US greenhouse gas emissions increased in 2022, but GDP grew faster

Russia’s invasion of Ukraine, the ensuing global energy crisis, rampant inflation and pent-up demand for travel converged to push U.S. greenhouse gas emissions back up in 2022, according to a new analysis from the U.S. Rhodium group research office. This pushes the US further away from its climate goals, but the country now has a new set of policy tools to curb emissions.

Emissions rose 1.3 percent from 2021, the second year in a row of growth, but the rate of increase has slowed. Total CO2 emissions are also still below 2019 levels, before the Covid-19 pandemic. Renewable energy now comprises a larger share of electricity generation than coal. And transport – planes, trains and cars – was again the largest climate-polluting sector.

There are a number of ways to read this. On the one hand, it’s disturbing that emissions are rising in a year filled with relentless reminders of what could happen if average temperatures continue to rise. Time is running out for the US to meet the change goals. In 2021, President Joe Biden pledged to cut U.S. greenhouse gas emissions in half from 2005 levels by 2030, over just seven years.

But on the other hand, while emissions increased last year, the economy grew by an even larger margin. According to one estimate, the gross domestic product of the US is 1.9 percent in 2022 compared to 2021. US GDP is now well above the previous level prior to the pandemic. This decoupling of greenhouse gas emissions from economic growth shows that a country can thrive without increasing its consumption of fossil fuels. More than 30 countries, including the US, have succeeded in decoupling their economies from their emissions in recent years, and this trend will continue in 2022.

Rhodium group

The US, the the world’s largest historical greenhouse gas emitter, could do even more to bend the curve. While clean technologies are improving and becoming cheaper, the US will still need stronger policies to meet its climate goals.

What is driving up US greenhouse gas emissions?

Although 2022 was a tumultuous year, the shocks were not enough to halt the sluggishness of the US energy sector. Coal, the nastiest source of energy, is in long-term decline, while renewable energy sources such as wind and solar are better and more cost-effective than ever. Last year, renewables overtook coal and provided 22 percent of U.S. power generation, compared to 20 percent from coal.

The demand for natural gas also increased last year despite higher prices, but the share was still smaller than in 2019.

Rhodium group

As pandemic restrictions eased, demand for transportation increased in 2022, and with it demand for fuel. “The main thing we saw was people getting back on planes year-round,” said Ben King, an associate director at Rhodium Group who co-authored the emissions analysis.

However, the increase in fuel prices dampened part of this growth.

Rhodium group

Americans too driven more. Electric vehicle sales continued to set new records. Car manufacturers sold over 800,000 electric vehicles in the US in 2022, accounting for 5.8 percent of all vehicles sold in the country, compared to 3.2 percent in 2021. Gasoline and diesel still dominate the roads, however, and America’s desire for larger cars has accounted for much of the improvement lost in efficiency. SUVs consume approx 20 percent more energy than mid-sized cars.

This year, the US has some new options to reduce greenhouse gas emissions. With the Inflation Reduction Act going into effect, the US has $369 billion to pursue cleaner energy. It is the largest single climate change investment in U.S. history, funding battery factories, solar panels and tax credits for electric cars. All this stands for accelerating decarbonization and reducing emissions. “I think things like the Inflation Reduction Act can contribute a little bit to that,” said King.

However, now that the House is under Republican control, it will become more difficult for the White House to get its climate agenda through Congress, leaving executive action, agency and state regulation as the biggest levers of US climate policy. For example the Environmental Protection Agency proposes new rules to reduce pollution from power plants. States like California and New York plan to completely stop fossil fuel car sales by 2035, sending a signal to automakers to build more electric cars and chargers. And on Tuesday, the Biden administration published a national blueprint for carbon-free transport.

So it is still possible to reduce greenhouse gas emissions in the US this year. But it will take deliberate action to ensure the country stays on track.