Oct 8, 2021

Axios Generate

🍻 Happy Friday! Today's Smart Brevity count is 1,332 words, 5 minutes.

📊 Data point of the day: 54%, the drilling investment boost Moody's projects is needed to prevent an oil supply deficit in coming years, per Bloomberg.

🚨 Breaking: "Chinese officials have ordered more than 70 mines in Inner Mongolia to ramp up coal production by nearly 100 million tonnes as the country battles its worst power crunch and coal shortages in years." (Reuters)

🎶 Culture Club's sophomore album "Colour by Numbers" turns 38 this weekend and provides today's intro tune...

1 big thing: Dissecting Google's climate denial crackdown
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Data: Google Trends; Chart: Jacque Schrag/Axios

Google's new policy of demonetizing climate denial content marks a significant step in its efforts to rein in climate misinformation, Andrew writes.

Why it matters: Videos promoting clear falsehoods about the existence of global warming or its causes have long found a home on YouTube, which Google owns.

  • Meanwhile, on search, ads for climate contrarian websites have consistently appeared next to search listings for sites offering politically neutral and scientifically rigorous evidence.

Driving the news: The company's announcement Thursday that the new policy takes effect Nov. 1, during the UN Climate Summit in Glasgow, could cool the political polarization around climate in the U.S.

How it works: Per a Google statement, the policy affects the monetization of "content that contradicts well-established scientific consensus around the existence and causes of climate change."

  • "This includes content referring to climate change as a hoax or a scam, claims denying that long-term trends show the global climate is warming, and claims denying that greenhouse gas emissions or human activity contribute to climate change."
  • Google plans to use "automated tools and human review" to put the policy into practice.
  • The system does not seek to limit policy debate, making Google's job easier but potentially allowing the promotion of partisan assaults on established science.
  • Discerning denial can be tough. Google says it will "look carefully at the context in which claims are made, differentiating between content that states a false claim as fact, versus content that reports on or discusses that claim."

Our thought bubble, from Axios' Scott Rosenberg: Facebook and Google have both faced censorship accusations from conservatives who object to measures that have sought to limit misinformation on COVID, elections and other topics.

  • YouTube's move on climate is likely to encounter similar objections, given the politically polarized views on this issue, especially in the U.S.

Between the lines: The policy also brings Google's ad revenue strategy more in line with its sustainability agenda.

  • The company aims to run on 100% carbon-free energy by 2030.
  • On Wednesday, Google rolled out new features to help travelers limit the carbon footprint of their flights via Google Flights.

What's next: The policy will immediately be put to the test with COP26 taking place.

  • Spikes in social media activity around climate change over the last six months coincided with major news events, according to data from Keyhole.
  • Peaks in search activity also tend to occur around news events, including climate summits, according to Google Trends.

What we're watching: Whether Google's move boosts pressure on Facebook to modify its efforts to limit climate misinformation.

  • Facebook expanded its Climate Science Center last month and steers users there when they search for climate-related terms. Facebook also pledged $1 million to a grant program to combat misinformation.
  • But activists say the platform still allows denial to flourish.
2. Federal agencies reveal their climate challenges

Illustration: Aïda Amer/Axios

Federal agencies are out with the first iteration of new climate adaptation and resilience plans under the Biden administration, Andrew writes.

Catch up fast: The reports released by the White House Thursday come in response to an executive order issued by President Biden on Jan. 28.

Agencies were asked to look at their exposure to climate risks and put together processes to become more resilient to any threats.

Why it matters: Noteworthy details in this initial wave include:

  • The Energy Department has only "completed screenings and assessments" of its climate vulnerabilities at 51% of its sites so far.
  • The agency is responsible for a sprawling footprint of nuclear weapons storage and disposal sites and national laboratories.
  • The department is especially concerned about the impacts of extreme events, such as heat waves and wildfires, on its outdoor workforce and facilities.
  • Work is underway at the Hanford Site in Washington State to create protocols for workers to operate in high heat, along with "the planting of wildfire-tolerant vegetation and fire barriers."

Meanwhile, the Department of Homeland Security sees a bleak near-term future when it comes to extreme weather events, and warns of surges of climate change migrants fleeing disasters.

  • NASA, an agency more closely identified with studying climate change, has an overarching climate adaptation goal of "maintaining access to space."
  • Many launch facilities the agency uses are located along shorelines that are vulnerable to sea level rise, erosion and hurricanes.
  • And the Defense Department sees increased needs for soldiers to be prepared to operate in extreme weather conditions, including the Arctic. It also notes the possibility of future conflicts over water scarcity.
3. Catch up fast: Pledges, Tesla, monuments

Targets: The United Arab Emirates, a major oil producer, has joined the club of nations pledging to reach net-zero emissions by 2050.

  • Yes, but: Long-term pledges are...just long-term pledges. Still, it drew cheers from officials seeking momentum ahead of the UN climate conference.
  • U.S. special climate envoy John Kerry called the UAE's Net Zero 2050 Strategic Initiative an "example for other energy-producing nations."

More targets: "South Korea's government on Friday said it would raise its greenhouse gas reduction goal from 26.3 percent to 40 percent by 2030, as part of efforts to achieve carbon neutrality by 2050." (Reuters)

Electric cars: "Tesla CEO Elon Musk announced at a shareholder meeting Thursday that the Tesla headquarters will move from Palo Alto, California, to Austin, Texas." (Axios)

Public lands: "President Joe Biden will restore two sprawling national monuments in Utah that have been at the center of a long-running public lands dispute, and a separate marine conservation area in New England that recently has been used for commercial fishing." (Associated Press)

4. Natural gas markets weigh Putin's plans
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Data: FactSet; Note: Shows Dutch TTF Gas Monthly Index; Chart: Axios Visuals

Sky-high European natural gas prices are volatile this morning after yesterday's retreat (see chart above) that followed Russian President Vladimir Putin's comments that seemingly signaled more supply in the offing, Ben writes.

What we're watching: What follows the statements about supply from Putin and other Russian officials, in terms of gas via existing infrastructure and the timing of final approval of the Nord Stream 2 pipeline.

"Market analysts quickly suspected that the offer to increase supplies to Europe was likely intended to put pressure on Germany to certify the Nord Stream 2 gas pipeline," CNBC reports.

Threat level: "Until there is greater clarity on Russia’s gas send-outs to Europe, we expect EU gas prices to remain volatile and skewed to the upside," Goldman Sachs said in a note.

The big picture: The gyrations as traders mull Putin's comments also highlight Russia's geopolitical influence in Europe, which is heavily reliant on Russian gas.

  • A New York Times piece calls the gas price surge that's rocking European industry and consumers a "birthday present" to Putin, who turned 69 yesterday.
  • They note the Kremlin has "bridled" at European efforts to diversify its supplies, and now "a confluence of events catapulted energy prices to record heights, putting the Russian president in a position to ride to the rescue."
5. The Fed's emerging climate oversight

Illustration: Sarah Grillo/Axios

Fed governor Lael Brainard is filling in more blanks about how the central bank could weigh and limit financial institutions' exposure to climate risk, Ben writes.

Driving the news: "I anticipate it will be helpful to provide supervisory guidance for large banking institutions in their efforts to appropriately measure, monitor, and manage material climate-related risks," she said in a speech Thursday.

Brainard also said the Fed is developing "scenario analysis" to model financial risks and "assess the resilience of individual financial institutions and the financial system to these risks."

Why it matters: The NYT calls the speech the "clearest signal yet" that the Fed will seriously weigh big banks' vulnerabilities. Brainard's influence may grow too.

  • Brainard is reportedly in the running to become Fed's vice chair for supervision. Randal Quarles' term ends soon.
  • Her remarks "go beyond" Quarles' positions on climate, Bloomberg reports.
  • She's also a potential candidate for Fed chair if Biden dumps Jerome Powell.

Yes, but: The speech — citing "novel combinations" of risks — is clear-eyed about uncertainties of trying to game out physical and transition risks facing financial institutions.

"Although we should be humble about what the first generation of climate scenario analysis is likely to deliver, the challenges we face should not deter us from building the foundations now," Brainard said.