Sep 25, 2019

Axios Generate

By Ben Geman
Ben GemanAmy Harder

Welcome back. Today's Smart Brevity: 957 words, < 4 minutes.

And RIP to longtime Grateful Dead lyricist Robert Hunter, whose words did glow...

1 big thing: What warming means for oceans and frozen places

Illustration: Sarah Grillo/Axios

Global warming is greatly transforming the planet's oceans and frozen regions, and future emissions levels will dictate how much additional harm unfolds this century and beyond, a major United Nations-led scientific analysis shows.

Why it matters: "The ocean is warmer, more acidic and less productive. Melting glaciers and ice sheets are causing sea level rise, and coastal extreme events are becoming more severe," the UN's Intergovernmental Panel on Climate Change (IPCC) said in a statement alongside their report Wednesday.

The big picture: The report sizes up the stakes for over 1.3 billion people living in low-lying coastal regions or high mountain areas, as well as animal species and ecosystems.

  • More broadly, oceans and the cryosphere — permafrost, sea ice, glaciers and so forth — are "interconnected with other components of the climate system."

Where it stands: The report finds "widespread shrinking" of the cryosphere in past decades due to global warming.

  • One example is the Greenland Ice Sheet losing mass at an average rate of 278 billion tons per year between 2006 and 2015.
  • Another is the substantial retreat of Arctic sea ice cover in September, a metric scientists watch as it's when sea ice is at its lowest point every year.
  • "These sea ice changes in September are likely unprecedented for at least 1000 years," it notes.

When it comes to oceans, the rate of warming has likely more than doubled since 1993. Global average sea-level rise in 2006–2015 is estimated to be 3.1 –4.1 millimeters annually, which is "unprecedented over the last century."

Where it stands: The report takes stock of many harms already unfolding for humans and other species.

  • Examples include: marine heatwaves causing large-scale coral bleaching, contracting habitat for certain mammals and birds due to sea ice loss, and the sea-level rise adding to a variety of coastal damages.
  • Since the mid-20th century, the shrinking cryosphere in the Arctic and high mountain regions has brought "predominantly negative" effects on food security, water quality, infrastructure and more.
Bonus: UN report urges action

Ongoing changes are unavoidable, but the ultimate extent of the damage will depend on how much nations are able rein in rising greenhouse gas emissions.

What's next: For instance, sea-level rise will continue and could reach 30–60 centimeters by 2100 even if emissions fall sharply and temperature rise is held well below 2°C (the goal of the Paris Climate Agreement).

  • But, it could reach 60–110cm, or up to 3.6 feet, "if greenhouse gas emissions continue to increase strongly," the summary notes.

The bottom line: "If we reduce emissions sharply, consequences for people and their livelihoods will still be challenging, but potentially more manageable for those who are most vulnerable," IPCC chair Hoesung Lee said in a statement.

Go deeper: Massive change already here for world’s oceans and frozen regions (The Washington Post)

2. The semantics of pricing carbon

A new Emerson College poll suggests that the wording around carbon pricing could matter a lot.

What they found: Emerson polled slightly over 1,000 voters on Sept. 21–23.

  • The question: "Would you support or oppose a carbon tax?" The answer: 35% said yes, 27% said no, and 38% percent were unsure. (Margin of error is 4.9%)
  • The question, posed to the other half of the group: "Would you support or oppose a fine on corporations that pollute the air with carbon dioxide?” The answer: 52% supported it, 25% opposed and 24% were unsure. (MOE is 4.3%)

Why it matters: Several 2020 White House hopefuls — including Joe Biden and Elizabeth Warren — have endorsed some kind of pricing, though details are scarce.

But, but, but: The level of public support for a given policy is just loosely related to its chances of advancement.

  • And needless to say there are all kinds of detailed policy design questions beyond the scope of these 30,000-foot level questions.
  • But generally speaking, a fine on companies would probably seep through into their prices.
3. Where it stands: Saudi oil and the Aramco IPO
"Saudi Arabia has restored its oil production capacity to 11.3 million barrels per day, three sources briefed on Saudi Aramco’s operations told Reuters, maintaining a faster than expected recovery after the Sept. 14 attacks on its oil facilities."

Why it matters: The aerial attack initially took about 5.7 million barrels of production offline — or roughly 5% of daily global daily output.

  • But markets have calmed down after prices initially surged. This morning Brent crude is trading at roughly $61.10, which is essentially pre-attack levels.
  • What they're saying: Traders appear to be focusing on bearish forces. “Focus will return to faltering oil demand concerns as there is unlikely to be any quick resolution to U.S.-China trade differences to positively shift economic expectations,” BNP Paribas' Harry Tchilinguirian told the Reuters Global Oil Forum, per CNBC.

What's new: There are emerging reports over the last day about the vague plans for the massive, multi-phase IPO of Saudi Aramco, the state oil giant whose facilities were badly damaged in the attack.

  • Bloomberg, citing "people with knowledge of the matter," reports that Aramco is planning to "formally announce the kickoff" of the IPO around Oct. 20 and that a listing on the Saudis' domestic exchange could happen as soon as November.
  • The timing remains uncertain and they haven't yet selected an exchange for the international listing that would follow the domestic one.

The intrigue: Per the Wall Street Journal, Saudi officials are discussing whether to eventually float as much as 10% of the company, in contrast to the previously planned 5%.

  • The kingdom intends to raise massive funds to help diversify its crude-reliant economy.
  • Analysts caution that Crown Prince Mohammed bin Salman's hoped-for $2 trillion valuation is unlikely to materialize. But if did, a 10% float could bring in $200 billion, the WSJ notes.
4. The oil boom echoes throughout the economy

A new Dallas Fed note explores a metric of what the shale-driven U.S. production surge has meant for the wider economy.

What they found: "The share of the upstream oil and gas sector in the level of U.S. nonresidential fixed investment doubled from 3.4 percent in the decade before the shale oil boom to an average of 6.4 percent since 2008," it states.

But, but, but: That can cut both ways, because investment levels are sensitive to oil price movements.

  • "While contributing positively to investment growth most of the time, upstream oil and gas became a drag from roughly 2014 to 2016 when oil prices fell about 50 percent," the report states.
Ben GemanAmy Harder