Nov 15, 2019

Axios Generate

By Ben Geman
Ben GemanAmy Harder

Happy Friday! Today's Smart Brevity count: 1,085 words, ~ 4 minutes.

And this month marks 45 years since Linda Ronstadt released the album "Heart Like A Wheel," so her amazing voice takes us into the weekend...

1 big thing: Transportation emissions are a tough nut to crack
Expand chart
Reproduced from the Department of Energy; Chart: Axios Visuals 

Using carbon pricing to cut transportation emissions could be tough, and some Energy Department data I noticed this week helps to explain why.

Driving the news: The latest entry from the Vehicle Technologies Office's handy "transportation fact of the week" series compares a decade of changes in U.S. gasoline prices to vehicle miles traveled.

The big picture: The chart above nicely illustrates something that climate advocates and analysts already know: Big fuel price swings don't change driving levels much.

  • There's a number of reasons, including the fact that lots of driving isn't particularly optional and that people lack reliable alternatives in many areas.
  • But transportation is the largest source of U.S. greenhouse gas emissions, so cutting pollution from the sector via cleaner cars, efficiency and mass transit is a priority.

Quick take: The data suggests that a carbon tax would have to be really high to put a big dent in VMT. Plus, high carbon prices — for that matter any carbon prices — are politically a tough sell.

What they're saying: "It’s just really difficult to move the needle on emissions in the transportation sector," Noah Kaufman, an economist with a Columbia University energy think tank, tells me.

  • "Consumers may be a lot more responsive to CO2 prices than typical gasoline price changes, but even so, the impact on vehicle emissions of a double-digit CO2 price will be small, at least in the near-term," Kaufman said.

But, but, but: Kaufman, a carbon tax supporter who analyzes various Capitol Hill proposals, says they can still be a useful part of the transportation policy toolkit.

  • He jogged my memory about an analysis he penned last year that argued "the effect of a carbon tax on vehicle emissions may be more substantial than conventional wisdom suggests."
  • In his piece, he points out that in the few places with robust taxes on vehicle emissions (like British Columbia), "an emerging body of evidence suggests that the behavior of drivers has shifted far more than expected."
  • Reasons why, he notes, are: policy changes are more permanent than fuel price swings; they're often well publicized and involve "shocks" rather than gradual changes.

The bottom line: Decarbonizing transportation will take a basket of approaches, as his analysis notes.

2. European Investment Bank says no to gas

The European Investment Bank has decided to end all financing for fossil fuel development by the end of 2021 — including natural gas projects.

Why it matters: It's the "first time any major multilateral lender has curbed lending to natural gas projects because of climate change concerns," the Financial Times reports.

  • And Bloomberg points out that the bank, which adopted the policy Thursday, is the world's largest multilateral financial institution.
  • "Given the EIB’s market impact and influence over the lending strategies of investors, its decision could end up depriving polluting projects from other sources of financing as well," they write.

Yes, but: The policy leaves the door open for financing natural gas projects — with a big caveat.

  • "Gas projects are still possible, but would have to be based on what the bank called 'new technologies,' such as carbon capture and storage, combining heat and power generation or mixing in renewable gases with the fossil natural gas," Reuters reports.

The big picture: The move underscores a growing focus in climate circles on natural gas, which produces far less CO2 when burned than coal, but is nonetheless a major emissions source.

  • "The EIB's new financing criteria will make lending to gas projects very difficult. It highlights that gas is also increasingly in the spotlight of the climate debate," Wood Mackenzie research director Nicholas Browne said in a note Friday.
3. Filling in the blanks on the Green New Deal

Illustration: Sarah Grillo/Axios

The Green New Deal just got a tad less vague.

Driving the news: Sen. Bernie Sanders (I-Vt.) and Rep. Alexandria Ocasio-Cortez (D-N.Y.) on Thursday unveiled a 10-year plan to spend up to $180 billion to decarbonize and overhaul the nation's public housing.

Why it matters: The lawmakers are calling the proposed bill the first attempt from Green New Deal sponsors to begin adding legislative details to the sweeping concept.

  • These aren't just random legislators: Sanders is in the top-tier White House candidate pool, and AOC is a popular and influential figure in progressive circles.
  • White House hopeful Sen. Elizabeth Warren, who at times has challenged Joe Biden for the lead in the primary race, is a co-sponsor.

How it works: The far-reaching plan envisions grants for efficiency overhauls and renewable energy use; workforce development; improved water quality; construction of community and childcare centers; recycling; improved transportation access and more.

The big picture: It's very Green New Deal-y.

  • The plan combines big investments (beyond what's likely to pass), an aggressive timeline, and a multitopic focus that extends beyond climate into economic and social justice realms.
  • On that last point, it emphasizes housing rights and needs, job training, and a "sustainable safety net." Plus, it calls for tenant leadership and job production to play a role in the overhaul itself.

Go deeper:

Editor's note: This story has been updated to clarify the scope of the proposed legislation and that the plan would spend up to $180 billion.

4. OPEC's uphill climb into 2020

The International Energy Agency's latest oil market analysis this morning highlights why the landscape isn't getting any easier for OPEC and Russia as they head into their early December summit.

The big picture: "The hefty supply cushion that is likely to build up during the first half of next year will offer cold comfort to OPEC+ ministers gathering in Vienna at the start of next month," IEA said in its closely watched monthly report.

  • It also notes that "OPEC+ countries face a major challenge in 2020 as demand for their crude is expected to fall sharply."
  • The report also points out that U.S. supply is still growing, albeit more slowly, and "significant contributions are expected from Brazil, Norway and newcomer Guyana."

Where it stands: The current OPEC+ agreement, which jointly curbs output by 1.2 million barrels per day, extends through March of 2020.

  • The Wall Street Journal reported earlier this week that OPEC+ (that is, OPEC, Russia and several allied producers) appears set to continue the current deal through 2020.

Go deeper: OPEC+ faces 'major challenge' from competitors' surging output: IEA (Reuters)

5. EV numbers of the day: 130 and 200

130: That's the number of electric buses that the Los Angeles Department of Transportation announced it has ordered from the manufacturer BYD.

  • Why it matters: Per BYD, a Chinese firm with U.S. operations, it's the "largest single order of battery electric buses to date in the United States."
  • The big picture: "This move to switch a considerable portion of its bus fleet to electric power is part of LA's broader goal to make its entire fleet zero-emission by 2030," CNET reports.

200: That's the number of electric vehicles that Lyft is deploying in Denver in its rental program for drivers.

  • Why it matters: The ride-hailing company's announcement calls it their "largest single deployment of EVs to date."
  • Go deeper: Engadget has more.
Ben GemanAmy Harder