Featured in Carbon Risk: The carbon abatement return on investment

Uncertainty over the future demands from AI and datacentres notwithstanding, energy consumption per person tends to flatten out once incomes reach $25-30k. For many advanced economies reaching this stage, including those in Western Europe and the United States, carbon emissions are also likely to have decoupled from economic growth, or at least begun to do so.

In contrast, as the chart below illustrates, emerging markets (EMs) are on the precipice of entering the ‘energy growth zone’, the steepest part of the S-curve in which rising incomes coincide with a large increase in energy consumption. If these same countries rely on fossil fuels to support the growth in energy demand its clear that carbon emissions will rise sharply. To avoid the risk that fossil fuels become locked in for decades to come, it’s imperative that renewable energy is the foundation upon which future EM energy growth is built.

Source: ASR Ltd.

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