Apr 24, 2019

Axios Generate

Good morning! After lots of sanctions coverage yesterday, we've got a lot on climate change in today's edition.

But for continuity we'll stay in the '80s for today's intro tune. At this moment in 1982, Joan Jett & The Blackhearts were atop the Billboard charts with this classic anthem...

1 big thing: The biggest nations' climate culpability

Illustration: Rebecca Zisser/Axios

New peer-reviewed studies examine how the world's largest carbon emitters could add to temperature extremes in specific regions, and how the same countries can spread technology that could help prevent runaway warming.

Why it matters: One provides a deeper understanding of why current policies will not only cause a temperature rise that blows past the Paris climate agreement goals, but will also lead to more acutely dangerous spikes.

The big picture: Varying levels of future emissions-cutting by the 3 biggest polluters — China, the EU and the U.S. — change the odds of "extreme temperature events" in some areas of the globe.

  • "Here, for the first time, we quantify emitter‐level contributions to the frequency of future extremes based on current emissions reduction policies," states the paper in Geophysical Research Letters.

It models various emissions pathways by the 3 polluters, including...

  • Cuts consistent with holding the temperature rise to the Paris Climate Agreement's baseline target of 2°C, and those that would meet the aspirational goal of stopping the rise at 1.5°C above preindustrial levels.
  • Existing pledges under the Paris deal that aren't enough to meet either of those goals, and would allow temperatures to soar far past 2°C.

What they found: Higher emissions not only mean higher average temperatures, but they also increase the large emitters' contributions to the likelihood of extreme heat events.

  • "This approach demonstrates that current actions can have a calculable effect on future climate events," it states.
  • While it focuses on the 3 biggest actors, it could "feasibly and fairly be extended" to other developed nations and high-polluting developing countries.

The intrigue: The paper draws conclusions about some specific regions. Here's what lead author Sophie Lewis of the University of New South Wales told me about Central Europe, one of the areas studied...

  • They find that extreme temperatures are twice as likely at warming above 2°C, and 12 times more likely if 3°C of warming is breached.
  • "Based on current commitments, we suggest that it is virtually certain that the U.S. contributes to these extremes, but this contribution could be reduced to a 3x increase risk if [emissions] pledges were strengthened," she said.

Threat level: Lewis said it explored "quite moderate extremes."

  • "These were the hottest months (warmer than 95% of other months) under the various levels of global warming. We would like to extend this to look at more extreme extremes (the very hottest days etc)," Lewis said.

What they're saying: Michael Mann, the prominent Penn State climate scientist, called it "solid and important work" that helps to account for the impact of big emitters like the U.S.

  • But, but, but: Mann, who was not involved in the study, says the widely used set of climate models it relies on almost certainly underestimate the effect of climate change on extreme warmth.
  • "[T]hey don’t capture certain key aspects of jet stream behavior that are behind, for example, the unprecedented weather extremes that played out across the Northern Hemisphere during the summer of 2018," he said.
2. What's needed for worldwide CO2 cuts

The second study out yesterday shows global temperatures will still far exceed the Paris goals even if the largest emitters like China, the U.S. and India were to aggressively cut emissions by mid-century, the second study unveiled yesterday shows.

Why it matters: Avoiding that places a huge burden on the developing world to deeply cut emissions fast — and creates a big responsibility to help those nations employ the tech to do it, according to the research published in the journal Earth's Future.

The bottom line: "Real progress toward the Paris Agreement goal awaits an effective commitment by leading countries to undertake breakthrough research and development of low‐, zero‐, or even negative‐carbon‐emissions energy technologies that can be deployed at scale in the developing world," it states.

What they did: The paper explores how much different parties would need to cut emissions under an aggressive decarbonization pathway that could hold global temperature rise below 2°C.

It gets sobering fast, stating...

"Even if the United States, [EU], China, and India were able to halve their emissions each decade 2020–2050 ... the accomplishment would nevertheless leave a huge and debilitating challenge for the rest of the world."

Threat level: The paper assesses the cuts to global CO2 needed based on different odds of achieving the Paris temperature goal.

  • To have even a 66% chance of staying under 2°C would mean, in addition to the biggest emitters' cuts, the rest of the world would need to "immediately change its current course" and also cut emissions in half every decade, starting now.

What they're saying: Co-author Glen Peters of Norway's Center for International Climate Research said both deployment of existing tech and breakthroughs are needed.

  • "Even to maintain cost declines of existing renewables will require innovation. And developments are not only needed in the generation sector, but also distribution, end-use, etc.," he said in an email exchange.
3. Breaking: Occidental battles Chevron for Anadarko

Occidental Petroleum on Wednesday offered to pay $57 billion to buy Anadarko Petroleum, topping an existing agreement with Chevron that already would have been the largest oil merger in years.

Why it matters: The move reflects how big oil companies like Occidental are keen to expand their position in the shale patch, especially the surging Permian Basin, where Anadarko has a sizable position.

“Occidental is a leader in using technological innovation to create value, and we will deploy our expertise to enhance the performance and productivity of Anadarko's assets not only in the Permian, but globally."
— Occidental CEO Vicki Hollub, in statement

Details: Occidental offered $76 per share for Anadarko, half in cash and half in stock, whereas Chevron offered $65 per share, 75% of which was in stock.

The intrigue per Bloomberg: "The Occidental offer may not be as appealing as Chevron’s to Anadarko shareholders despite the higher price. Occidental’s smaller size and balance sheet compared with Chevron mean there may be more uncertainty over its prospects of completing a deal."

Chevron and Anadarko did not provide immediate comment on Wednesday.

4. Equinor strikes a climate deal with investors

Equinor, the Norwegian oil-and-gas behemoth, on Wednesday became the latest major to reach a deal with activist investors that bolsters its climate-related initiatives.

What's next: Equinor agreed to "align its business model with the goals of the 2015 Paris climate accord, and will review its corporate lobbying policy and the carbon intensity of its products, the company said in a statement. It will also link executive pay to climate-related targets," Bloomberg reports.

The big picture: Equinor is the latest oil major to reach an agreement with the investor network called Climate Action 100+, the same group that pressured Shell and BP into new pledges and disclosures in recent months.

Quick take: I'll be curious to see what comes of this part of the agreement: "Equinor commits to undertake a comprehensive review of its memberships in industry associations that hold an active position on climate and energy policy."

  • The same pledge led Shell to recently abandon American Fuel & Petrochemical Manufacturers. However, Equinor isn't a member of that group.

Go deeper:

5. Big today: The state of Tesla's ship

The Silicon Valley electric automaker will report its Q1 results after markets close.

Why it matters: The report and call with analysts follow a busy stretch for the company, including changes in Model 3 pricing, a board shakeup and CEO Elon Musk's court battles with securities regulators.

What's next: "Tesla had already cautioned that the company would swing to a loss this quarter after a profit for the previous two quarters. At one point, Chief Executive Elon Musk had forecast a first-quarter profit but that was before several price cuts to its vehicles, layoffs to slash costs and worse-than-expected deliveries during the period," the Wall Street Journal reports.

Go deeper: Tesla deliveries fall short of Wall Street expectations

6. Global warming and global wealth gap
Expand chart
Adapted from Diffenbaugh, et. al., "Global warming has increased global economic inequality", 2019; Chart: Axios Visuals

Another climate study states global warming has already created winners and losers across the world, with poorer, tropical nations suffering the most even though they contributed far less to the problem in the first place, Axios' Andrew Freedman reports.

Why it matters: This finds that global warming has already affected the gap between rich and poor nations.

  • It suggests that countries like Norway have benefited from warming air temperatures and other associated impacts, while nations like India, Brazil and Nigeria have seen far slower growth in per capita GDP as a result of warming.

The big picture: The study, published Monday in Proceedings of the National Academy of Sciences, finds that from 1961 to 2010, global warming decreased the per capita wealth in the world's poorest countries by about 17% to 30%.

  • Meanwhile, the gap between the group of nations with the highest and lowest per capita GDP is now about 25% wider than it would have been without climate change, the study found.
  • While economic inequality between countries has narrowed in recent decades, the new study shows this should've happened at a more rapid rate, and it suggests that future narrowing of this gap may be harder to achieve due to climate change.

Read more

7. Lightning round: oil, Interior, EVs

Oil markets: Via Reuters, "Oil prices slipped below six-month highs on Wednesday after signs that cushioned a rally based on fears of tight supply resulting from OPEC output cuts and U.S. sanctions on Venezuela and Iran."

Agencies: "The Interior Department’s Office of Inspector General has opened an investigation into whether six of President Trump’s appointees have violated federal ethics rules by engaging with their former employers or clients on department-related business," the Washington Post reports.

EV charging: Google announced an effort yesterday to help connect drivers with charging, stating in a blog post...

  • "Starting today, you can see the real time availability of charging ports in the U.S. and U.K, right from Google Maps–so you can know if chargers are available before you head to a station. Simply search for 'ev charging stations' to see up to date information from networks like Chargemaster, EVgo, SemaConnect and soon, Chargepoint."