Aug 22, 2019

Axios Generate

By Ben Geman
Ben GemanAmy Harder

Good morning! Today's Smart Brevity: 1,272 words, < 5 minutes.

Yesterday marked exactly 30 years since Tears for Fears released today's expertly crafted intro tune...

1 big thing: Bernie moves on climate as Inslee exits
Giphy

2 big pieces of energy and climate news in the 2020 White House race: Sen. Bernie Sanders is going big and Gov. Jay Inslee is getting out.

Driving the the news: Sanders today released a $16.3 trillion plan that calls for 100% renewable power and transportation systems by 2030 and decarbonizing the whole U.S. economy by 2050.

  • It arrives on the heels of Inslee last night ending his White House run that raised climate's profile in the race even though the Washington State governor never gained polling traction.
  • Per AP, Inslee will announce he's seeking a 3rd term as governor.

Why it matters: Sanders is battling Sen. Elizabeth Warren for 2nd place in the Democratic race behind Joe Biden, and polls show global warming is among the top priorities for the party's primary voters.

  • The plan explicitly calls itself a Green New Deal, the sweeping idea popular on the progressive left.
  • Per Sanders, the plan will pay for itself in 15 years.

The big picture: A few pillars of the plan include...

  • Declaring climate change a national emergency.
  • Emphasis on "frontline" communities, including people of color, via a new Climate Justice Resiliency Fund.
  • "Massive" R&D investments.
  • Banning fracking, new offshore leases, fossil fuel imports and exports.
  • Ending immediately "all new and existing fossil fuel extraction on federal public lands."
  • "Massively" raising taxes on the fossil fuel industry and "investors’ fossil fuel income and wealth."
  • Hugely increasing U.S. support for the Green Climate Fund, an existing multilateral effort to help developing countries cut emissions.

Yes, but: While the whole thing adds lots of specific policy and spending ideas to the vague Green New Deal framework, his plan is nonetheless more of a vision statement than a pathway for policy that stands much chance of implementation as proposed.

  • Huge sections, such as spending and tax code changes, would require Capitol Hill to play along. Needless to say, that's a heavy lift.
  • Few analysts would agree that there's any plausible pathway to fully renewable power and transit in 10 years.

What's new: One of the concepts for transitioning the electricity system is a renewables-focused, $2.4 trillion overhaul and expansion of federal Power Marketing Administrations that currently cover 33 states.

Bonus, 1: Initial takeaways on Sanders' plan

My initial thoughts on Sanders' plan...

1. It's vague on carbon pricing. It doesn't call for a carbon tax, which Sanders has in years past.

  • But part of the wider section arguing the plan will "pay for itself" calls for "making the fossil fuel industry pay for their pollution, through litigation, fees, and taxes, and eliminating federal fossil fuel subsidies."

2. Sanders is aggressively taking sides in the debate on the left over pushing for a fully renewable power system vs. a mix of renewables, nuclear and fossil fuels with CO2 capture.

  • He's on the 100% renewables side, calling the rest "false solutions."

3. He wants to spend a lot of money on transportation initiatives, including...

  • $2.1 trillion in grants to help low- and moderate-income families buy EVs.
  • $86 billion on a national EV charging network and $407 billion to help schools and transit agencies electrify bus fleets.
  • $607 billion in regional high-speed rail investment.

4. Other big-ticket items include...

  • $2.2 trillion for home and business efficiency upgrades.
  • $1.3 trillion to help workers in fossil fuels and other carbon-heavy sectors "receive strong benefits, a living wage, training, and job placement."

5. Sanders has Wall Street in his sights. Per the plan...

  • "[W]e will establish new financial rules through the SEC and other regulatory agencies to pressure hedge funds, the insurance industry, and other large investors currently invested in fossil fuels to divest or pay for clean energy investments through clean energy bonds."
Bonus, 2: A little more on Inslee
Illustration: Sarah Grillo/Axios

Policy: He offered a great deal of it on domestic energy, weaving climate into international relations, agriculture policy, and much more.

  • So his campaign could live on if a future Democratic president mines his very detailed plans for ideas.
  • “We left an open-source gold standard of what will get us to a cleaner future and really will end our reliance on fossil fuels,” Inslee told HuffPost, noting "it could be used by anyone who ends up in the White House."

But, but, but: An interesting point about the effect of his campaign, or lack thereof, comes from FiveThirtyEight's Nate Silver via Twitter:

"People will try to spin it differently but Inslee's lackluster performance is an obviously bearish indicator for the prioritization of climate change in Democratic politics."
2. Trump gets personal in auto regs fight

A move by at least 4 big automakers to cut a separate deal with California on nationwide emissions standards clearly has President Trump's attention.

What's happening: Last night Trump tweeted attacks against the pact, which includes Ford, that effectively rebuffs his plan to freeze Obama-era emissions and mileage rules, rather than allowing them to get more stringent through the mid-2020s. In one tweet, Trump said...

"Henry Ford would be very disappointed if he saw his modern-day descendants wanting to build a much more expensive car, that is far less safe and doesn’t work as well, because execs don’t want to fight California regulators."

Why it matters: The tweets represent an escalation in the battle over one of the most far-reaching Obama-era climate efforts. They come as major automakers are weighing whether to join Ford, Honda, VW and BMW in the pact with California.

The big question: Will Trump's public criticism give other automakers pause about joining the deal?

Quick take: The industry is an an awkward spot. It felt former President Obama's mandates were infeasible, but argues Trump's plan to freeze them outright goes too far.

  • Mercedes-Benz and one other major company are reportedly interested in joining Ford, Honda, VW and BMW in the agreement.

The intrigue: The Wall Street Journal has new reporting about various companies' decision-making.

  • They report that some foreign-based carmakers fear that explicitly breaking with Trump by joining the deal could "embolden" the president to carry out tariff threats.
  • GM, meanwhile, "doesn’t think the California proposal gives enough credit for sales of fully electric vehicles," per WSJ.

The big picture: Reuters points out that Trump's claims are highly questionable...

"There is no evidence that existing fuel economy rules would degrade vehicle performance.
"And environmentalists and many states challenge Trump’s assertion that his administration’s proposed rule would boost vehicle safety or dramatically reduce the price of vehicles."
3. The stakes of Big Auto's decisions on Trump
Expand chart
Data: Rhodium Group; Chart: Axios Visuals

The Rhodium Group consultancy is out with an analysis of the automakers' agreement with California on emissions standards (which are essentially a proxy for mileage improvements).

The big picture: The chart above looks at the projected effects on the nationwide vehicle fleet. It compares them to the Obama-era standards and Trump's plan to freeze mileage rules.

What they did: They ran an analysis assuming that Ford, Honda, BMW and VW — which together represent about a third of the U.S. market — sell cars nationwide that comply with the California deal.

What they found: "In this split market, we estimate that fleetwide average rises to 39 to 41 mpg in 2025, and 42 to 45 mpg by 2030."

By the numbers: They estimate that the California deal "could reduce emissions by 184 to 266 million metric tons (MMTs) cumulatively from 2021 to 2035 relative to Trump’s pending rollback."

  • If all automakers active in U.S. markets signed on, "cumulative reductions would jump to 557 to 807 MMT over the same timeframe."
  • That would be "on par" with the effects of the Obama-era standards.
4. Shell's latest power move

Royal Dutch Shell will buy ERM Power, a business energy supplier in Australia, for around $418 million, in a move to enter that electricity market, the Financial Times reports.

Why it matters: It's a major new example of ongoing moves by Shell — and some other oil majors — into the electricity and EV charging space, even though it's still small in scale compared to their core oil-and-gas business.

Ben GemanAmy Harder