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Trade Fact of the Week: U.S. carbon emissions fell by 190 million tons in 2023.

  • March 20, 2024
  • Ed Gresser

FACT: U.S. carbon emissions fell by 190 million tons in 2023.

THE NUMBERS: Energy-related carbon emissions, 2023* –
World total: 37.8 billion tons
Change by country
China: +565 million tons
India: +190 million tons
World: +410 million tons
Japan: -100 million tons
United States: -190 million tons
European Union: -220 million tons

*International Energy Agency, 2024

WHAT THEY MEAN:

As the Biden administration’s energy and climate officials think through January’s “pause” on capacity expansion for the U.S.’ $34 billion in liquefied natural gas exports, some data on emissions trends and their causes:

Statisticians at the International Energy Agency calculate carbon emissions each year. This month they came in with a figure of 37.8 billion tons from energy production in 2023, up 410 million tons from their 37.4 billion ton estimate for 2022.  In a longer-term perspective, these figures compare to 0.2 billion tons in 1850 as Victorian steam, gears, and airships took off; to 6 billion tons in 1950 as the world recovered from the Second World War, and to 25 billion tons in 2000 at the millennium.  So, quite a lot of carbon, and a world a bit further away from “net zero” than it was in 2022. But beneath this overall rise, IEA’s experts reveal intriguing shifts, especially in wealthy countries, and perhaps a sense that change is coming:

“Advanced economy GDP grew 1.7% but emissions fell 4.5%, a record decline outside of a recessionary period. Having fallen by 520 Mt in 2023, emissions [in these ‘advanced’ economies] are now back to their level of fifty years ago. Advanced economy coal demand, driven by evolutions in the G7, is back to the level of around 1900. The 2023 decline in advanced economy emissions was caused by a combination of structural and cyclical factors, including strong renewables deployment, coal-to-gas switching in the US, but also weaker industrial production in some countries, and milder weather.”

The 41 “advanced economies” in IEA’s report are the U.S., Canada, the 27 EU members, the U.K., Switzerland, Norway, Israel, Japan, Korea, Australia, Taiwan, and Hong Kong and Macau, plus a few micro-states like the Vatican and Andorra. Together, the International Monetary Fund says they produce about 60% of world GDP ($60.9 trillion of 2023’s $104.5 trillion). Their 11.0 billion tons of carbon emissions, however, made up less than a third of the world total, and according to the IEA as a group they are back down to the emissions levels of 1973. Moreover, their 550-million-ton aggregate drop in emissions in 2023 came not during a recession or pandemic, but in a year of reasonably strong growth, which suggests a systemic reduction of emissions across the wealthy world rather than a cyclical blip.

The U.S. is a case in point. IEA estimates American emissions at 4.6 billion tons, a decline of 25% from the 6.1 billion-ton peak twenty years ago, and of 190 million tons from 2022’s 4.8 billion.  Per IEA, the largest part of the U.S.’ 2023 decline — 80 million tons, or about 40% of the total reduction — came not from falling output or changeable weather and hydro issues, but from switching from coal-powered electricity to natural gas.

What does this imply elsewhere? Worldwide, by source IEA believes that (on net) 270 million of last year’s 410 million tons of emissions growth, about two-thirds of the total, came from additional burning of coal for power.  Looked at by place, ‘developing Asia’ now produces half of all world carbon emissions, topped by China at 12.6 billion and then India at 3.5 billion; Chinese emissions grew by 565 million tons and India’s by 190 million tons last year.  Here too, at least in China, data suggest ways to reduce emissions.  China’s “emissions intensity” — the amount of carbon released per dollar of economic output — is down from 0.8 kilos of CO2 in 2013 to 0.5 kilos as of 2020 (the date of the last available estimate), which across China’s $18 trillion economy represents a savings of about five billion tons of carbon a year. Both these countries, and “developing Asia” generally, continue to rely heavily on coal-burning, making Asian coal power the largest “driver” of worldwide emissions growth.  IEA’s report therefore underlines the very large Asian opportunity (noted by PPI’s Paul Bledsoe in an August 2022 report) to cut world emissions by substituting gas, nuclear power, and renewables for Asian coal burning.

In sum, reducing emissions is a big task but not a hopeless one. The advanced economies that make up most of the world economy are now visibly succeeding, having (a) cut emissions substantially over the past five years, (b) done so last year during a period of economic growth, and (c) not by impoverishing themselves but through efficiency, switches from dirtier to cleaner fuels, and technological innovation. The large middle-income countries that are now the largest emissions sources can very much do the same. Where infrastructure allows, low-methane natural gas has a significant and useful part in this.

FURTHER READING

The International Energy Agency reports on carbon emissions in 2023 (executive summary with a link to full text).

Policy:

The White House’s “pause.”

PPI analysis & commentary:

Former Congressman Tim Ryan doesn’t mince words on this.

PPI energy and climate expert Elan Sykes outlines a path forward.

… and comments on Department of Energy policy developments.

Background and data:

NOAA summarizes worldwide surface temperature change since 1880.

Our World in Data tracks emissions by country, industry sector, etc.

And the Energy Information Administration’s International Energy Outlook 2023 looks ahead with projections by region and major country through 2050.

And some trade statistics:

Apart from the energy and climate side of gas debates, how large is LNG trade?  Having overtaken Russia and Saudi Arabia in 2021, the U.S. is the world’s largest energy exporter.  Depending on how you split things up, energy has a case for “top U.S. export” at $323 billion last year, which is about 15% of the U.S.’ $3.05 trillion in total goods and services exports. LNG makes up $34 billion of it. A table putting all this in context with some comparisons:

Total U.S. goods and services exports $3.053 trillion
All goods put together $2.051 trillion
All manufacturing $1.600 trillion
Automotive (vehicles & parts) $137 billion
Aircraft & parts $113 billion
Pharmaceuticals & medicines $108 billion
Integrated circuits  $44 billion
Medical devices  $36 billion
All services $1.003 trillion
Intellectual property revenue  $126 billion
Student tuition $40 billion
All energy $323 billion
Liquefied natural gas  $34 billion
All agriculture  $175 billion
Soybeans $28 billion

 

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

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