Global fossil fuel carbon emissions are projected to rise to a record high of 37.4 GtCO2 in 2024, up by 0.8% from 2023—China and the U.S. are top emitters. Amid concerns that the window to achieve Paris Agreement targets is fast closing, climate finance flows surpassed $1.5 trillion in 2023, led by significant increases in renewable energy and low-carbon technology.

COP29 marked a major milestone with the decision to operationalize the Article 6.4 mechanism, establishing a UN-supervised global voluntary carbon market—expected to boost demand and issuance of carbon credits.

After a sharp decline in Q1 2024, global ESG fund flows registered modest improvement in Q2, though U.S. ESG funds continue to experience outflows. As energy become a major national security theme for major economies, strong growth in clean energy investment is anticipated in 2024 and beyond, driven by national industrial policies such as the U.S. Inflation Act (IRA), the EU Green Deal and similar incentive schemes around the world.

Despite a decline in carbon credit issuance (supply) in 2022-23 as market standards took shape, carbon credit retirements (an indicator of demand) have remained broadly stable.

2024 is poised for strong growth in clean energy investment, with continued support from the U.S. Inflation Reduction Act (IRA), the EU Green Deal, and similar incentive schemes around the world.

Demand for voluntary carbon credits has continued to pick up in 2024, with year-to-date retirement levels reaching record highs. However, new supply has not kept pace—issuance in voluntary carbon markets has remained on par with levels seen in 2022-23, well below the record high levels seen in 2021.