Today, a decade into implementation of the Paris Agreement, there has already been meaningful decarbonization progress. Renewable electricity and electric vehicle technologies are being deployed at scale around the world, and newer technologies to address some of the hard-to-abate sectors of the economy are ready for commercialization. The global policy environment for clean energy has generally improved, and capital markets have matured to help scale clean technology investment. Progress to date has flattened global greenhouse gas (GHG) emissions but has yet to deliver an absolute decline in emissions.
Understanding what the world and nations are on track for today is a critical starting point for charting a path to where we need to go from here to avoid the worst impacts of climate change. To date, the global community has largely relied on models to project global GHG emissions pathways in order to assess the necessary ambition of global and national emissions pledges and illustrate how the economy would need to adjust to achieve those targets. Now, a much wider array of actors are trying to understand how the economy will transform as the global energy transition continues to unfold and how they can accelerate that progress even further.
Many motivated investors, companies, and policymakers are finding it increasingly challenging, however, to find the signal of where new action and investment can most effectively accelerate the global energy transition. Existing global and regional outlooks for baseline GHG emissions and energy outcomes describe potential future scenarios in which global decarbonization action will either: 1) accelerate to meet global goals; or 2) fail to evolve from today’s dynamics, locking in the current fossil economy for the foreseeable future. These illustrative scenarios require the user to choose their own adventure—based solely on a belief of whether the world will change dramatically or not—when selecting a starting point to assess where additional investment or policy action is needed.
The Rhodium Climate Outlook (RCO) seeks to address these shortcomings with probabilistic energy, emissions, and temperature projections of use to a wide range of global stakeholders. We’ve done this by incorporating the following innovations, which to our knowledge have not been combined in a single modeling platform to date:
Probabilistic global and regional emissions and energy projections that capture uncertainty in economic and population growth, oil and gas prices, and clean energy technology costs.
Econometrically-based policy projections based on real-world evidence of country-level policy drivers to construct a baseline projection of how policy is likely to evolve going forward, absent a major acceleration from current trajectories.
Emissions projections for all greenhouse gases, not just CO2.
Probabilistic temperature projections derived directly from our emissions projections but including climate system uncertainty as well.
In this 2025 edition of the Rhodium Climate Outlook, we find that:
Although we’ve avoided the most catastrophic projections, the world is on track to exceed 2°C of temperature rise.