S&P Global Study Finds Emerging Market Energy Demand Growth Challenges 1.5C Climate Target

On September 17, 2026, S&P Global released a comprehensive structural analysis of the global energy transition, concluding that the 1.5-degree Celsius climate target is no longer mathematically or infrastructurally feasible. The "Multidimensional Global Energy Pathways" study models the physical realities of power grids, capital costs, and resource endowments across 190 countries. It finds that the rapid industrialization and urbanization of emerging markets and developing economies (EMDEs) will fundamentally alter the trajectory of global energy consumption over the next three decades.[5]

The core mechanism driving this shift is a divergence in demand geography. While primary energy demand across advanced economies and China is projected to remain broadly flat through 2060—even accounting for the electrical load added by artificial intelligence and data centers—demand from EMDEs is expected to surge. The study projects that energy requirements in these developing nations will increase by more than 60 percent by 2060.[2][5]

In absolute terms, that growth represents the addition of 155 exajoules to the global primary energy system. This expansion is roughly equivalent to integrating the current total energy consumption of China into the existing global grid. Because this demand is driven by fundamental economic development and rising incomes, it cannot be deferred while waiting for low-carbon technologies to achieve price parity with legacy systems.[1][3]

Consequently, the transition in these regions will be characterized by expansion rather than mere substitution. A significant portion of new low-carbon supply will be deployed alongside existing fossil fuel infrastructure, rather than replacing it outright. The analysis indicates that hydrocarbons remain structurally embedded in the global system; even under the study's most aggressive decarbonization scenario, upstream oil and gas operations will require more than $11 trillion in capital investment through 2060.[2][3]

This structural reality forces a recalibration of international climate objectives. S&P Global researchers note that while limiting global temperature rise to 2 degrees Celsius by the end of the century remains technically possible, it requires an unprecedented mobilization of capital and manufacturing. Under the "Emissions Reduction Pathway," global solar and wind generation capacity would need to increase eightfold, with an 18-fold expansion specifically within EMDEs.[2][5]

That aggressive pathway also demands a 25-fold increase in global grid battery capacity and approximately $50 trillion in capital investment for power generation, storage, and transmission infrastructure. Without that level of intervention, the study's "Current Realities Pathway"—which models the trajectory based on existing policy environments—projects that global greenhouse gas emissions will decline by only 17 percent by 2060, leading to 2.8 degrees Celsius of warming.[2][5]

The findings highlight a growing tension between the emissions reduction priorities of advanced economies and the energy security imperatives of developing nations. Representatives from the Energy for Growth Hub have pointed out that rising energy demand in less advanced economies is fundamentally a positive indicator of human development and poverty reduction. However, meeting that demand currently relies heavily on hydrocarbons, particularly for transportation and heavy industry.[1]

The report signals a shift away from uniform global transition templates toward regionally differentiated strategies. “The thinking and policies that have sought to shape the energy transition over the last decade have collided with the realities of economic development, growing energy demand, geopolitics and the pace of technological progress,” commented Daniel Yergin, vice chairman of S&P Global. Future climate frameworks will increasingly need to balance emissions targets against the immediate requirement to finance and build reliable power systems in emerging markets.[2][5]