U.S. Emissions Fell by 2 Percent in 2023, Even as Economy Grew

Collapsing coal use drove a reduction in overall U.S. greenhouse gas emissions, but transportation emissions are still on the rise

In an aerial view, turbines from the Roth Rock wind farm spin on the spine of Backbone Mountain next to the Mettiki Coal processing plant on August 23, 2022 in Oakland, Maryland.

CLIMATEWIRE | U.S. greenhouse gas emissions declined by an estimated 1.9 percent in 2023, the largest drop since the Covid-19 pandemic sent climate pollution plummeting in 2020.

Unlike four years ago, when emissions plunged as Americans parked their cars, factories shut down and airplanes sat idle on runways, the decrease last year came as the economy grew by 2.4 percent. The drop was fueled by falling coal consumption and a mild winter, which resulted in less fossil fuel demand for space heating, according to a report released Tuesday by the Rhodium Group.

Despite the drop, the U.S. faces a steep climb to achieving its climate targets under the Paris climate accord: a 50-52 percent reduction in emissions from 2005 levels by 2030. Last year’s decrease means U.S. emissions are 17.2 percent below 2005 levels.

“A decline in economy-wide emissions is a step in the right direction, but that rate of decline needs to more than triple and sustained at that level every year from 2024 through 2030 in order to meet the US’s climate target under the Paris Agreement of a 50-52% reduction in emissions,” Rhodium said in a note to clients.

The drop in coal consumption continues a longstanding trend dating back more than a decade. It remains the largest structural shift and most consequential source of emissions reductions in the U.S. economy. Coal accounted for 17 percent of U.S. power generation last year, marking its lowest level of electricity production since the Nixon administration. Nuclear power generated more electricity than coal for only the second time in U.S. history, Rhodium said. The only other time that has happened was 2020.

Carbon emissions from coal-fired electricity fell 8 percent last year, and building emissions dropped 4 percent due to a mild winter, resulting in less natural gas, fuel oil and propane used for heating.

But other sectors of the economy remain stubbornly resistant to change.

Transportation emissions were up 1.6 percent last year, propelled by a rebound in jet fuel consumption. Industrial emissions were up 1.2 percent, driven by record-high oil and gas production and prompting an increase in methane emissions associated with leaks, flaring and venting.

Even in the power sector, where coal’s collapse is pushing down overall emissions, there are signs that fossil fuel demand remains robust. Natural gas generation grew twice as fast as renewable generation in 2023.

Rhodium’s projection for a nearly 2 percent decrease across the U.S. economy is less than the 3.4 percent decrease projected by the U.S. Energy Information Administration. That owes in large part in how the two groups account for methane emissions from the oil and gas sector.

Rhodium thinks record oil and gas production led to higher methane emissions in 2023, eroding some of the gains associated with falling coal use. It does think methane emissions will fall over the second half of the decade, as EPA implements new regulations on oil and gas operations.

The group’s findings come as scientists announced that 2023 was officially the hottest year in recorded history. Global temperatures were 1.48 degrees Celsius higher than preindustrial levels, according to the European Union’s Copernicus Climate Change Service.

The Inflation Reduction Act is likely to provide a boost to U.S. carbon-cutting efforts in future years, Rhodium said. Many of the rules needed for distributing the law’s $369 billion in clean energy tax credits were finalized in 2023, it noted.

“It will take years for the full impacts of these pieces of legislation to be seen in emissions outcomes, though early investment data looks promising,” Rhodium said.

Even so, the group said the United States’ climate goals “look ever more challenging.” The country needs to average annual emission reductions of 6.9 percent between 2024 and 2030 to meet its Paris targets.

Reprinted from E&E News with permission from POLITICO, LLC. Copyright 2023. E&E News provides essential news for energy and environment professionals.

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