The streets are otherwise empty - they don't need any data other than there is a car that just left a red light - it will most probably get to the next light in (calculate based on the speed limit) so we can turn the light in time. We typically have sensors in the road so we can detect which lane the car is as it goes through the next (now green) light and so make predictions and turn the next light green (sometimes two lights - one if it goes straight, one if it turns). Sure when there are two cars it becomes more difficult, but even then we can do a lot to time lights so most of them are green if you go straight.
Self driving car technology could be (at great expense) be used on all the cameras in a city to get a better picture of where people are really going and thus turn lights green to cause the least waiting.
Most cars sit at a light burning fuel and thus emitting CO2. Then they use a lot of fuel (read CO2) to get up to speed and at the next light that fuel is turned into heat by the brakes (hybrids can do some recharge, but they are not 100% efficient so there is still a lot of CO2 for no work)