IEA report shows emissions rising as droughts hit hydropower

Using a wide range of data and analysis, the IEA reported a record level of 37.4 billion tonnes of energy-related CO2 emissions for 2023, an increase of 410 million tonnes, or 1.1 per cent. This represents a smaller increase than 2022, when emissions rose by 490 million tonnes. The full report - CO2 Emissions in 2023 – can be read here.

According to the agency, over 40 per cent of the 2023 increase can be attributed to ‘an exceptional shortfall in hydropower’, driven by extreme droughts in countries including China and the USA. With gaps in hydro generation largely plugged by fossil fuels, emissions inevitably increased. The IEA claims that without the hydro shortfall, CO2 emissions from electricity generation would have declined last year.

In better news, emissions in advanced economies saw a record fall in 2023, coupled with GDP growth. The report found this was driven by a combination of strong renewables deployment, coal-to-gas switching, energy efficiency improvements and softer industrial production. Last year also marked the first time that over half of electricity generation in advanced economies came from low-emissions sources like renewables and nuclear.

“The clean energy transition has undergone a series of stress tests in the last five years – and it has demonstrated its resilience,” said Fatih Birol, IEA executive director. “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. 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.”

The IEA’s Clean Energy Market Monitor shows that clean energy deployment remains overly concentrated in advanced economies and China. In 2023, 90 per cent of new solar PV and wind power plants were sited there, alongside 95 per cent of EV sales.

Elsewhere, other clean energy technologies stalled somewhat in 2023. Heat pump sales fell marginally as the cost-of-living crisis squeezed household budgets, highlighting the importance of continued policy support for the net zero transition.