S&P: Carbon Emissions to Hit Record High in 2022, In Spite of COP26 Pledges

Emmanuel Addeh

Carbon emissions will hit record high in 2022 even with greater focus on climate change and the emissions policy remaining on the ballot in key markets, S&P Global Platts Analytics has predicted.

In spite of the focus on emissions reductions and a lengthening list of countries that have made net-zero targets, the firm noted that it expects that CO2 emissions from energy combustion will increase by 2.5 per cent in 2022 to new record levels.

While leaders at COP26 pledged to strengthen 2030 emissions targets by the end of 2022 rather than waiting for the formal “stock taking” process, there are significant risks to domestic environmental policy agendas from elections in 2022.

President Muhammadu Buhari had also at the Glasgow event promised that Nigeria will by 2060 fully meet its net zero obligations, although Nigeria still depends on fossil fuels for export and domestic uses.

During COP26, 100 countries committed to 30 per cent reduction in methane emissions by 2030 (with some notable exceptions), which will likely bolster interest in better understanding fossil fuels and their associated upstream carbon intensities.

But the matter has become political, economic and environmental, with for instance, the report stating that midterm elections in the US have the potential to affect significantly the Joe Biden administration’s environmental agenda.
In Australia, it stated that focus is on the opposition party and whether a prioritisation of more aggressive environmental targets will win political and popular support.

Such elections, it noted, are reminders that “all politics are local” and the fate of global agreements often get determined by domestic elections, local public sentiment, and local policy shifts.

According to the group, events in 2021 have exposed significant hurdles governments and markets still need to overcome during the energy transition journey, but there were also signs of progress.

The rapid return of global energy demand to near or above pre-pandemic levels in 2021, it explained, caught markets off guard, which resulted in record-high energy prices in major markets.

“Despite the historic decline in CO2 emissions in 2020, 2021 showed that energy demand is still structurally outpacing the growth of clean energy supply, requiring the use of more fossil fuels, which means more greenhouse gas emissions,” it said.

But according to S&P Global Platts Analytics, despite the rise in emissions, 2021 marked several instances of progress such as electric vehicle sales reaching a new record and a surge of announced hydrogen projects.

However, 2022 will serve as a litmus test for environmental policy as politicians balance keeping energy prices in check without increasing fossil fuel demand, while setting the road to lower carbon economies.

“It will also be important to monitor if the momentum from 2021 carries into this year for electric vehicles and hydrogen, and how technological innovation evolves, ”the report stated.