Clean electricity is driving down US emissions

America’s electrical grid is increasingly powered by renewable energy, and this helped slash the nation’s greenhouse gas emissions last year — even as the wider economy grew, according to new estimates by Rhodium Group.

A record-shattering number of solar power projects and utility-scale battery installations contributed to the drop in U.S. power-sector emissions, which fell by 8 percent in 2023 compared to the previous year, analysts said in a preliminary report released on Wednesday. Renewables helped accelerate the long-term decline of coal-fired electricity generation, which hit a record low last year. Electricity from fossil gas — which emits relatively less CO₂ than coal but is high in methane — also increased substantially.

At the same time, Americans relied less on fossil fuels to heat their homes and offices, owing to last year’s milder-than-average winter. Residential and commercial buildings saw a 4 percent drop in emissions due to shrinking demand for gas, fuel oil and propane. U.S. households are also buying more all-electric heat pumps and bidding farewell to gas-burning furnaces.

For these reasons, ​“In 2023, the U.S. experienced something it hasn’t since before the COVID-19 pandemic: a growing economy paired with shrinking greenhouse gas emissions,” the Rhodium analysts wrote in a research note.

However, rising emissions in the transportation sector, driven by a post-pandemic rebound in jet fuel consumption, served to counter some of those emissions reductions. So, too, did the industrial sector, primarily due to ​“leaking, venting and flaring of methane and CO₂” during the production and transportation of fossil gas and crude oil.

All told, total U.S. greenhouse gas emissions were down 1.9 percent year-over-year — the largest decline in emissions since 2016, excluding the pandemic-related decrease in 2020. The economy, meanwhile, expanded by 2.4 percent over the course of 2023 as consumers and the government increased their spending.

Rhodium’s estimates draw on preliminary economic and energy-activity data. The country won’t likely have the final results until spring 2025, when the Environmental Protection Agency is expected to finalize its annual emissions inventory for 2023.

In the meantime, the U.S. power sector appears poised to continue its downward emissions trajectory into 2024 — even amid persisting financial and logistical challenges that complicate the development of onshore and offshore wind projects, high-voltage transmission lines and other clean energy technologies.

Solar power is expected to be the leading source of growth for U.S. electricity generation in both 2024 and 2025, with 36 gigawatts and 43 GW of new solar capacity projected to come online in those years, respectively, the Energy Information Administration (EIA) said this week. Electricity generation from coal will decline even further in 2024, in part because of higher costs compared with renewables. Gas-fired capacity should hold flat this year.

A good ​“step” toward curbing CO₂, but the U.S. needs a giant leap 

The Rhodium and EIA reports come amid otherwise sobering news about the welfare of the planet: Climate scientists confirmed this week that 2023 broke all records for global temperatures, making it Earth’s warmest year in a century and a half. And, though U.S. emissions dipped last year, global carbon emissions reached record levels in 2023, according to research published in December by the Global Carbon Project.

The overall decline in America’s planet-warming pollution is, for now, ​“a step in the right direction,” the Rhodium analysts wrote.

But the United States will need to scale its renewable energy capacity and reduce its fossil-fuel reliance at a much more rapid pace if it’s going to get anywhere close to meeting the nation’s near-term climate goals. In keeping with the Paris Agreement, the Biden administration has pledged to cut U.S. emissions in half by 2030, relative to 2005 levels.

To meet that target, ​“The U.S. needs to average a 6.9 percent emissions reduction every year from 2024 through 2030 — more than triple the 1.9 percent drop in 2023,” according to Rhodium.

America now has a better shot at achieving those reductions thanks to the Inflation Reduction Act (IRA) and the Bipartisan Infrastructure Law, two policies that are expected to steer hundreds of billions of dollars in public and private funding to build and deploy clean energy technologies.

A 2023 report in Science concluded that, before the IRA passed, the country was on track to reduce emissions by between 25 percent and 31 percent. Today, the United States is poised to cut emissions by 33 percent to 40 percent — still short of Biden’s goal, but closer to the mark than it was before Congress passed the landmark climate law in August 2022.

The power sector is expected to account for much of the IRA-fueled decline in U.S. greenhouse gas emissions. That’s because solar farms and wind power projects will not only replace existing fossil fuel generation — they’ll also provide the clean energy needed to power vehicles, buildings, steel mills and other sectors that are turning to electricity to help decarbonize.

“We’ll be watching to see if the U.S. can sustain and accelerate its 2023 emissions decline in 2024 and beyond,” the Rhodium analysts said.