The need to understand what kind of climate future the world is on track for has become increasingly important not just for diplomats and policymakers, but to almost every actor of the global economy. The newly launched Rhodium Climate Outlook strives to provide this kind of information, with detailed probabilistic projections of how the global energy transition, greenhouse gas emissions, and temperatures are likely to evolve given current policy and technology trends, but absent a major acceleration in climate policy and clean technology innovation.

The world is very likely on track to exceed 2°C above pre-industrial levels, but we’ve avoided the most catastrophic projections.

Shortly before the Paris Agreement was adopted in 2015, the Intergovernmental Panel on Climate Change (IPCC) estimated that without additional efforts to reduce emissions, global temperatures would increase between 2.5 and 7.8°C (very likely range, i.e. 90% confidence interval) by the end of the century. Policy and technological progress over the past eight years has significantly reduced the global temperature outlook.

We now project very likely temperature increases of 2.0 to 4.0°C by century’s end, with a 2.3 to 3.4°C likely range (67% confidence interval) and a mean of 2.8°C. While this is progress from just eight years ago, it still represents a dire climate future—falling significantly short of the Paris Agreement goal of limiting warming to well below 2°C.

The world has made progress in decarbonizing electricity and vehicles, but current technology has its limits.

Thanks to several decades of policy and innovation, the world has made considerable progress in decarbonizing the electric power sector. These trends are expected to continue, with emissions from power declining through mid-century. But momentum bottoms out after mid-century as variable renewable energy technologies like wind and solar plateau, and as global demand for more power increases.

The same story is true in the transportation sector. With the growing transition to electric vehicles, transportation sector emissions likely peak in the coming decade and fall through mid-century. But while the rapid deployment of existing technologies helps decarbonize the majority of road transport, it doesn’t decarbonize the last quarter of emissions. This is due in large part to an increase in global demand for transportation—including both passenger and freight—which rise significantly over the coming decades.

However, as the electricity and transport sectors decarbonize, the industrial sector becomes the largest challenge.

We see a greater than 50% chance that emissions from the industrial sector—including production of iron, steel, cement, oil and gas, and chemicals—rise over the coming decades as demand for industrial products grows without widely available, cheap decarbonization solutions, offsetting the progress achieved in power and road transportation.

By 2050, industry consumes more fossil fuel than power generation, and emits more GHGs than power, transport, and buildings combined (projection mean). By century’s end, industrial emissions grow to three times the level of emissions from either electricity generation or transportation (projection mean).

Getting below 2°C will require making clean energy cheap beyond the OECD and China.

Emissions from OECD countries and China—today’s highest emitters—are very likely to decline significantly through mid-century, thanks in part to decades of policy and investments that have brought down the costs of renewable electricity and electric vehicle batteries, positioning these technologies to scale rapidly in the years ahead.

The bulk of emissions growth in the future, however, will come from other emerging markets—particularly India and other non-OECD countries in Asia, the Middle East, and Africa—driven by economic growth and rising industrial production.

Keeping the increase in global temperatures below 2°C will require investing in the deployment of mature clean energy technologies in these regions, and a significant acceleration of policy and innovation to drive down the cost of emerging clean technologies required to decarbonize hard-to-abate sectors—like industry, shipping, and aviation—to make those solutions affordable for all regions to adopt at scale.

Fossil fuel use likely peaks this decade, but not for long.

Global fossil fuel consumption—including coal, natural gas, and oil—is likely to peak this decade thanks to progress in decarbonizing power and passenger vehicles. However we find a greater than 83% chance that fossil fuel consumption plateaus after 2060, remaining stubbornly high at more than 60% of today’s levels.

Without a significant acceleration in policy and clean energy innovation, there is a greater than 50% chance that fossil fuel consumption begins to rise again after mid-century, driven largely by a rise in natural gas demand, a slowing reduction of coal use in industry, and a rebound in oil consumption to meet global aviation, shipping, and plastic demand.