The following sections outline a series of factors - both positive and negative - that shaped the change in CO₂ emissions between 2022 and 2023. In summary, the cumulative net impact of these effects accounts for nearly two-thirds of the overall increase in emissions, or around 255 Mt CO₂ of the 410 Mt of observed increase.

Temperatures have significant impacts on energy sector emissions, by affecting energy demand for heating and cooling. 2023 was the hottest year on record. However, 2022 was also marked by extremely high temperatures in major regions with high ownership rates of air conditioning. 2023 was hot globally, but 2022 was hotter or just as hot in the regions accounting for a large share of global energy demand for air conditioning. The increase in emissions from more cooling demand globally in 2023 was therefore relatively small, at around 50 Mt CO₂.

In contrast, 2023 saw much milder winter conditions compared to 2022 in countries with large energy demand for heating, notably the United States and the People’s Republic of China (hereinafter "China"). This significantly reduced energy demand for heating, saving emissions equivalent to 170 Mt CO₂. Globally, considering the net effects of moderately higher energy demand for cooling and much lower energy demand for heating, temperatures reduced emissions by around 120 Mt CO₂ in 2023.

Global hydropower capacity increased by around 20 GW in 2023. Despite this increase, the global generation of hydropower saw a record decline in 2023. This was primarily driven by severe and prolonged droughts that impacted major hydropower regions, exacerbated by the influence of El Niño.

Had the availability of the hydropower plant fleet in 2023 remained consistent with 2022 levels, an additional 200 TWh of electricity would have been generated globally. This would have avoided the emission of around 170 million Mt CO₂ from fossil fuel-based power plants. It would also have meant that electricity sector emissions would have fallen globally in 2023, instead of rising moderately.

China experienced a challenging period of 12 consecutive months of below-average rainfall from the middle of 2022 to the middle of 2023; the deficit was particularly severe during the second half of 2022. Even as rainfall gradually recovered over the course of 2023, additional water inflow was primarily utilised to refill hydro reservoirs rather than for electricity production. This meant that although the worst of the precipitation deficit was seen in the second half of 2022, the impact on hydropower output was only seen in 2023. In 2023, China’s hydropower generation fell around 4.9%, the worst decline in the last twenty years. China’s hydropower generation would have been 125 TWh higher in 2023 if its hydropower fleet availability had been the same as in 2022. China's hydropower shortfall accounted for nearly two-thirds of the global deficit in hydropower generation in 2023.

Southeast Asia and India grappled with warm and dry conditions throughout 2023, a probable consequence of the simultaneous occurrence of El Niño and the positive phase of the Indian Ocean Dipole - the Indian Ocean's counterpart to El Niño – in the second part of the year. India experienced a weakened monsoon season, with August the driest in at least 45 years.

North America also faced significant drought conditions. The influence of El Niño brought about warmer and drier conditions in Canada and the North-West of the United States, where half of the national hydropower capacity is situated. Additionally, unusually warm temperatures in spring accelerated snowmelt in these regions, resulting in a considerable depletion of hydropower resources. As a result, much of Canada grappled with drought conditions, with British Columbia, the second-largest hydropower province in the country, particularly hard-hit by severe drought. In Mexico, severe and prolonged droughts led to a hydro generation shortfall of almost 50% compared to 2022.

In contrast to other regions, 2023 proved to be a robust year for hydropower electricity generation in Europe. The hydropower sector recovered from the drought experienced in 2022, with the water level of hydropower reservoirs back to historical averages in key regions. This recovery enabled European hydropower plants to produce around 45 TWh more electricity compared to 2022.

The effects of Covid-19 on the energy sector are still unwinding, and this process of cyclical recovery back to pre-pandemic levels of transport activity played an important role in driving up emissions in 2023. This is evident in the global aviation sector and in China’s road passenger transport sector.

Total global aviation traffic, measured in revenue passenger kilometres (RPKs), soared by more than 35% in 2023 compared to 2022. Despite this increase, global aviation traffic was still around 6% lower than the pre-pandemic level, due to the persistence of lower levels of international travel. This continued cyclical recovery of global aviation demand resulted in around 140 Mt of extra emissions in 2023.

China relaxed its stringent lockdowns at the beginning of 2023, which led to a huge rebound in passenger transport demand. Highway passenger kilometres surged by around 50% compared to 2022, although they remained substantially below the 2019 level. Total gasoline consumption rose by around 10% in China in 2023 compared to 2022. In contrast to passenger transport, road freight transport activity levels were never as affected by the Covid-19 lockdowns compared to passenger transport. Considering therefore the cyclical recovery of road passenger transport, the reopening in China accounted for around 50 Mt of additional emissions.

In 2022, as the world reeled from the effects of the energy shock, the decrease in energy-intensive industrial production contributed significantly to avoiding emissions. In 2023, this effect was more muted. The output of key energy-intensive goods declined modestly in advanced economies in the aggregate, although there were differences depending on the industrial commodity and regions. We estimate that this pushed down emissions by around 25 Mt.