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. These outlooks are limited by the following features:
- Single, deterministic scenarios: Most outlooks report outcomes under a single scenario (or set of scenarios) that are based on deterministic input assumptions for key variables that are, in reality, highly uncertain. The pace of economic growth, for example, is one of the most important drivers of emissions growth, yet most outlooks rely on a single deterministic GDP projection. Other important uncertainties that drive emissions include population growth, fuel prices, clean technology costs, and the pace of learning for emerging decarbonization technologies.
- Policy scenarios untethered to reality: Because of the inherent uncertainty in how policy will evolve over time, modelers are left to construct stylized emission projections that follow one of two possible policy stories: 1) countries keep policies in place today, but there is no further evolution of policy beyond that; or 2) countries fully implement the pledges they have announced, whether their near-term NDCs under the Paris Agreement, mid-century net-zero emissions targets, or global emissions scenarios consistent with keeping temperature rise below 1.5°C. The reality is likely somewhere in between those two extreme policy stories. The range of 2035 NDCs submitted to date by countries under the Paris Agreement illustrates this point well, especially when you consider the world’s two largest emitters: China and the US. The US under the Biden administration submitted a very ambitious NDC in January 2025 that the current Trump administration has disavowed, and is therefore a gross overestimate of US emission reductions over the coming decade. On the other hand, China took a conservative approach, setting 2035 targets that many experts assess as less ambitious than the likely pace of clean energy deployment and pace of emission reductions. As a result, scenarios that show global emission reductions consistent with 2035 NDCs will not provide useful information about what path the world is likely to take in the coming decade.
- Partial emissions picture: The majority of outlooks have focused to date on the energy transition, reporting emissions of carbon dioxide (CO2) from energy combustion. But energy CO2 contributes only two-thirds of global greenhouse gas emissions. The rest is emitted as methane (CH4) from oil and gas production, agriculture and waste; nitrous oxides (N2O) from agricultural production; hydrofluorocarbons (HFCs) and other fluorinated gases used in refrigeration, cooling, and industrial uses; and CO2 from industrial processes, forests, and other land uses. Without an integrated understanding of the potential trajectory of emissions of the other third of GHGs, we are left with only a partial picture of what we are on track for.
- No integrated temperature rise outcomes: Other available emissions scenarios project out to 2030 or 2050—the edge of known or announced policy pledges. This makes it impossible to provide an integrated set of global temperature rise projections, which require annual data through at least the end of the century. As a result, other modeling efforts do their best to align their 2030 (or 2050) projections with aggregate, global long-term emissions scenarios developed by other groups. This introduces cross-model structure and assumption inconsistency and provides limited information about what geographic, sectoral, or technological developments are most important in shaping global temperature outcomes.
Rhodium Climate Outlook
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.
The Rhodium Climate Outlook (RCO) is produced using an integrated modeling platform that combines these critical features: Rhodium’s Global Energy Model (RHG-GEM). RHG-GEM captures uncertainty in economic and population growth, coal, oil, and natural gas prices, and clean energy technology costs under likely policy evolution (see the Technical Appendix for more detail).
The result is our RCO Baseline, which provides probabilistic GHG emissions and energy outcome ranges based on the most up-to-date outlook for key drivers through the end of the century. This RCO Baseline illustrates what the world is likely on track for, absent a major acceleration in the pace of climate policy ambition or accelerated innovation and investment in emerging technologies beyond their current trajectory. It is the starting point for assessing what additional action is needed to go above and beyond what the world is already on track to achieve, and specifically:
- What regions and sectors of the economy are making the most progress in the clean energy, low-GHG transition, and what are the potential barriers to further progress;
- Which regions and sectors are falling behind, and where is an acceleration of policy, investment, and deployment most needed;
- Where expected cost reductions in mature clean technologies don’t go far enough to deploy at scale in regions with slow-to-evolve climate policy;
- How the emergence of new technologies that are nearing maturity can further reduce emissions; and
- Where additional technology innovation is most needed, and where new technologies would have the largest impact on future GHG emissions.
In the full report, we provide an overview of the results of the 2025 Rhodium Climate Outlook, including a deeper dive into the regional and sectoral dynamics.