Climate Outlook 2025: Navigating Risks, Seizing Opportunities
As we embark on 2025, it’s essential to take stock of our progress in addressing climate change. The past year brought both milestones and warnings, revealing how far we’ve come and how much work remains.
Global climate check: key takeaways from 2024
2024 shattered records as the hottest year in history, with global temperatures breaching the 1.5°C mark above pre-industrial levels. While this exceedance, amplified by El Niño (i.e., cyclical climate phenomenon where warm tropical waters in the Pacific disrupt global weather patterns and cause warming), is temporary and does not signal a breach of the Paris Agreement, it underscores the accelerating impacts of rising greenhouse gas emissions. This milestone was preceded by 2023, which recorded a 1.45°C rise, further illustrating the warming trend. Both these years were significantly hotter than previous years affected by the El Niño event, showing the rising concentration of greenhouse gases in the atmosphere is the main driver.
Beyond rising temperatures, other critical planetary indicators also hit record highs, including ocean acidity, sea-level rise, and deforestation. The human toll was equally severe: the U.S. faced 24 climate disasters costing over $1 billion each, starkly contrasting the annual average of 8.5 events in 1980–2023. Globally, the top ten climate disasters of 2024 cost approximately $230 billion.
Still, 2024 also brought some unprecedented steps in the right direction. Deployment of clean solutions surged, with EVs accounting for 20% of global new car sales and deforestation rates slowing in critical regions like the Amazon. Progress in global renewable energy capacity also reached new heights, with wind and solar energy leading the way.
What could hold back climate action in 2025?
As 2025 unfolds, geopolitical tensions threaten to hinder climate progress. The re-election of Donald Trump raises concerns about the potential rollback of U.S. climate policies, echoing the withdrawal from the Paris Agreement during his previous term. Global conflicts in regions such as Gaza and Ukraine also risk diverting attention from cooperative climate efforts.
Scientific uncertainties remain another hurdle, given we, as a society, still do not fully understand the global climate. One such example that researchers are examining is the effect that lower pollution from cleaner shipping might have on increasing temperatures. Another example is how the cooling effect from increasing albedo (i.e., whitening roofs to make them more reflective) has now been shown to be offset by higher temperatures in neighboring areas where this form of geoengineering is absent.
Seizing the moment: transformative climate solutions for 2025
To provide an answer to these challenges, many exciting opportunities lie ahead of us in 2025.
First, several promising technologies could define 2025:
- Space-based carbon monitoring: The European Space Agency (ESA) will launch satellites to monitor CO₂ emissions, which can distinguish between natural and anthropogenic emissions, thereby enabling greater transparency and accountability.
- Clean energy innovations: Breakthroughs in solar, wind, geothermal, and small modular nuclear reactors (SMRs) drive the transition to a low-carbon economy. These are crucial as energy is the biggest global greenhouse gas emissions source.
- Artificial intelligence: We cannot look at 2025 without discussing the upcoming trend of artificial intelligence (AI). From optimizing energy grids to refining climate models, AI holds transformative potential. However, there are some pitfalls to be mindful of. First, the opportunities mentioned before are at an early stage of development, and the extent of the provided benefits remains unclear. Second, the use of AI is rather resource-intensive (w.r.t. electricity, water, and critical minerals). Third, a possible rebound effect (where efficiency gains brought about by AI lead to increased resource use) potentially limits the long-term benefits of AI-driven climate solutions.
Second, 2025 will be packed with opportunities on the policy front. Arguably, the most important is the deadline for nations to update their Paris Agreement commitments. While current pledges put the world on track for 2.5–2.9°C warming, the third iteration of Nationally Determined Contributions must raise ambitions significantly. However, many other international conferences are coming up in 2025, such as COP16 Biodiversity, the UN Ocean Conference, and COP30. There will also be the Financing for Development conference, which only occurs once every 10 years. This year’s edition is being dubbed as the opportunity to make drastic changes to the international architecture of climate financing. As an answer to climate concerns, potential solutions such as green taxation, carbon pricing, and subsidies will be discussed.
Regarding those solutions, unexpected windfall might come from the anticipated protectionist agenda of the Trump administration. For example, the Foreign Pollution Fee Act assumes that U.S. products are less carbon-intensive than those in countries like China. A carbon tariff would put a price on the extra carbon content of imported products compared to the domestic equivalent. This would level the playing field for the cleaner products in competition with dirtier and cheaper imports. Furthermore, it incentivizes other countries to decarbonize their industries to avoid paying the tariff. Another example is the Farm Bill, which might incentivize forestry or other natural climate solutions. This is important because the atmospheric carbon removal by the aging forests of the U.S. is declining.
Finally, in Europe, major corporations must make their initial disclosures under the European Sustainability Reporting Standards (ESRS) in 2025. These could set a new global standard for corporate climate accountability. As a result, businesses across the globe can benefit from observing how European pioneers adopt and implement these standards, gaining insights into the advantages of identifying, assessing, and addressing sustainability risks.
Shaping tomorrow: navigating the road ahead
Despite the daunting challenges, 2025 presents numerous opportunities to advance the climate agenda. The momentum behind clean technologies and global cooperation offers hope. At Ortelius, we remain dedicated to helping organizations navigate these turbulent yet transformative times. Together, we can tackle the climate crisis with resilience and innovation. For collaboration and insights, reach out to our team – we’re here to help.