Mar 22, 2019

Axios Generate

Happy Friday! First things first: I garbled one of Jay Inslee's quotes yesterday. His comment about his Chevy Bolt electric vehicle wasn't actually gibberish. The correct version is here.

Axios' Amy Harder joined Off The Charts, the podcast from the University of Chicago's Energy Policy Institute, to discuss the evolution of climate change press coverage. Listen here and read her column on the topic.

And onto music: Today marks the 1965 release date of Bob Dylan's "Bringing It All Back Home," so we'll head into the weekend with this beautiful song...

1 big thing: How EVs force automakers to play nice

Illustration: Lazaro Gamio/Axios

The emergence of electric vehicles, automated tech and ride-sharing has prompted a wave of corporate partnerships and joint ventures in the auto industry as big players seek their footing in the evolving market.

Why it matters: It's a sign that big legacy companies like GM, Ford and Volkswagen see the need to find technical expertise outside their own walls, and maximize resources as they make costly new investments.

  • Partnerships with battery companies also highlight the drive to ensure the supplies and tech needed to compete as EVs, now a tiny slice of sales, grow in the future.

Driving the news: Yesterday VW and the Swedish battery company Northvolt said they'll lead a new industry R&D consortium called the European Battery Union. The other companies aren't public yet.

Where it stands: It's the latest of many moves in recent months and years, such as...

  • Ford and VW are exploring collaboration on EV and AV tech, the companies said in January when announcing a partnership on commercial vehicles.
  • BMW and Daimler announced a series of joint ventures on urban mobility in late February.
  • GM and Honda unveiled a collaboration on battery development in mid-2018.
  • Toyota and Panasonic created a joint venture in January to develop EV batteries.
“Established companies are trying to figure out what their future is and what they want their future to be, and how they can remain relevant.”
— Valerie Sathe Brugeman, assistant director for transportation systems, Center for Automotive Research.

The big picture: Mark Muro of the Brookings Institution, who analyzes industrial transitions, said such collaborations occur at times of upheaval in different industries, such as semiconductors.

  • "The shift from a gasoline/analogue tech platform to an electrical/digital one amounts to a sea-change in the auto sector, and is necessitating the formation of new relationships," he said in an email.

The intrigue: That also means, in addition to corporate giants teaming up, they're increasing work with tech startups and sometimes acquiring them outright.

Between the lines: Auto industry partnerships are hardly new, but "collaborations are accelerating," according to Autotrader analyst Michelle Krebs.

  • One big reason? The high cost of developing EV and AV tech. “It is so expensive. Nobody knows when there is going to be a return on these investments or when these technologies will really take off,” she said.

Go deeper

Editor's note: This piece was updated to reflect Valerie Sathe Brugeman's title change to assistant director for transportation systems.

2. "Cause for alarm" on global fuel economy
"The reduction of the average fuel consumption per kilometre slowed down in advanced economies to only 0.2% per year, on average, between 2015 and 2017, with more than 20 countries experiencing a reversal in the evolution of their fuel economy."

That's a big takeaway from a Global Fuel Economy Initiative (GFEI) report released via the International Energy Agency this week.

By the numbers: Worldwide, the average fuel economy improvement rate slowed to 1.4% per year between 2015 and 2017, although the gains in emerging economies were higher.

Why it matters: It's nowhere near the GFEI target of 3.7% annual improvements in order to help control CO2 emissions. And IEA chief Fatih Birol, in a statement alongside the report, called the overall slowdown "cause for alarm."

  • "Improving vehicle fuel efficiency saves money, cuts carbon emissions while also reducing harmful air pollution and boosting energy security," he said.
  • There are several forces driving the trends, including the increase in consumers' appetite for SUVs and pickups.

Go deeper: IEA has a cool interactive tool to track vehicle sales, efficiency and other data across 18 major auto markets including that in the U.S.

3. When crude trading meets emerging tech

This Bloomberg story is wild. It looks at what happens when the thirst for information in the huge and lucrative oil trading market meets the emergence of new tech.

In this case, that means increased availability of geolocation data that opens a real-time window onto refinery maintenance or accidents that affect their crude demand.

Why it matters: "[T]raders can gain insight into refinery operations by tracking the number of mobile phones at the plant, a proxy for the arrival of support crews," Aron Clark reports.

How it works: "One company mining this information is Orbital Insight Inc., which uses mobile phone geolocation data — providing the times and locations for individual devices — to track staffing changes," the story states.

  • Per Bloomberg, the company says it can track location data for over 800 million mobile devices. The California-based company also tracks global oil stockpiles via satellite, they note.
4. The first climate treaty turns 25
Illustration: Aïda Amer/Axios

Yesterday marked 25 years since the United Nations' Framework Convention on Climate Change entered into force.

Why it matters: The deal struck in Rio de Janeiro laid the foundation for negotiations — lots of negotiations — that ultimately produced the 2015 Paris climate agreement.

The big picture: Assessing the whole UNFCCC is more than I'll bite off here. But few would argue that the ambition in Rio is translating into policy steps anywhere near commensurate with the problem.

  • The treaty called for "stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic human-induced interference with the climate system."

By the numbers: The average concentration of atmospheric carbon dioxide in 1994 was 359 parts per million, per National Oceanic and Atmospheric Administration records.

  • Last year the average was 409 ppm, and now it's even higher.
  • 2018 was the 4th-warmest year in modern temperature records that date back to the late 1800s, per NOAA.
  • The last 5 years comprise the 5 warmest on record, according to multiple datasets, and 9 of the top 10 have occurred since 2005.
  • Global CO2 emissions rose in 2017 and 2018, ending a 3-year plateau.

But, but, but: Diplomacy and negotiations under the UNFCCC have also led to greater global collaboration on confronting climate change and at least agreeing to what the goals should be.

The Paris deal aims to prevent global temperatures from rising 2 degrees Celsius above pre-industrial levels, with an aspirational target of holding the rise to 1.5°C.

  • That would require extremely steep emissions cuts in the coming years and decades, and right now hitting even the 2°C target looks unlikely.
  • However, the structure of the non-binding Paris deal aims for countries lay out more ambitious emissions plans.

What they're saying: Patricia Espinosa, the top UN climate official, said in a statement marking the birthday that there have been successes and disappointments.

  • "We have the Paris Agreement, and we have the guidelines strengthening that agreement. What we need now are results," she said, calling for more ambition and action to stabilize temperatures.

The bottom line: Major studies conclude that global warming is already having harmful effects worldwide that are expected to worsen as temperatures rise.

Go deeper: Key global warming target slipping out of reach, UN scientists warn

5. Two trouble signs for the Green New Deal

Two stories yesterday caught my eye that lay out some of the challenges facing the sweeping concept...

On Capitol Hill, E&E News looks at how the Green New Deal hasn't snagged another Senate co-sponsor beyond the 11 who joined Sen. Ed Markey in the Feb. 7 rollout.

  • They also point out that House additions to the co-sponsorship list have slowed.
  • "With the low-hanging fruit of early admirers now plucked, all that remains are the tougher branches," Mark K. Matthews and Adam Aton write.
  • What's next: They note that Democratic Sen. Chris Van Hollen plans to sign on, but he's coupling that support with introduction of his "cap and dividend" bill.
  • "His conditional support is emblematic of where things stand in the ongoing effort by environmental activists to recruit more congressional co-sponsors for a symbolic resolution in support of the Green New Deal," they report.

And Reuters reports that renewable energy industry officials are keeping their distance from it, "calling it unrealistic and too politically divisive for an industry keen to grow in both red and blue states."