Jul 20, 2018

Axios Generate

By Ben Geman
Ben GemanAmy Harder

Happy Friday! And happy birthday to Carlos Santana, who takes us into the weekend with today's intro tune...

1 big thing: Tough day for climate advocates

Two events just hours apart yesterday show the tall hurdles facing advocates of tougher climate policies and forcing fossil fuel companies to pay for global warming's toll.

1. A federal judge tossed out New York City's lawsuit Thursday afternoon against Exxon, Chevron and three other multinational oil companies, ruling that it wasn't a matter for the judiciary.

  • "Global warming and solutions thereto must be addressed by the two other branches of government," U.S. District Judge John Keenan wrote.
  • His ruling echoed a federal judge in California, who tossed out a similar case — one of several lawsuits nationwide — last month.

2. But just hours before Keenan said climate change was best handled by other branches, House lawmakers showed just how difficult that would be via Congress, even as the White House is backing off executive steps like EPA rules.

  • On Thursday morning the House easily approved a GOP leadership-backed resolution attacking the very concept of taxing carbon emissions.
  • Just six Republicans broke ranks and opposed the non-binding measure. Yes, it was a departure from the unanimous House GOP anti-tax vote in 2016 (more on that below), but nonetheless a tiny fraction of the Republican caucus.

Be smart: Keenan's decision spells out why efforts to extract financial compensation from companies for costly efforts to deal with rising sea levels and other effects will be challenging for local and state governments.

Keenan notes that Congress has delegated authority to the executive branch via the Clean Air Act, as well as the role of foreign policy in tackling a global problem. He writes...

"[T]he immense and complicated problem of global warming requires a comprehensive solution that weighs the global benefits of fossil fuel use with the gravity of the impending harms."
"To litigate such an action for injuries from foreign greenhouse gas emissions in federal court would severely infringe upon the foreign-policy decisions that are squarely within the purview of the political branches of the U.S. Government."

What's next: New York City Mayor Bill de Blasio vowed to appeal the decision, a spokesperson said.

Go deeper: This Bloomberg story has reactions from the parties to the case.

2. Parsing the House CO2 tax vote and what's next

Axios' Amy Harder has more on yesterday's House vote, including part of her interview with GOP Rep. Carlos Curbelo, who will introduce a carbon tax bill on Monday that would impose a tax beginning at $24 per ton in 2020 and would rise 2% annually above inflation.

What they're saying: Curbelo responded to passage of the GOP leadership-backed resolution, which even drew support from most Republican members of the bipartisan "Climate Solutions Caucus" that he co-chairs.

Curbelo called the "no" votes from six Republicans — along with another who voted "present" — a "small victory" in light of unanimous GOP support for a similar measure two years ago. He added:

“We went from zero to seven. That’s how you measure progress in this institution. There were many more who thought about it long and hard.”
“I don’t judge any of my colleagues for their vote today, this is kind of a question in a vacuum. Had they had a time to review my proposal — timing didn’t work out — you would have gotten more no votes.”

What we're seeing: Multiple think tanks rolled out analyses of Curbelo's proposal yesterday.

  • One study, led by Columbia University's Center on Global Energy Policy, projects that it would cut U.S. greenhouse gas emissions by 30%–40% below 2005 levels by 2030.
  • Resources For the Future's Marc Hafstead discusses the proposal here.

The other side: Amy has learned that a coalition of conservative groups, led by Americans for Tax Reform, will hold a competing event Monday highlighting their opposition to a carbon tax.

  • Why it matters: There's a constellation of groups with influence in GOP ranks that will vigorously try to prevent Curbelo's bill from gaining any traction.
3. Electric vehicle news and notes

Number of the day: Via the Wall Street Journal, there are now 487 (!) electric vehicle makers in China as the government takes aggressive steps to make the country an EV tech powerhouse and boost deployment of the vehicles.

  • Yes, but: The CEO of one startup, Singulato Motors, estimates that just 10% of the startups will make it through the next five years. And some analysts believe the number of survivors will be far lower, around 1%, the story notes.

Batteries: Per Reuters, "Panasonic Corp. said it was unable to determine how much of the cobalt used in batteries it makes for Tesla cars comes from Cuba, a country subject to U.S. sanctions, and that it had suspended relations with a Canadian supplier as a result of its concerns."

Utilities: Via Greentech Media, "New York utility Consolidated Edison this week launched an online marketplace to make it easier for customers to purchase electric cars." It follows a similar move by the power company National Grid.

  • Why it matters: "As utilities stare down a future of flat or declining electricity consumption, electric vehicles offer a glimmer of hope," their story notes.
4. Trump's risky move on Iran crude oil sanctions

Iranian President Hassan Rouhani (on far left) and Swiss President Alain Berset (on far right) clap as Iranian and Swiss officials shake hands after signing an agreement July 3. Photo: Ruben Sprich/AFP via Getty Images

The Atlantic Council's Barbara Slavin writes in our Expert Voices section ... President Trump’s decision to unilaterally withdraw from the Iran nuclear deal throws a new degree of uncertainty into global oil markets and poses a stark dilemma for U.S. foreign policy.

The big picture: The Trump administration's efforts to drastically reduce Iran’s oil exports might risk a massive blow to U.S. consumers and allies.

If Trump's “maximum pressure” campaign succeeds, the volatile and rising gasoline prices that result could finally dent his approval ratings, even among hardline supporters, and spark a global recession.

The Trump administration has declared that it wants Iran’s oil customers to “go to zero” by November 4. But in reality, the administration will have to provide waivers for certain countries to avoid dire consequences.

What they're saying: “The more successful you are at [hurting Iran], the more complications you have at home with higher oil prices, and the more complications you have with your allies, pushing them into recession,” according to Amos Hochstein, a former special envoy for International Energy Affairs.

Read more in the Axios stream.

5. On my screen: Power, LNG, climate research

Record-breaking: The Houston Chronicle reports that ERCOT, the Texas power grid operator, "announced that Texas set a new all-time, system-wide peak demand record for two hours Thursday afternoon, topping out at 73,259 megawatts between 4 p.m. and 5 p.m."

LNG: Per Reuters, "Russian natural gas producer Novatek delivered on Thursday the first ever liquefied natural gas (LNG) cargo to China via the Northern Sea Route (NSR) alongside the Arctic coast, which drastically cuts delivery time to Asian consumers."

Cyber threat: A S&P Global Platts feature writes, "Every day the energy sector faces a barrage of cyber attacks, and just about once a day an attack is novel, something the industry has not seen before but must defend against."

Climate: Axios' Andrew Freedman reports ... Human activities are altering Earth's seasons in a way that is creating a greater contrast between summer and winter in much of North America, Europe and Eurasia, a new study finds.

  • Why it matters: The research, published Thursday in Science, is the first to find a human "fingerprint" on the seasonal cycle of temperatures, adding another global trend that is formally attributed to human emissions of greenhouse gases.
  • Read his full story here.
Ben GemanAmy Harder