Three of the biggest investment firms in the world were sued by Texas and 10 other states last week, in a case that not only could transform the way trillions of dollars are managed but could also hobble global efforts to transition to a sustainable level of carbon emissions.

Why it matters: Texas Attorney General Ken Paxton, along with 10 of his colleagues, is attempting to use the U.S. judicial system to forcibly derail the global consensus that investors can and must play an important role in the transition to a net-zero world.

The big picture: The case has been filed in the Eastern District of Texas, which in turn is overseen by the 5th U.S. Circuit Court of Appeals — a court that has a reputation for politicized and idiosyncratic jurisprudence.

• Paxton might therefore be able to prevail despite the inherent issues with his case — especially since the conservative Supreme Court would be more ideologically inclined to let the 5th Circuit's decision stand.
• From January, Paxton will also have the likely support of the Department of Justice and the U.S. attorney general, whomever that might be.

Zoom in: The theory of the case is that the three investors — BlackRock, Vanguard and State Street — illegally colluded to force a group of public coal-mining companies to produce less coal.

• There's no evidence of collusion in the complaint, beyond the fact that all three of them had joined (and in some cases later left) one or both of a pair of climate-focused membership organizations, Climate Action 100+ and Net Zero Asset Managers.
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• There's also no evidence that any of the asset managers pressured any companies to produce less coal, beyond the fact that those companies' coal production went down.

The bottom line: As Aniket Shah, head of sustainability at investment firm Jefferies Group, says, "The future of climate and the future of energy will now be decided through the courts, not decided through legislation."

"The anticompetitive effects of Defendants' conduct has been pronounced and unmistakable," claims Paxton in his complaint, adding that "this dynamic is particularly clear" in the South Powder River Basin market.

The big picture: Production of SPRB, a particular grade of coal mined principally in Wyoming, fell in 2020 when the pandemic hit electricity demand.

• Paxton's claim is that, the pandemic notwithstanding, public coal miners — pressured by their shareholders — reduced production even as private coal production went up.

Zoom in: The Fayette Power Project, the coal-fired power plant that the city of Austin co-owns with the Lower Colorado River Authority, a state-created utility, runs on Powder River Basin coal.

Yes, but: The reduction in coal production makes sense given the decline in the number of coal-burning power plants. Without demand from those plants, there's no one for the miners to sell their coal to.

• In turn, the reduction in coal-fueled plants is mostly a function of the fact that natural gas is now a cheaper fuel source than coal.

🤧 Cedar pollen has returned earlier than expected, with the Austin area seeing its first cedar numbers of the season last week. (KXAN)

🌆 A new affordable housing development opened in Southeast Austin and will serve people 55 and older. (Austin Monitor)

💰 More than 17 million square feet of office space was vacant in Austin as of midyear, with an expected lost rent value of $834.7 million, per a new report. (Austin Business Journal 🔒)

As a matter of city policy, Austin Energy has been cutting back the portion of its energy generation from coal.

By the numbers: A decade ago, Austin Energy got 26% of its power from coal, 16% from natural gas, 23% from nuclear and about 35% from renewables.

• Now renewables make up about 50% of the portfolio.

Yes, but: Pulling the plug on its co-ownership of the coal-fired Fayette Power Project has proved elusive for the city.

• The Austin City Council had called for Austin Energy to shut down its portion of the plant by the end of 2022.
• But its co-owner, the Lower Colorado River Authority, has said it plans to continue operating the plant as long as it's reliable and cost-effective.
• Meanwhile, power from the coal plant can still be lucrative for the city-owned utility, generating as much as $11 million on a hot summer day.

A growing number of Austin bars are getting into the holiday spirit with Christmas-themed takeovers and pop-ups.

Why it matters: We may not see snow in Austin, but at least we can sip a hot toddy on a 70-degree day.

Here are some of the festive pop-up bars in Austin this holiday season:

Stephen F's Bar and Terrace

The Stephen F. Austin Royal Sonesta Hotel will transform its bar and terrace into Ralphie's on Congress, a holiday pop-up inspired by the holiday classic "A Christmas Story."

• Enjoy plenty of nostalgic holiday decor — including leg lamps — and specialty cocktails starting Thursday through Dec. 31.

Lala's Little Nugget

You can't miss this year-round Christmas bar in North Austin, and don't forget that there's a new location, Lala's South Pole.

• Try their boozy eggnog, peppermint hot cocoa and Prancer's punch during the winter season.

Austin Motel

The Austin Motel is bringing back its "Winter Wanderland" experience, with a forest of colorful trees and festive cocktails at their brand-new Ski Lodge Bar through Dec. 25.

• Don't miss festive film floats every Friday, with "Love Actually" on Friday, "National Lampoon's Christmas Vacation" on Dec. 13 and "Elf" on Dec. 20.

Festive igloos and more