Jul 2, 2019

Axios Generate

By Ben Geman
Ben GemanAmy Harder

Good morning! Today's Smart Brevity count: 1,219 words, < 5 minute read.

Today also marks 40 years since Neil Young released "Rust Never Sleeps," so we'll head into the news with so much left undone...

1 big thing: Power plants could push warming target beyond reach
Expand chart
Reproduced from Tong et. al, 2019, "Committed emissions from existing energy infrastructure jeopardize1.5°C climate target"; Chart: Axios Visuals

A new study finds that existing energy infrastructure — notably via power plants — is slated to produce enough carbon emissions over its lifetime to send global temperatures more than 1.5°C above preindustrial levels.

Why it matters: A major scientific report last year showed that warming will have far more severe consequences if temperature increases are allowed to creep past 1.5°C.

  • Holding the rise to that level is a key but immensely hard goal of the Paris climate deal.
  • Per the IPCC, it would mean emissions falling to net-zero by roughly mid-century.

What they did: The new paper in the peer-reviewed journal Nature compares future emissions from infrastructure — power plants, vehicles, industrial plants and more — against the estimated remaining "carbon budget" for staying within 1.5°C and 2°C.

What they found: Projected cumulative emissions from existing infrastructure, roughly 658 gigatonnes, are much higher than the estimated remaining 1.5°C budget.

That's what you can see in the chart above. It shows that even expected lifetime CO2 from infrastructure and vehicles already in use are enough to surpass 1.5°C of warming.

  • “There’s a lot of aspirational talk about the 1.5 target, and I think that’s all good, but there are some sobering realities if we wanted to meet that target,” co-author Steven Davis of UC Irvine tells me.
  • A substantial amount of these "committed" future emissions are from relatively young coal-fired power fleets in China and India.
  • Davis notes the findings are conservative. The paper doesn't include emissions from fossil fuel extraction and deforestation.

The bottom line: Any shot at 1.5°C likely means shutting down lots of power plants before the end of their roughly 40-year lifetimes.

  • "[U]nless compensated by negative emissions technologies or retrofitted with carbon capture and storage, 1.5 °C carbon budgets allow for no new emitting infrastructure and require substantial changes to the lifetime or operation of already existing energy infrastructure," the paper states.

Threat level: Additional emissions from power plants that are planned or under construction already make staying within 2°C (the less ambitious Paris target) difficult to achieve.

  • Emissions from existing infrastructure and proposed plants could consume two-thirds of the emissions budget for staying within 2°C, the report states.

What they're saying: Rutgers University climate scientist Robert Kopp, who was not part of the study, tells me the results are consistent with what's expected from energy forecast models, but notes the paper is "based on empirical data analyzed in a fairly transparent fashion."

"It emphasizes the radical transformations necessary to stabilize global temperature in the 1.5-2.0°C range: basically, an end to new construction of fossil fuel-based electric and industrial infrastructure, and — especially for 1.5°C — an acceleration of the retirement of existing infrastructure."
— Robert Kopp
2. Return of the Aramco IPO

Bloomberg reports this morning ... "Saudi Arabia is restarting preparations for a potential initial public offering of oil giant Aramco, months after putting the planned listing on hold, people familiar with the matter said.

Why it matters: An IPO of the state-owned oil behemoth would likely be the largest in history — if it ever happens. But that's a big if.

The big picture: A sale of a slice of the company, initially slated for 2018, is aimed at raising tens of billions of dollars to help diversify the kingdom's crude-reliant economy.

  • But it has been beset with delays, indecision about the listing venue, and questions about the Saudis' appetite for the transparency that comes with going public. And their hoped-for $2 trillion valuation is a big stretch too.

* * *

Speaking of oil, Reuters reports that "OPEC and its allies led by Russia agreed to extend oil output cuts until March 2020 on Tuesday seeking to prop up the price of crude as the global economy weakens and U.S. production soars."

3. The next frontier for expanding power access
Electric wires in Abidjan, Ivory Coast. Photo: Sia Kambou/AFP/Getty Images

Axios Expert Voices contributor Todd Moss writes ... Progress continues to be made on global energy access, with the latest report from the International Energy Agency finding that 89% of the world’s population is connected to electricity.

The big picture: These impressive, rapid gains have kept the world on track toward the UN’s Sustainable Development Goal 7 (SDG7): modern energy access for all by 2030.

  • However, as household access improves, the agenda to combat energy poverty is shifting to affordable and reliable access for business.

Where it stands: The number of people living without electricity has dropped from 1.2 billion in 2010 to 840 million in 2017.

  • Kenya and Bangladesh made the fastest progress over the past 8 years, driven by aggressive government investments in last-mile connections.
  • The greatest challenges will soon be limited to sub-Saharan Africa, where 90% of the world’s 650 million people still without electricity access are expected to live in 2030, according to the report's projections.

But, but, but. Residential electricity accounts for only 5% of global energy consumption.

  • Electricity at home has benefits, but impact studies from India and Kenya show that neither off-grid solar home systems nor on-grid connections for the very poor increase incomes.
  • Meanwhile, many middle-income countries at or near universal access still suffer from dysfunctional power systems. Business surveys across Asia and Africa frequently cite high energy costs and unreliable power among the greatest constraints to business productivity and, by extension, job creation.

Read more

Moss is executive director of the Energy for Growth Hub and a visiting fellow at the Center for Global Development.

4. On the record with the CEO of Southern Co.

Tom Fanning, CEO of Southern Company, one of America’s biggest utility companies, sat down with Axios' Amy Harder at last week’s Aspen Ideas Festival in Colorado.

Here's part of what Fanning discussed with Amy...

On carbon taxes: "If your objective is to put a price on carbon to manipulate carbon I don’t think that makes sense. If somebody says to me, ‘We have a gigantic federal deficit, and we need to raise taxes.’ Does a carbon tax make sense? Yeah I’d be more amenable to that conversation. That means I’m going to tax something in order to raise revenue. Taxing something to change behavior, there’s better ways to do that."

On renewables, which have grown from 1% of Southern’s mix in 2007 to 11% in 2018 (with much of that being solar): Fanning predicts renewables to reach 50% or higher by 2050.

  • In response to a comment that environmentalists have been pushing far more aggressive goals, Fanning replied: "Maybe we will get to 80% renewables. If you’re going to go that far you’re going to have to have significant storage technology."
5. Luxury EV startup snags ex-Tesla exec

Lucid Motors, the luxury EV startup with Saudi backing, has brought on a former high-level Tesla executive as it prepares to launch production at an Arizona plant next year.

Driving the news: California-based Lucid said Monday that Peter Hochholdinger has joined the company as VP of manufacturing. He will oversee both manufacturing production and engineering.

Why it matters: TechCrunch points out, "Lucid will need the kind of institutional knowledge Hochholdinger gained over his career as it moves toward its first production vehicle, the Lucid Air, as well as future models."

Context: Hochholdinger, who was Tesla's VP of production, left last month after 3 years with the company. Prior to Tesla he spent 24 years with Audi, becoming senior production director for several models. More details...

  • Lucid CEO Peter Rawlinson is also a Tesla alum.
  • Saudi Arabia's sovereign wealth fund last year said it's investing over $1 billion in the company.
  • Production of the Lucid Air luxury sedan is slated to launch next year in Casa Grande, Arizona.

Go deeper: Potential Tesla rival Lucid Motors makes its move

Ben GemanAmy Harder