Good morning! Today's Smart Brevity count: 892 words, < 4 minutes.
Situational awareness: "With two days to go before the scheduled conclusion of the United Nations climate talks in Madrid, envoys from almost 200 nations remain divided about how to bring market mechanisms into reducing greenhouse gas emissions," Bloomberg reports.
Plus, at this moment in 1968, Diana Ross & The Supremes were ending a two-week run atop the Billboard charts with today's terrific intro tune...
1 big thing: Europe's "Green Deal" shows the hard road to U.S. cuts
Ursula von der Leyen, the new European Commission president, yesterday unveiled plans for an ambitious "European Green Deal" meant to make the EU a net-zero emitter by 2050.
Why it matters: The EU is the world's third-largest greenhouse gas emitting region after China and the United States.
The big picture: The sweeping plan envisions crafting a new climate law within the next 100 days.
- And it broadly proposed the outlines of ideas in areas like fuel tax policies, trade via "border carbon adjustments," a "just transition" for fossil-fuel dependent regions, and greatly expanded investment.
The intrigue: Greentech Media has a good look at the whole thing here and the WSJ has good coverage here. But, I want to talk about just one of the documents released yesterday: a "roadmap" of "key actions" around policy development envisioned in the coming years.
- There are dozens of them!
- Everything from deepening the targeted 2030 emissions cuts to a June 2021 tax policy proposal to the creation of new strategies.
- It envisions crafting new strategies for offshore wind, climate-friendly steel production, various mobility plans, the "just transition" fund, stronger biodiversity and forest efforts, a "farm to fork" policy, and on and on.
Quick take: Here's why I'm droning on (by Axios standards) about this: It's relevant to the U.S. and the 2020 elections.
- I haven't had time to digest everything the EC dumped yesterday, but even taking it for a quick spin underscores the incredible time and labor it will take to accomplish.
- Similarly, transforming Democratic White House candidates' plans into actual policymaking is a huge lift.
- Put another way, even the somewhat detailed plans from Elizabeth Warren are, in essence, scribbles on a napkin that can obscure the painstaking work ahead if the U.S. ever hopes to implement an aggressive climate policy.
My thought bubble: I know this is kind of obvious. But I think it's worth mentioning because lots of attention (including in this newsletter) is paid to candidates' sweeping targets (like net-zero by 2050) and aggregate spending levels (like Bernie Sanders' $16 trillion proposal).
- But it's worth remembering that even successfully implementing a small fraction of these plans would be a long slog.
2. What we're watching: Big Oil's write-downs
Chevron's eye-popping write-down of natural gas (and some oil) assets earlier this week probably won't be the industry's last move amid a gas supply glut and low prices.
What they're saying: “We expect the trend of write-downs to continue as price outlooks are adjusted down," Wood Mackenzie analyst Tom Ellacott said.
- And via Reuters: "Oil and gas producers could wipe billions of dollars more off the value of U.S. natural gas assets in the months ahead, analysts said on Wednesday."
The big picture: I also recommend this column by Bloomberg's Liam Denning, who uses Chevron's move to more widely argue that the industry is in a new era.
- "In the first decade of the supermajors, when peak oil supply was a thing, big projects with big budgets to match were something to boast about. As the second decade draws to an end, only the leanest operators will survive," he writes.
3. New report shows OPEC's old problems
A new International Energy Agency report underscores why oil markets haven't been hugely impressed with last week's OPEC+ decision to deepen their output curbs.
Driving the news: The agency's latest closely watched monthly report projects that global oil stockpiles could increase by 700,000 barrels per day in the first quarter of 2020.
- It also sees the "strong build in inventories" continuing in the second quarter.
- That increase is projected even with less output from the OPEC+ countries — which deepened their cuts by 500,000 barrels per day — and slowing production growth projections for the U.S., Brazil and Ghana.
Why it matters: The projection is the latest sign of how OPEC is having a hard time exerting its sway amid the U.S. boom and other headwinds.
Where it stands: Brent crude is trading at roughly $63.97 this morning. The report notes that it was at $63-per-barrel on the eve of last week's OPEC+ meeting in Vienna.
- "[T]he market has done its own sums and the reaction to oil’s new deal has so far been muted," IEA said.
The intrigue: The report also notes that the efficacy of the latest production-limiting deal is something of a question mark.
- "[T]he overall effectiveness of the OPEC+ agreement depends on the willingness of all its parties to fully comply, including those whose compliance so far has been less rigorous."
4. A quietly large source of carbon emissions
A new piece in The Conversation points to an important but often overlooked source of carbon emissions: leaky power grids that waste energy before it reaches consumers.
What they did: Researchers calculated the pollution from additional energy needed to make up for what's lost in transmission and distribution systems worldwide.
- The experts with Johns Hopkins and the University of Maryland tallied "compensatory emissions" based on generation sources and grid quality in different countries.
What they found: It's big when you add it all up, as you can see in the chart above.
- The losses also vary a lot by country, notes the piece derived from a recent paper in the journal Nature Climate Change.
- "In 2016, aggregate transmission and distribution losses reached 19% in India and 16% in Brazil," they note.
- They were over 50% in Haiti, Iraq, and the Republic of Congo, which "means that only half of the electricity generated reached or was billed to the consumers as usable power."
What's next: They call for greater attention to stemming emissions through use of better tech and infrastructure upgrades.
- Various ways to lower energy loss include replacing inefficient transmission wires, using superconductors to reduce resistance in transmission wires, and configuring distribution lines in a better way.