Public policy is the foundation for the innovation, investment, and deployment that will get the world to net zero. After the 2015 Paris Agreement, ambitious policies to cut carbon pollution from tailpipes and smokestacks–notably in China, Europe, and the U.S.–helped to lower warming projections by a full degree Celsius. Of late, however, the UN’s annual climate summits have mostly stalled. While more than two thirds of global emissions are now covered by countries’ nationally determined contributions, or NDCs, the gap between pledge and policy remains enormous. Bottom line: The world is currently on track for around 2.7° C. of global warming.
Commitments by the world’s three top emitters–the power economies of China, the EU, and the U.S.–make for a mixed picture. Europe remains on track to decarbonize by 2050. While China’s 2025 NDC included its first-ever absolute greenhouse gas emissions reduction target, the country’s latest five-year plan omits hard caps on coal or overall emissions. And the U.S. withdrawal from the Paris Agreement means it has no working climate commitment.
One point of marked progress is the average global price on carbon emissions. Spurred by EU leadership and a meaningful advance by China, the price has more than doubled since 2020 and is close to halfway to our 2035 target of $75 per ton.