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

Russia’s invasion of Ukraine, the ensuing global energy crisis, soaring inflation, and continued travel demand are converging to point to US greenhouse gas emissions rising again by 2022, according to a new analysis from research firm Rhodium Group. This puts the U.S. further away from its climate goals, but the country now has new policy tools to curb emissions.

Emissions increased by 1.3 percent compared to 2021, marking the second year in a row, but the rate of increase is slowing. Overall carbon dioxide output is also below 2019 levels, before the Covid-19 pandemic. Renewable energy now includes more power plants than coal. And transportation – airplanes, trains, and cars – is again the biggest climate polluting sector.

There are several ways to read this. On the one hand, it’s troubling that emissions are rising in a year filled with reminders of what could happen as average temperatures continue to rise. For the US, time is running out to meet its change targets. In 2021, President Joe Biden committed to reducing US greenhouse gas emissions in half from 2005 levels by 2030, just seven years away.

But on the other hand, when emissions increased last year, the economy grew by a larger margin. One forecast reports that US gross domestic product will increase by 1.9 percent in 2022 compared to 2021. US GDP is now higher than before the pandemic. This exclusion of greenhouse gas emissions from economic growth shows that countries can progress without having to increase their consumption of fossil fuels. More than 30 countries, including the US, have been able to remove their economies from emissions in recent years, and 2022 continues the trend.

Rhodium Group

The US, the world’s largest historical emitter of greenhouse gases, can still do more to bend the curve. Even as clean technologies improve and become cheaper, the U.S. still needs stronger policies to meet its climate goals.

What causes US greenhouse gas emissions?

While 2022 is a tumultuous year, the upheaval will not be enough to break the inertia of the US energy sector. Coal, the dirtiest source of energy, is dwindling over time, while renewable energy sources like wind and solar power are better and more expensive than ever. Last year, renewables surpassed coal, providing 22 percent of US electricity generation compared to 20 percent for coal.

Demand for natural gas also increased last year despite higher prices, but its market share was still smaller than in 2019.

Rhodium Group

With pandemic restrictions relaxed, demand for transport will increase in 2022, and with it, demand for fuel. “The biggest thing we’re seeing is people returning to airplanes all year,” said Ben King, an associate director at the Rhodium Group who wrote the emissions analysis.

The surge in fuel prices, however, tempered some of this growth.

Rhodium Group

Americans also drive more. Sales of electric vehicles continue to set new records. Automakers sell more than 800,000 EVs in the U.S. in 2022, increasing to 5.8 percent of all vehicles sold in the country, compared to 3.2 percent in 2021. However, gasoline and diesel still dominate the road, and America’s desire for cars that greater has offset many improvements in efficiency. SUVs consume about 20 percent more energy than midsize cars.

This year, the US has several new opportunities to reduce greenhouse gas emissions. With the Inflationary Reduction Act in effect, the U.S. will have $369 billion to spend on cleaner energy. It is the largest single climate change investment in US history, funding battery factories, solar panels, and tax credits for EVs. All this means accelerating decarbonisation and reducing emissions. “I think something like the Inflation Reduction Act might help juice it up a little bit,” King said.

However, with the House now in Republican control, the White House will have a harder time getting the climate agenda through Congress, leaving executive action, agency regulations, and states as the biggest levers of US climate policy. For example, the Environmental Protection Agency is proposing new rules to reduce pollution from power plants. States like California and New York plan to end sales of fossil fuel-powered cars 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 decarbonizing transportation.

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