Explained: how energy-related emissions in advanced economies fell to a 50-year low in 2023

Energy-related carbon dioxide (CO2) emissions in advanced economies fell to a 50-year low on the back of a clean energy boom in 2023, while energy-intensive economic growth pushed emissions up in China and India, according to the International Energy Agency’s annual update on global CO2 emissions. The report, published on Friday, found that global energy-related CO2 emissions hit a record high last year, driven partly by the heightened deployment of hydrocarbons in countries where droughts hampered hydropower production.

What is the current status of energy-related CO2 emissions globally?

Emissions increased by 410 million tonnes, or 1.1%, in 2023, compared with a rise of 490 million tonnes the year before, taking them to a record level of 37.4 billion tonnes, the IEA said in the report, while coal demand in advanced economies fell back to levels not seen since the early 1900s. Without clean energy technologies, the global increase in CO2 emissions in the last five years would have been three times larger, the agency observed.

How did hydropower contribute to a rise in energy-related CO2 emissions?

An exceptional shortfall in hydropower due to extreme droughts in China, the United States and several other economies resulted in more than 40% of the rise in emissions in 2023 – equivalent to 170 million tonnes – as countries turned largely to fossil fuel alternatives to plug the gap, according to the IEA. The rise in emissions was still lower than in 2022 thanks to the expansion of clean energy technologies such as solar, wind and electric vehicles. Had it not been for the unusually low hydropower output, global CO2 emissions from electricity generation would have declined last year, making the overall rise in energy-related emissions significantly smaller, the IEA said.

What drove the record fall in emissions in advanced economies?

Advanced economies saw a record fall in their CO2 emissions in 2023 even as their GDP grew, as per the IEA report, driven by a combination of strong renewables deployment, coal-to-gas switching, energy efficiency improvements and softer industrial production. After falling by around 4.5% in 2023, emissions in advanced economies were lower than they were fifty years ago in 1973 – representing the largest percentage drop in advanced economy emissions outside of a recessionary period.

Nearly two-thirds of the decline in emissions from advanced economies in 2023 occurred in the electricity sector. For the first time in history, electricity generation from renewables and nuclear reached 50% of total generation in advanced economies, with renewables alone accounting for an unprecedented 34% share. Conversely, coal’s share plummeted to an historic low of 17%, the report found.

What is the situation in economies such as China and India?

In China, a historically poor year for hydropower output and the energy-intensive resurgence of the economy after the Covid pandemic led to a spike in emissions, which grew by around 565 million tonnes in 2023. However, China also contributed around 60% of global additions of solar, wind power and electric vehicles in 2023 – it added as much solar PV capacity in 2023 than the entire world did in 2022.

In India, a strong post-pandemic recovery and GDP growth similarly drove up emissions by around 190 million tonnes in 2023, undercut further by a weak monsoon that increased demand for electricity and cut hydropower production. This accounted for nearly 25% of the increase in India’s total emissions although per capita emissions in the country still remain far below the global average.

How has the growth of clean energy technologies helped curb emissions?

The new IEA analysis shows that the deployment of clean energy technologies in the past five years has substantially limited the surge in demand for fossil fuels – from 2019 to 2023, growth in clean energy was twice as large as that of fossil fuels, as per the report.

“The clean energy transition has undergone a series of stress tests in the last five years – and it has demonstrated its resilience,” IEA Executive Director Fatih Birol said in a statement. “A pandemic, an energy crisis and geopolitical instability all had the potential to derail efforts to build cleaner and more secure energy systems. Instead, we’ve seen the opposite in many economies. The clean energy transition is continuing apace and reining in emissions – even with global energy demand growing more strongly in 2023 than in 2022,” he said.

Specifically in the case of coal, the deployment of wind and solar PV in electricity systems worldwide since 2019 has been sufficient to avoid an amount of annual coal consumption equivalent to that of India and Indonesia’s electricity sectors combined, the IEA said.

The growing number of electric cars on the roads, accounting for one-in-five new car sales globally in 2023, also played a significant role in keeping oil demand (in terms of energy content) from rising above pre-pandemic levels.

What does this mean for the global pursuit of net zero emissions?

The IEA’s inaugural Clean Energy Market Monitor shows that clean energy deployment remains overly concentrated in advanced economies and China, underscoring the need for coordinated global efforts for further increase in clean energy investment and deployment in emerging and developing economies. At the same time, steep cuts in CO2 emissions will be needed in the coming years if targets to limit the global rise in temperatures to 1.5C is to be met.

“The commitments made by nearly 200 countries at COP28 in Dubai in December show what the world needs to do to put emissions on a downward trajectory. Most importantly, we need far greater efforts to enable emerging and developing economies to ramp up clean energy investment,” Dr Birol said.