Feb 11, 2019

Axios Generate

Good morning (technically night) from Australia! I am here to report on this country's fascinating energy and climate stories. Let me know if you have any tips, recommendations, etc.!

For my latest column I team up with our visuals editor Lazaro Gamio to illustrate what addressing climate change means to different people. It's a digestable way to understand these often opaque concepts.

After my column, Ben Geman will get you up to speed on the rest of today's news. 

1 big thing: Tackling climate change, illustrated
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Illustrations: Lazaro Gamio/Axios. People icons by Gan Khoon Lay via the Noun Project.

Progressive Democrats are pushing climate change to Washington’s front burner, and we’re here to break it down for you.

The big picture: Addressing climate change can mean very different things to very different people. Here's a visual roadmap to help you quickly understand what’s going on. 

The bottom line: What addressing climate change requires is reducing greenhouse gas (GHG) emissions.

Reality check: Yes, it's really that simple. But it’s not easy. Don’t confuse the two. On top of this, everyone latches onto their other priorities, for better or worse — or more likely for better and worse.

Go deeper: Check out the whole thing here.

2. Dissecting Amy Klobuchar's 2020 launch

Sen. Amy Klobuchar jumped into the White House race yesterday and her speech's climate lines are worth breaking down...

"The people are on our side when it comes to climate change. Why? Because like you and I, they believe in science. That’s why in the first 100 days of my administration I will reinstate the clean power rules and the gas mileage standards and put forth sweeping legislation to invest in green jobs and infrastructure. And on day one, we will rejoin the international climate agreement."

Quick take: Maybe I'm reading too much into it, but it can be viewed as a mix of ambition and an implicit nod to the daunting legislative hurdles in front of moving a big bill.

  • Reinstating former President Obama's Clean Power Plan is hardly the most ambitious goal in the world — that rule would have largely provided a regulatory backstop for trends already apparent in the power sector.
  • Reinstating the auto mileage rules would be a return to what was already on the books before Trump-era rollbacks began. Ditto for recommitting to the Paris agreement, which President Trump plans to abandon.

But, but, but: Klobuchar is among the Senate sponsors of the Green New Deal (GND) resolution, so there's one template for the "sweeping legislation" she mentions.

  • But it's extraordinarily unlikely that Democrats will have a filibuster-proof majority in the Senate even if they retake the chamber in 2020, so big legislation is a longshot.

The big picture: Climate change is playing an improbably large role in the early 2020 jockeying. The latest example came yesterday evening, when Trump inaccurately suggested (again) that cold weather somehow disproves climate change.

  • Trump mocked her on Twitter for "talking proudly of fighting global warming while standing in a virtual blizzard of snow, ice and freezing temperatures."
  • "Science is on my side, @realDonaldTrump. Looking forward to debating you about climate change (and many other issues)," Klobuchar responded, also on Twitter.

Go deeper: The Green New Deal is getting a boost from 2020 hopefuls

3. On tap this week: oil, science, cybersecurity

Crude check-in: The International Energy Agency will release the latest edition of its closely watched monthly oil market report on Wednesday.

  • It'll be a chance to see how they're sizing up what's happening in Venezuela and, of course, everyone will be watching for any hints of softening demand growth.
  • Meanwhile, the U.S. Energy Information Administration will release its monthly short-term energy outlook tomorrow, and we'll be checking if there are any revisions to their U.S. projection. Right now they see U.S. production averaging 12.1 million barrels per day this year and 12.9 mbd in 2020.

On Capitol Hill: Hearings this week include...

  • On Wednesday, the House Science, Space and Technology Committee will hold a hearing on the state of climate science. It's getting some buzz in part because the witness invited by Republicans — the Niskanen Center's Joseph Majkut — does not dispute the scientific consensus on human-induced warming.
  • On Thursday, the Senate Energy and Natural Resources Committee will gather to discuss cybersecurity risks to the energy sector. Witnesses include Federal Energy Regulatory Commission Chairman Neil Chatterjee.
4. When money is green
Illustration: Sarah Grillo/Axios

Axios' Felix Salmon uses the GND's rollout to unpack the idea of mobilizing huge public-backed investments to tackle major ills.

Driving the news: The resolution and an FAQ from Rep. Alexandria Ocasio-Cortez's office envisions public banks other mechanisms to finance climate-friendly energy, transportation infrastructure and more.

Felix picks things up with the FAQ (which AOC's office later pulled down)...

The Federal Reserve can extend credit to power these projects and investments and new public banks can be created to extend credit. There is also space for the government to take an equity stake in projects to get a return on investment. At the end of the day, this is an investment in our economy that should grow our wealth as a nation, so the question isn’t how will we pay for it, but what will we do with our new shared prosperity.

Fiscally, the idea is to use the existing tools of finance — banks, credit, equity — to turbocharge a level of investment that the market could never muster if left to its own devices.

This idea is not new, although it is of unprecedented size. The International Financing Facility for Immunization was launched in 2006 and raised $5.7 billion for Gavi, the global vaccine alliance.

  • Gavi's money, in turn, saw an impressive return on investment, averting more than 4 million deaths. Those living individuals will contribute hundreds of billions of dollars to the global economy over their lifetimes.
  • A similar International Finance Facility for Education could launch as soon as this year.
  • In the private sector, issuance of green bonds has been growing at an astonishing pace. According to the Climate Bonds Initiative, global green bond issuance rose from $13 billion in 2013 to more than $167 billion in 2018.
  • A record number of "socially conscious" mutual funds launched last year. Together, they now manage some $1.2 trillion in assets.

The bottom line: Anthropogenic global warming is a function of industrialization and, ultimately, capitalism. The only force powerful enough to change the planet's climate is also the only force powerful enough to stop us from destroying it entirely.

Go deeper

5. Petro-notes: prices, OPEC, Venezuela

State of the market: Crude prices are treading water this morning as traders weigh countervailing forces, per the Wall Street Journal. The OPEC+ deal's cuts and Venezuelan turmoil put upward pressure on prices.

  • But their piece quotes a JBC Energy note which says, "it has to be argued that a lot of the economic data that has been released over the last few days has really not been too encouraging, and U.S.-Chinese trade talks are also seemingly not progressing very fast."
  • As we sent this newsletter, Brent crude was trading up a bit to $62.11, while WTI dropped to around $52.39.

OPEC: Via Reuters, "Igor Sechin, head of Russian oil giant Rosneft and one of Vladimir Putin’s closest allies, has written to the Russian president saying Moscow’s deal with OPEC to cut oil output is a strategic threat and plays into the hands of the United States."

Venezuela: Per Bloomberg, "Venezuela’s oil minister made a surprise appearance at an energy event in India, as the embattled OPEC producer seeks closer ties with major crude customers in the face of crippling U.S. sanctions."

6. Why the GND tries to solve everything

The new episode of the Columbia Energy Exchange podcast is a chat with Rhiana Gunn-Wright of New Consensus, a very young think tank that's influential in the GND movement.

Why it matters: The GND is dominating the conversation in climate policy and politics right now, and a number of top-tier Democratic White House hopefuls have signed on.

The intrigue: One interesting part of the podcast explores the connective tissue between an aggressive emissions-cutting plan and provisions like jobs guarantees and sweeping health care goals.

  • One connection is the idea of creating more fluidity in the labor force to enable widespread participation in climate-friendly sectors. Gunn-Wright notes that people are often wedded to their jobs because of employer-sponsored health care.
  • “We recognize that there has to be a supportive system in order for people to take these new jobs that are coming out to create, possibly, more flexibility in the labor market if we are going to need people to be moving from particular industries into other industries,” she said.
  • She covers the same ground and more in this Twitter thread.

In terms of the politics of the climate plan, she argues that if it can be enacted, it would be less vulnerable to subsequent attacks because it's tethered to providing wider jobs and health care gains.

  • “They understand that it is packaged together. We think that that could create a bit more durability too,” she said.

* * *

There were two other weekend news bites on GND that caught my eye...

This long Twitter thread by tech expert and author Ramez Naam has a whole bunch of thought-provoking observations and criticisms.

  • One criticism is that the GND isn't structured to help further push down tech costs in a way that spurs faster uptake in other countries.
  • He also wants to see more emphasis on wringing emissions out of agriculture and industry.
  • Naam floats an idea I hadn't heard before — to create an ag-focused agency modeled after the Advanced Research Projects Agency-Energy (he calls it ARPA-A).
  • He'd also like to see an ARPA-I (for industry) focused on steel, cement and other manufacturing.

This Bloomberg opinion piece by Noah Smith says the costs for the social programs in the plan (and in the online FAQs that ended up being taken down) could lead the GND to "spend the U.S. into oblivion."