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The Illinois Challenge: Balancing Decarbonization with Economic Reality

  • April 21, 2026
  • Neel Brown
  • John Kemp
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A LEGACY OF PRAGMATIC SUCCESS

Historically, Illinois has operated from a position of strength in the energy market with a low-carbon foundation that other states are only beginning to strive toward. However, policies that are aimed at abolishing current dispatchable generation to meet climate goals set in 2021 threaten to undermine the state’s energy and economic successes.

Illinois’ per-person energy consumption is close to the national average (see fig. 1), but greenhouse gas emissions are well below (see fig. 2) thanks to its status as the country’s top generator of nuclear power — the state’s largest source of electricity. Coal use has gradually shrunk; gas overtook it as the second-largest source of power in 2023 (see fig. 3) while wind generation has doubled in just seven years and is on course to move up to third place. Total spending per person on electricity, gas, and gasoline is among the lowest in the country, at almost 12% below average (see fig. 4). Economic output per person is high, and as a result, total energy spending accounts for just 4.7% of state output, more than 16% below average.

Illinois has also been more successful than most other states at lowering emissions in recent decades, cutting them 2.1% per year between 2005 and 2023, compared to 1.2% for the country as a whole. The state achieved this speedy reduction mostly because gas replaced coal-fired generation while its population stayed flat.

Compared to the size of its economy, Illinois’ carbon emissions are now the 18th-lowest in the U.S.; it produced 188 tons for every $1 million of output in 2023 (see fig. 5), down 42% since 2005 after adjusting for inflation, and more than 10% below the national average. Illinois emits much less CO₂ per $1 million of output than other Midwest states, including Minnesota (207 tons), Wisconsin (250 tons), Michigan (255 tons), Ohio (260 tons), Missouri (291 tons), Iowa (337 tons), and Indiana (381 tons). It performs well on this measure thanks to the local dominance of high-value-added, low-energy-use industries such as finance and insurance, as well as significant nuclear output.

Illinois is the country’s fifth-largest electricity generator and exports surplus power to neighboring states. In 2024, it was by far the country’s largest nuclear producer (99 billion kilowatt-hours), well ahead of second-place Pennsylvania (75 billion kWh). Nuclear accounted for more than half of in-state generation. Fossil fuels accounted for 31% of generation in 2023, down from 51% in 2005. Coal generation has been cut by two-thirds, mostly replaced by equal amounts of wind and gas. As a result, its energy mix has the country’s fifth-lowest carbon intensity (see fig. 6). Nonetheless, residual coal generation is among the highest in the country, which explains why Illinois has not made even faster progress reducing emissions.

Read the full report. 

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