National

Ominous forecasts about the impact of climate change serve as the backdrop for the world — led by U.S. lawmakers and companies — to debate big action on the problem, which could upend energy systems and our way of life.

Energy & Environment

Chile's centrist candidates were completely shut out in Sunday's first-round vote, which now heads to a runoff election between a far-right and a far-left candidate.

Why it matters: The outcome of the second round of voting on Dec. 19 will have repercussions for an increasingly polarized Chile and how the country's economy, which is supported by key natural resources such as copper, is handled.

The details: Gabriel Boric, a 35-year-old leftist Congress member and former student leader, will face off against José Antonio Kast, an ultraconservative 55-year-old lawyer who has defended Augusto Pinochet's dictatorship.

Kast got 27% of the votes — the most of all candidates — on Sunday.

Boric champions levying more taxes on companies, reforming pensions, and increasing financing and tightening regulations to try to reduce the environmental effects of state-owned mining company, Codelco.

Kast proposes privatizing that company and possibly raising export taxes or output royalties on copper, which could increase the metal’s price.

Chile is the world's largest producer of copper and second-largest of lithium, both key for electronics and for manufacturing renewable energy technologies.

Context: The Andean nation is the most economically advanced country in Latin America and the Caribbean, though it's still plagued by socioeconomic inequalities.

Tensions regarding those inequalities came to a head in massive protests two years ago, which led to a constitutional revision process.

Currently, Chile is ruled by the 1980 Constitution, drafted by the Pinochet regime and which critics say is excessively rigid for issues such as social security reforms.

The convention drafting a new constitution has put forth progressive proposals that might hinge on whoever is elected in December.

The big picture: Since its return to democracy in 1990, Chile has had center-left and center-right presidents. That will change with Boric or Kast.

Chile's future government will fall on a political extreme

Chile's centrist candidates were completely shut out in Sunday's first-round vote.

A voter casts her ballot during national elections on November 21, 2021 in Arica, Chile. 

A voter casts her ballot during national elections on Nov. 21, 2021 in Arica, Chile. Photo: John Moore/Getty Images

Chile

China is becoming the most formidable rival America has faced, and the risk of confrontation with Russia, North Korea or Iran still looms. Authoritarians are rising, the chaotic Afghanistan exit revealed the limits of U.S. power, and the pandemic, climate change and other critical challenges continue to pose grave threats.

World

After a record economic expansion, the coronavirus pandemic sent the U.S. economy into a recession as unemployment soared to staggering heights. The country now faces urgent questions about how much stimulus is needed for reeling consumers and businesses, and what a recovery might look like.

Economy & Business

Axios Generate

General Motors' expanding electric vehicles' business left dry land Monday when the auto giant announced it's acquiring a 25% stake in the electric boating company Pure Watercraft.

Why it matters: "The investment in Pure Watercraft represents the first time GM will commercialize all-electric marine products and applications," Mark Lubin, a GM spokesman, tells Axios.

He notes GM has previously invested in "exploratory all-electric proof-of-concept marine propulsion projects," and that work will inform their collaboration with Pure Watercraft, he said.

Details: The deal is worth $150 million, Pure Watercraft CEO Andy Rebele tells CNBC, which includes cash and other commitments. "The company is not disclosing the split between cash and payment-in-kind," it reports.

GM plunges into electric marine transport

General Motors announced it's acquiring a 25% stake in the electric boating company Pure Watercraft.

General Motors

From the Valley to D.C., Big Tech players like Facebook, Google and Amazon are under more scrutiny than ever as new technology develops and privacy and antitrust concerns grow in lockstep with companies’ ambitions.

Technology

The Federal Reserve is poised to increase its climate focus even as President Biden's nomination of Chairman Jerome Powell to a second term disappointed advocates of policies to tilt the economy away from fossil fuels.

Catch up fast: Biden on Monday announced Powell's nod and said he's tapping Lael Brainard — a Fed board member who's outspoken on climate — as vice chair.

"[Powell's] made clear to me [that] a top priority will be to accelerate the Fed's effort to address and mitigate the risks that climate change poses to our financial system and our economy," Biden said.

Why it matters: The Fed has broad powers to weigh and ameliorate climate-related risks to the financial system. 

These risks include the physical damage from costly extreme weather events and the potential for stranded fossil fuel assets in the transition to cleaner energy.

However, it remains to be seen how far the Fed will go on climate, an area outside its traditional work that requires new staff expertise.

What we're watching: The Fed is already studying the risks that climate change poses to the financial system and has been deepening its work over the last year.

The Fed has set up two committees, one to study how climate change may affect the nation's economic stability and the other to examine the individual banks it oversees. 

In late 2020, the Fed also joined the multilateral Network of Central Banks and Supervisors for Greening the Financial System.

Both Powell and Brainard have said the Fed may conduct "scenario analysis" of climate risks, possibly focusing on individual banks — but stopped short of calling for "stress tests" that activists want.

Reuters reported last week that the Fed has been pressuring banks to analyze their portfolios for climate risks and may release findings to the public in 2023.

What they're saying: "The risk is real and the systemic nature of that risk is pretty apparent already, and is only going to get more so," Dan Firger, managing director at Great Circle Capital Advisors, told Axios. "And I think the very smart people inside the Federal Reserve are keenly aware of that fact."

Ilmi Granoff of the ClimateWorks Foundation expects the Fed's scenario analyses to reveal the need for risk management strategies for the economy as a whole and individual financial institutions.

"I expect the Fed to start scrutinizing financial risks, macro and systemic risks and at individual financial institutions. ... They've created two high level committees with really, really serious people at the helm of them," he said.

The intrigue: The Fed's moves so far stop well short of what environmentalists want from the central bank and other financial regulators.

Groups including Evergreen Action and the Sierra Club say the Fed should increase the amount of capital banks must hold for their fossil portfolios. They want "portfolio limits" on the level of polluting assets banks can hold.

More broadly, Powell's nomination to a second term came despite criticism of his tenure from some Capitol Hill Democrats who are very active on climate.

Yes, but: Christina Parajon Skinner of the University of Pennsylvania's Wharton School expects Powell will be "attentive" to ways climate affects the Fed's mandates "while also staying within the boundaries of the law and therefore not pushing the Fed into a drastically new role."

She expects the Fed to analyze risks, be prepared to deal with them and weave climate considerations into supervisory work.

"The Fed does not have the authority to use its policy tools to attempt to mitigate climate change with its balance sheet, its regulatory might (via capital charges or otherwise), or through the moral suasion deployed under the guise of supervision," she said in an email exchange.

What's next: Powell and Brainard's nominations aren't the only climate puzzle pieces left to be put into place at the Fed.

There are three other vacancies on the Fed Board of Governors that Biden needs to fill. One of them, the vice chair for supervision, will play a lead role in overseeing the Fed's climate work.

What's next for the Fed on climate change

The Fed is poised to deepen its climate work but activists are pushing for stronger interventions.

Photo illustration of Jerome Powell wearing a green MAGA hat with the stitched phrase "Make America Green Again" 

Photo illustration: Annelise Capossela/Axios. Getty Images photos: Andrew Caballero-Reynolds/AFP and Lev Radin/Pacific Press/LightRocket

Federal Reserve

Climate change

President Biden directed the Department of Energy on Tuesday to release 50 million barrels of oil from the U.S. Strategic Petroleum Reserve to help lower fuel prices.

Why it matters: It's the Biden administration's most direct effort yet to tamp down on high gasoline prices that have become a political headache for the White House amid wider inflation.

The move comes after House Democrats urged Biden in a letter Monday to release crude oil and temporarily ban exports, according to Reuters.

By the numbers: Gasoline prices are averaging around $3.40 a gallon, more than $1 per gallon higher than a year ago, according to the American Automobile Association.

32 million barrels will be released over the next several months and eventually replaced in the coming years.

18 million barrels will be part of a sale that was previously authorized by Congress.

The reserve held a total of 604 million barrels of oil as of Nov. 19, according to the Energy Department.

The big picture: The Biden administration said the effort, for the first time, will be coordinated with releases from other major oil consumers nations, including China, India, Japan, South Korea and the United Kingdom.

Global energy prices have swung wildly over the last two years because of oil supply disruptions and demand imbalances set off by the coronavirus pandemic.

Biden has repeatedly urged OPEC and its allied countries to ramp up production to meet demand, but the oil cartel has largely ignored his demands and stuck to its current plan to raise output by 400,000 barrels per day in December.

The International Energy Agency said last week that though the global oil market remains tight, "a reprieve from the price rally could be on the horizon" as U.S. production rises, Axios' Ben Geman reports.

Yes, but: It's unclear whether the release, even alongside the other countries' releases, will have any sustained, significant effect on prices.

Go deeper: Biden asks FTC to investigate gas and oil companies for "illegal conduct"

Editor’s note: This story has been corrected to state that gasoline prices are more than $1 per gallon higher than a year ago (not double).

U.S. to release 50 million barrels of oil from strategic reserve

It's the Biden administration's most direct effort yet to tamp down on elevated gasoline prices.

Biden speaking from the Eisenhower Executive Office Building in Washington, D.C., on Nov. 22.

Biden speaking from the Eisenhower Executive Office Building in Washington, D.C., on Nov. 22. Photo: Samuel Corum/Bloomberg via Getty Images

Department of Energy (DOE)

Joe Biden

President Biden has made the COVID-19 crisis and a post-Trump return to national unity and traditional democratic ideals his top priorities. From vaccinations to stimulus to schools, Biden is seeking bipartisan compromise while showing a willingness to use executive authority and bare Democratic majorities in the U.S. House and Senate to implement his policies. Republican leaders are navigating deep party divisions over if and how to move beyond former President Trump.

Politics & Policy

Canadian officials warn a "parade of storms" is set to pummel British Columbia with more heavy rains this week.

Why it matters: The province is still reeling from last week's "atmospheric river event" that hit the Pacific Northwest, triggering record rainfall, extensive flooding and mudslides. The deadly storm displaced thousands of people, CBC News notes.

A woman loads personal items from a flooded home in Abbotsford, British Columbia, Canada, on Sunday. 

A woman loads personal items from a flooded home in Abbotsford on Sunday. Photo: Justin Sullivan/Getty Images

Threat level: "We are bracing for a record-breaking fall in terms of overall precipitation numbers for communities along the central and south coast," said Armel Castellan, the warning preparedness meteorologist for government department Environment and Climate Change Canada at a briefing Monday.

Castellan didn't expect so much rainfall to hit B.C. earlier in the week, but said there'd be enough precipitation to "likely exacerbate the vulnerabilities on the ground currently."

He warned another atmospheric river event would hit the region on Thursday, "tapping into some subtropical moisture and heat." And another atmospheric river system was forecast to hit strike B.C. on Saturday.

"When you have a parade of storms or an incredible fall, as we have since the middle of September with upwards of 200% of normal rain, the soils are very saturated and a lot of the moisture immediately creates a runoff issue."

The big picture: The premier of B.C. declared a state of emergency in response to the storm system last week. But the province is still being impacted by its aftermath. 

Officials said Monday that "several electrical transformers" were still down, CTV News reports.

One official implored volunteers helping with retrieval efforts by boat to slow down because their speeds were creating waves that were "affecting the local farms," according to CTV News.

What else to expect: "It's going to bring freezing levels up to perhaps 2,500 meters [more than 8,200 feet], so fairly high," Castellan said. "There would be some snowmelt with this moisture." 

Castellan expects heavy rains across B.C., with up to 4 inches forecast to fall in the North Shore Mountains around Howe Sound in the coming days. 

Context: Climate change has raised the odds of extreme weather, such as precipitation events.

The bottom line, per Castellon: "We are dealing with very active weather for the foreseeable future."

British Columbia bracing for "parade of storms" amid flood recovery

The region is set to be hit by 2 atmospheric river events this week, a top Canadian meteorologist warns.

 Satellite images taken last Friday of flooding in Sumas Prairie to the east of Abbotsford. 

Satellite images taken last Friday of flooding in Sumas Prairie to the east of Abbotsford in British Columbia, Canada, near the border with the U.S. Photo: Maxar Technologies

extreme weather

Extreme weather

A look at the scientific breakthroughs changing the world, explorations in space and in worlds beyond our own and the threats posed to us by our own planet, both out of our control and of our own making.

Science

A new analysis casts doubt on whether scientists can precisely estimate how much nations' combined emissions-cutting pledges will stem global warming, instead showing a wide range of potential outcomes.

Why it matters: World leaders need to know if emissions targets currently on the table would meet the Paris Agreement's temperature goals or if more stringent commitments are needed. The new study shows they may be placing too much faith in temperature projections.

During COP26 in Glasgow, analyses showed that a business-as-usual course of greenhouse gas emissions would yield about 2.7°C (nearly 4.9°F) of global warming compared to preindustrial levels in 2100.

Quick analyses released during the talks showed that all of the COP26 emissions pledges, including action on methane emissions, could bring that down to below 2°C. But the new study casts doubt on the accuracy of these figures. 

Threat level: For the new study, published in the journal Nature Climate Change, scientists used seven different computer models to simulate how future emissions may play out through 2030, 2050 and 2100. It shows the dangers of focusing too much on specific global warming forecasts. 

This is because of the uncertainties involved in projecting future emissions and economic growth, along with model uncertainties and other factors.  

The world has already warmed by 1.1°C (nearly 2°F), bringing a slew of devastating extreme weather events.

Context: At COP26, the International Energy Agency offered up a projected warming figure of 1.8°C (3.2°F), provided every voluntary emissions pledge (known as Nationally Determined Contributions, or NDCs) would be met on time and taking into account pledges to cut emissions of methane, a powerful greenhouse gas, as well as net-zero commitments for 2050. 

Other reports, such as data from the nonprofit Climate Action Tracker, found that the world is now on a path to warm by 2.4°C (4.32°F) when looking only at 2030 targets. 

"Even with all new Glasgow pledges for 2030, we will emit roughly twice as much in 2030 as required for 1.5°," the Tracker's analysis stated.

Such warming would be above the Paris Agreement's target of keeping warming to "well below" 2°C, with the stretch goal of limiting it to 1.5°C.

What's new: The new study began a year ago and focused on how large a range of warming the models projected, in order to get a better idea of the uncertainties involved. 

The models showed that current policies, which would not involve stringent emissions cuts, would lead to between 2.3°–2.9°C (4.1°–5.2°F) of warming by 2100. 

When including the NDCs, that range would come down somewhat to 2.2°–2.7°C (3.9°–4.9°F) above preindustrial levels by 2100. 

Yes, but: When accounting for uncertainties in how the climate will respond to additional amounts of greenhouse gases, the study shows a wider range of potential outcomes. 

Global warming could reach as high as 3.8°C (6.84°F) above preindustrial levels, or as low as 1.7°C (3.1°F), when such uncertainties are taken into account. 

What they're saying: "Really we are quite uncertain about where current policies and NDCs take us, contrary to a lot of the media and communication during COP26," study co-author Glen Peters of the CICERO Center for International Climate Research in Norway, told Axios in an email. 

"This is important in a policy context, as ambitious climate goals could be further out of reach than often believed."

Study casts doubt on climate emissions pledge estimates

Don't trust precise projections of how much warming is likely to occur, the new study warns.

Flooding in British Columbia after a major storm struck the region.

In an aerial view, floodwaters surround homes and farms on Nov. 20 in Abbotsford, British Columbia. Photo: Justin Sullivan/Getty Images

Global warming

New EPA data on U.S. vehicle fuel economy paints a mixed picture, showing record average efficiency in model year 2020 that's nonetheless far short of what policymakers hope to see ahead.

 Driving the news: The annual report shows that average overall fuel economy for cars, SUVs and light trucks sold in the U.S. reached 25.4 miles per gallon (mpg) in model year 2020 in real-world conditions, a 0.5 mpg increase over 2019.

Preliminary data shows that it's basically stagnant this year.

The big picture: It's nowhere near the 52 mpg by 2026 in standards the Biden administration has floated, which Bloomberg notes "equates to roughly 41 mpg in real-world driving conditions that typically account for about a 20% drop in fuel economy from EPA’s ratings."

Why it matters: Transportation overall — including heavy trucks and other vehicles — is the largest source of U.S. carbon emissions.

Zoom in: For model year 2020, Tesla’s all-electric fleet had by far the lowest tailpipe CO2 emissions, EPA notes. The next best performers on average CO2 emissions and mileage were Honda, Subaru and Hyundai.

Conversely, "Stellantis had the highest new vehicle average CO2 emissions and lowest fuel economy of the large manufacturers in model year 2020, followed by Ford and GM," EPA notes.

Go deeper: The slowing global gains in fuel economy

U.S. fuel economy hits record high but falls short of policymakers' hopes

Fuel economy for vehicles sold in the U.S. reached 25.4 miles per gallon last year,  a 0.5 mpg increase.

Gasoline

Transportation

Average fuel consumption of new light-duty vehicles sold

Data: Global Fuel Economy Initiative/IEA; Chart: Jacque Schrag/Axios 

A new(ish) analysis shows that "fuel economy progress is stalling" amid the growing global popularity of SUVs and light trucks.

 Driving the news: The joint report from the Global Fuel Economy Initiative (GFEI) and the International Energy Agency takes stock of where things stand through 2019, the last year with comparative data.

What they're saying: "The average rated fuel consumption of new light-duty vehicles fell by only 0.9% between 2017 and 2019...to 7.1 litres of gasoline equivalent per 100 kilometres," the report notes. That's far below the 1.8% annual average decline between 2010 and 2015. 

It's nowhere near the pace needed for GFEI's goal of cutting the fuel consumption of new light-duty vehicles in half by 2030, relative to 2005 levels. 

The group is a partnership between the United Nations, International Council on Clean Transportation and others.

The intrigue: "Increasing vehicle size and power has eroded as much as 40% of the fuel consumption improvements that would otherwise have occurred thanks to technical advances in vehicles and engines."

The big picture: Getting on a better fuel consumption path requires stronger electric vehicle deployment policies, but also faster adoption of advanced efficiency tech for internal combustion engines.

The report lays out ideas in areas like policy design for efficiency and CO2 standards, phasing out fuel subsidies, harmonizing standards across nations to lower costs and more.

Go deeper: Energy efficiency gains are too slow for a sustainable climate path

Fuel efficiency progress "is stalling" because of growth of SUVs

Fuel economy is stalling primarily because of growing global popularity of SUVs and light trucks.

A person fills up her car at a gas station.

House Democrats passed their $1.75 trillion social spending and climate package last week, but what happens next is hazy.

Why it matters: The bill, if it makes the finish line, would be by far the most sweeping U.S. climate package ever enacted.

The provisions — including over $300 billion in clean energy tax incentives — are key to the White House goal of cutting U.S. emissions 50% below 2005 levels by 2030.

Yes, but: The House plan approved Friday is likely to change in the Senate. Here are a few things we're watching: 

1. Electric vehicles. The plan would expand consumer tax incentives, and one big way is that union-made EVs can receive up to $4,500 more in incentives over the base $7,500 credit.

But Sen. Joe Manchin (D-W.Va.) is reportedly not on board with the union-made provision, and nonunion automakers are lobbying against it too.

"The union provision may be problematic from an international trade standpoint in any case. I wouldn’t bet on seeing it in the final draft," ClearView Energy Partners Kevin Book said in an email exchange.

2. Carbon pricing. There's intermittent buzz about a carbon tax push, but the odds are very long.

3. The clock. Senate Majority Leader Chuck Schumer (D-N.Y.) wants to complete the plan before Christmas, but the calendar is very tight and negotiations could drag. If the talks spill over into 2022, the plan could lose momentum.

4. The overall size. The plan contains over $500 billion total in clean energy and climate-related provisions, so keep an eye on whether that overall size and scope remains.

5. Methane fees and other oil-and-gas provisions. The House plan imposes fees of up to $1,500 per ton on industry methane emissions. 

Manchin, whose state is a major gas producer, is again a lawmaker to watch there. 

ClearView's Book notes one reason a methane fee could survive: "Appalachian gas production might be a relative winner on methane intensity."

The plan also raises royalty rates for oil-and-gas production on federal lands and waters and includes new fees on federal leases.

Go deeper ... Poll: 52% of Americans say they've experienced effects of global warming

The murky future of Biden's climate agenda in the Senate

If it makes the finish line, it would be by far the most sweeping U.S. climate package ever enacted.

Illustration of the Earth looming over the Capitol dome.

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