, emissions, and economic activity. Carbon intensity (carbon emitted per unit of energy consumed) is largely determined by a region’s fuel mix, and it decreases in both OECD and non-OECD countries in the Reference case over the projection period. Larger declines occur in non-OECD Asia because of an increasing share of renewable energy as well as technological efficiency improvements. However, the average carbon intensity across non-OECD countries remains higher than that of OECD countries through 2050, mainly because of a higher retention of fossil fuels—particularly coal, which has a higher carbon content than other fuels. On average, the share of electricity derived from coal across non-OECD countries is more than twice that of OECD countries over the projection period.
Energy intensity—defined here as economy-wide energy consumed per dollar of GDP—also declines globally through 2050, and non-OECD countries experience the fastest reductions. Although energy consumption (the numerator of energy intensity) is reduced because of energy efficiency gains, steeper increases in non-OECD GDP (the denominator of energy intensity) are largely driving the falling energy intensity in these regions, especially in the near to mid term. Energy intensity between OECD and non-OECD countries becomes more comparable in the latter years of the projection period because technology use becomes more aligned as regional economic composition changes.
Total energy-related CO2 emissions increase in both OECD and non-OECD regions through 2050 in the IEO2021 Reference case. The Reference case represents an assessment of current laws and policies, including those directed at reducing CO2 emissions. Mandated efficiency, fuel, and technology goals are generally more prevalent in OECD countries. We project that net CO2 emissions across OECD countries increase by 175 million metric tons between 2020 and 2035 and then increase by over 400 million metric tons between 2035 and 2050 because, under existing laws and regulations, government climate policies do not explicitly increase in stringency after 2030. More information on how we model climate policies is available in our companion article, Climate Considerations in the International Energy Outlook (IEO2021)
Energy-related CO2 emissions grow much more rapidly in non-OECD countries, largely as a result of increases in energy demand associated with population and economic growth. Net CO2 emissions across non-OECD countries increase by 4,200 million metric tons between 2020 and 2035, followed by a 3,700 million metric tons increase between 2035 and 2050. The relatively slower emissions growth in the second half of the projection period is largely linked to increases in renewable energy and energy efficiency.
Emerging policy directives that are not law, such as commitments made by China’s government in 2020 to achieve carbon-neutral status by 2060, could contribute to lower emissions in the region, but we do not include them in the Reference case because they are not specific policies.
Growth in heavy industries—such as basic chemicals, non-metallic minerals, and steel—is a major component of overall economic growth in non-OECD economies because of the rapid expansion of physical assets and infrastructure. Energy-intensive manufacturing is difficult to decarbonize without major restructuring.
The strong growth in heavy industries in non-OECD countries generally outpaces incremental energy efficiency improvements, leading to higher emissions in the IEO2021 Reference case. As an example, the basic chemicals industry, which has the majority of its gross output in non-OECD countries, uses a high amount of natural gas and petroleum liquid feedstock. Reducing carbon intensity and emissions in this industry would require either a major structural shift in the production process or a shift to a more circular economy that relies less on commodity chemicals.
Similarly, the non-metallic minerals and steel industries rely heavily on coal. Incremental energy efficiency improvements in these industries would require difficult and costly structural changes, such as employing more recycling or material substitution.
India exemplifies the role that heavy industries play in non-OECD emission trends. India’s industrial sector is its largest consumer of coal, and the country’s coal emissions more than double over the projection period.
In the IEO2021 Reference case, increased economic activity, population, and private mobility—following the pandemic-related economic downturn in 2020—increase the existing global light-duty vehicle fleet through 2050. Rapid GDP per capita growth in some regions causes their LDV fleet to grow more quickly than population. Non-OECD regions— particularly China, India, and Other non-OECD Asia—will account for most of the growth, and the non-OECD LDV fleet will surpass that of OECD in 2026. We project the non-OECD motorization rate to grow significantly from 92 vehicles per thousand people in 2020 to 173 vehicles per thousand people in 2050. We also expect ownership rates in the OECD regions to remain relatively flat, from 527 vehicles per thousand people to 533 vehicles per thousand people, over the same period.
The 2020 global LDV fleet primarily consists of conventional gasoline and diesel internal combustion engine vehicles, but sales of electric vehicles (EVs) grow in IEO2021. Recent technology and policy developments for alternative powered vehicles accelerate the growth in plug-in electric vehicle sales. In the IEO2021 Reference case, plug-in electric vehicles include both full battery electric vehicles (or all-electric vehicles) and plug-in hybrid electric vehicles that run on liquid fuels when batteries become depleted. The plug-in electric vehicle share of sales grows most quickly in OECD Europe, where we project that about 80% of passenger LDV sales in 2050 will be plug-in electric vehicles. We also expect OECD Europe to experience high plug-in electric vehicle penetration as a result of policies that encourage or require electric vehicle sales, including current EU fuel economy standards; country-level incentives that bring electric vehicle cost nearer to ICE cost-parity; and target dates for ICE new vehicle registration or sales bans.
We project that electric vehicles will account for 31% of the global LDV fleet in 2050 and have fleet shares of 34% in OECD and 28% in non-OECD. Significant growth in electric vehicle sales and their share of sales throughout the projection period causes the ICE fleet to peak in 2023 for OECD regions and in 2038 globally. Continued electric vehicle sales growth in non-OECD countries slows ICE stock growth in those countries.
Internal combustion engines will peak in 2023 for OECD regions and in 2038 globally.