Corporate America isn't backing Trump on climate - Axios
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Corporate America isn't backing Trump on climate

Rebecca Zisser / Axios

Corporate America is uniting on climate change.

Consumer brands and industrial giants have been supporting government action on climate change for years. In a shift that is changing the debate, the biggest and most important U.S. energy companies are now dropping their resistance to a global climate deal.

Why it matters: Broader corporate backing of global action on climate change is helping push President Trump away from his campaign promise to pull out of the climate deal, which was struck by nearly 200 nations in Paris two years ago to slow the growth of global greenhouse gas emissions.

The consensus in corporate America is the broadest it's been in a decade when in 2007 an official coalition called the U.S. Climate Action Partnership was formed to push for legislation cutting carbon emissions. Though it dissolved a few years later when Congress didn't act, it included members ranging from ConocoPhillips to Caterpillar to utility Duke Energy. There's no official coalition this time, but the collection of companies is even more diverse.

To varying degrees, most major companies producing coal, natural gas and oil either explicitly back sticking with the 2015 climate deal struck in Paris, or they're opting not to lobby against it, a dramatic shift from just a few years ago. They're not necessarily cheering global efforts to address the issue, but the decision not to oppose it has the same effect as tacit backing.

The reasons corporate America is uniting on global climate policy are many and often depend on the products made and how global a company's operations are:

  • Consumer-facing companies like Starbucks and Pepsi, have long prioritized policies to cut carbon emissions because they don't sell products that directly contribute to the problem. They also have more direct interaction with consumers who like to buy from green-minded corporations.
  • Companies that generate electricity have said, for much of the past decade, that they're moving away from coal toward cleaner burning sources of power, including natural gas and renewables. The Edison Electric Institute, the trade association representing investor-owned utilities, held a reception last year honoring the Paris climate deal after its conclusion, even though it officially doesn't have a position on the deal.
  • Companies with huge global footprints, like General Electric and ExxonMobil, know that pulling out of one diplomatic deal can only weaken the U.S. standing on other geopolitical issues, which could hurt their operations around the world.
  • Publicly traded fossil-fuel companies are facing growing calls from their investors to address climate change, or at least to not fight such policies. This is a newer trend that's gained influence over the past couple of years.
  • Major oil companies, like ExxonMobil and Royal Dutch Shell, have increasingly invested in natural gas, which emits 50% less carbon than coal when burned. Companies with big natural gas portfolios will gain with climate policies that accelerate a shift already underway to replace coal with natural gas. ExxonMobil, which bought big natural-gas producer XTO Energy in 2010, sent a letter to the White House in March urging Trump to stay in the deal. That letter followed a tweet by the company's top lobbyist just hours after Trump won the election expressing support for the accord.

Big coal companies remain the most tepid about embracing global efforts on climate change. Nonetheless, U.S. executives know the continued use of coal around the world depends on two things, both which would benefit by staying in a global climate deal: government support for new technologies to burn coal more cleanly and continued U.S. exports of coal. Coal giants Peabody Energy, Arch Coal and Cloud Peak Energy have conveyed this to the White House, according to multiple people familiar with the conversations, and Cloud Peak's CEO, Colin Marshall, sent a letter to Trump about it. Reuters and Politico have had good reports on this development recently.

"It seems absolutely irrational to not at least develop an insurance policy against climate change," Marshall said in an interview with Axios last week. "What if the planet is warming up twice as much as we thought?"

  • The other side: One of the most influential and outspoken outliers is coal producer Murray Energy, whose CEO, Bob Murray, is close to the president. One thing helps explains that company's resistance to the Paris deal: it's privately held, and so it doesn't have to answer to shareholders clamoring for more acknowledgement of climate policy.
To be sure: Trump's EPA is working to get rid of the Obama administration's main commitment to the Paris deal: carbon rules for power plants. Staying in the Paris deal but gutting the main U.S. pledge doesn't leave much meat on the bones, making it easier for more corporations to back it.
What's next: White House officials have said they will make a decision by an end of May meeting of the G-7 nations in Italy whether to stay in the Paris deal.

(Harder Line will be a weekly column by Amy Harder where she offers up informed and unbiased analysis of the energy industry and environmental regulation, along with scoops, trends and exclusive interviews. Look for the column weekly at www.axios.com, and highlighted in the Generate newsletter which you can sign up for here.)

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These truckers are helping Silicon Valley to automate their jobs

Starsky Robotics

Bloomberg Businessweek profiles startup Starsky Robotics, which is using machine learning to train its semi-trailer trucks to one day be completely self-driving. Starsky is earning revenue hauling loads while it tests its self-driving technology, but because its vehicles are still in beta, they are manned by a truck driver and an AI specialist for safety and research purposes.

The arrangement makes for strange bedfellows, as the folks who drive trucks and those in cutting-edge computer science tend to live worlds apart, culturally speaking. But apart from being a sociologically revealing portrait of America in 2017, Starsky's staff might also foreshadow changes to the workplace that will arrive in other industries in the years to come.

  1. Though long-haul employment is plentiful — there are 3.5 million trucker jobs in the U.S. — it's grueling and low-paid work, contributing to turnover rates of 71% a year, according to American Trucking Associations.
  2. Starsky is training drivers to operate trucks remotely, with software that enables monitoring of up to three trailers at a time.
  3. This makes it economical to pay above-market wages for the most reliable workers.
But more efficiency means there won't be room to train every would-be truck driver to monitor the algorithms doing their old job. What's more, labor-backed campaigns to stop companies from adopting and governments from funding self-driving car technologies have begun to sprout in recent months.
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The Economist goes after India’s “nationalist firebrand” PM

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"His reputation as a friend to business rests on his vigorous efforts to help firms out of fixes — finding land for a particular factory, say, or expediting the construction of a power station. But he is not so good at working systematically to sort out the underlying problems holding the economy back."

Why it matters: "Political conditions are about as propitious for reform as they are ever likely to be. ... Modi's admirers paint him as the man who at last unleashed India's potential. In fact, he may go down in history for fluffing India's best shot at rapid, sustained development."

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Trump "tapes" scapegoat: Obama administration

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President Trump told Fox & Friends' Ainsley Earhardt that his original tweet suggesting there could be tapes of his Oval Office conversations with ex-FBI Director James Comey came from concerns that the Obama administration may have been surveilling the White House:

The quote: "You never know what's happening when you see that the Obama administration, and perhaps longer than that, was doing all of unmasking and surveillance and you read all about it... the horrible situation with surveillance all over the place... But when [Comey] found out that I, you know, that there may be tapes out there, whether it's governmental tapes or anything else, and who knows, I think his story may have changed."

  • Should Mueller recuse himself from special counsel? "[H]e's very, very good friends with Comey, which is very bothersome... we'll have to see. I can say that the people that have been hired are all Hillary Clinton supporters... I mean the whole thing is ridiculous."
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Elaine Thompson / AP

Seattle has been the vanguard of the newly energized minimum wage movement, hiking its pay floor from $8.55 in 2010 to between $11 and $15 in 2017. Other cities have followed suits — in all, nine big cities and eight states have passed minimum wages between $12 to $15, depending on the size of the employer and other factors.

Berkeley's Institute for Research on Labor and Employment is out with a new study on the effects of Seattle's wage policies, and found that there was no job loss as a result of the mandate.

How did they do it? They uses an algorithm that tests combinations of different counties across the U.S. to create a "synthetic" Seattle, mirroring its employment and wage characteristics for six years. The only difference is that these counties did not increase their minimum wage.

What they found: There was no negative effect on employment, even up to a wage floor of $13, a much higher level than previous research has studied.

Not so fast: The authors of the study admit that their synthetic Seattle may be failing to reflect important qualities about the real Seattle that could be preventing job loss. The IRLE plans to conduct similar studies in Chicago, Oakland, San Francisco, San Jose and New York City, and elsewhere, which will help respond to this critique.

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Why it matters: U.S. investors want an edge on the development of next-generation technologies that center around AI, including self-driving cars. Other countries such as China are also charging ahead.

Data: PitchBook; Chart: Chris Canipe / Axios

President Trump yesterday told venture capitalists and emerging tech company execs that his administration wants to help "unleash the next generation of technological breakthroughs that will transform our lives and transform our country, and make us number one in this field." The White House gathering was largely focused on drones, 5G wireless technologies and connected devices.

Big bets: AI technologies have also captured the mindshare of the biggest tech companies such as Google, Facebook and Amazon who are investing a lot of research and development resources into machine learning, deep learning and neural networks. AI-related technologies are at the core of emerging systems like self-driving cars. In 2016, there were 322 deals worth a total of $3.6 billion in investment into AI and machine learning companies, compared with only 31 such deals in 2007.

Virtual reality and augmented reality are also attracting investments, but those applications are seen as more narrowly tailored for specific uses, as opposed to the mass adoption potential seen for AI. There were 99 deals worth a total of $1.485 billion in this area in 2016, up from 23 deals in 2007.

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Data: Kaiser Family Foundation Health Tracking Poll; Chart: Lazaro Gamio / Axios

Just 30% of the public likes the American Health Care Act, the House health care bill. (The poll was done before the Senate bill came out.) Meanwhile, the ACA, which has never been loved, is slowly becoming more accepted. It's now favored by 51% of the public — the first time it's topped 51% since Kaiser started polling on it in 2010.

Other highlights:

  • Republicans still support the AHCA, but their support has gotten softer. It's down to 56% (was 67% last month).
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  • Good news for Republicans and Democrats: the public doesn't blame either of you for insurers pulling out of the ACA markets. It blames the insurance companies — four in 10 Americans say the insurers are withdrawing because of profit-driven decisions.
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J. Scott Applewhite / AP

You can read it here, and a summary here. The highlights:

  • Ends the Affordable Care Act's mandates and most of its taxes.
  • Phases out its Medicaid expansion over three years, ending in 2024.
  • Limits Medicaid spending with per capita caps, or block grants for states that choose them. The spending growth rate would become stricter in 2025.
  • States could apply for waivers from many of the insurance regulations — though not protections for people with pre-existing conditions and coverage for young adults.
  • The ACA's tax credits would be kept in place, unlike the House bill — but their value would be reduced.
  • Funds the ACA's cost-sharing subsidies through 2019, but then repeals them.

Want more? Keep reading.

  • There's a stabilization fund to help states strengthen their individual health insurance markets.
    • $15 billion a year in 2018 and 2019, $10 billion a year in 2020 and 2021.
    • There's also a long-term state innovation fund, $62 billion over eight years, to help high-cost and low-income people buy health insurance.
  • The ACA tax credits continue in 2018 and 2019.
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  • All ACA taxes would be repealed except for the "Cadillac tax" for generous plans, which would be delayed.
  • Medicaid spending growth rate under per capita caps would be same as House bill until 2025. Then it switches to the general inflation rate, which is lower than House bill.
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Meanwhile, Democrats and some sources in the corporate sector are speculating that a procedural delay is merely cover by House leaders to slow-walk and ultimately water down the bill.

Not so fast: three House Republican sources involved in the process tell me the House bill is shaping up to look very similar to the Iran-Russia sanctions bill that passed the Senate. And it's likely to move pretty fast. House Speaker Paul Ryan wants tough sanctions on Russia, as does Foreign Affairs Committee chairman Ed Royce, who is driving the process.

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The big question: will President Trump risk using his veto pen on this legislation if it passes as originally written? Most GOP sources I've spoken to doubt it. While Secretary of State Rex Tillerson has said the administration needs more flexibility to over the Russia-Ukraine conflict — and believes the new sanctions package is unhelpful to that end — Trump can't risk getting his veto overridden by Congress. It looks like there'd be more than enough votes to do so, given the Senate voted 98-2 in favor of the original sanctions package.
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What allegedly went down: Originally contacted by a supposed recruiter for a Chinese think tank, Mallory realized he was in contact with Chinese intelligence officials before traveling to Shanghai in March and April. He then provided a Chinese intelligence operative with three documents — one labeled top secret — in May. Around the same time, he wrote his Chinese contact: "Your object is to gain information, and my object is to be paid for it."

The potential consequences: Mallory will have a preliminary hearing this week, but he faces up to life in prison.

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Why we care: The banks weren't prepared for the 2008 financial crisis. Right now they are, according to the Fed. Plus, the stress test will reassure investors.

The test: To see if banks with more than $50 billion in assets have a large enough capital buffer to keep lending in the case of "severely adverse" scenarios resulting in billions of dollars in losses. The next part of the stress testing will be out June 28, and will reveal which banks have "passed" and "failed" their tests.