Axios Generate

A green lightbulb.
May 05, 2021

Good morning! Today's Smart Brevity count is 1,095 words, 4 minutes.

🚨 Situational awareness: "The White House has signaled privately to lawmakers and stakeholders in recent weeks that it supports taxpayer subsidies to keep existing nuclear facilities from closing, bending to the reality that it needs these plants to meet U.S. climate goals." (Reuters)

🎶 Axios data journalism wiz Sara Wise notes this month marks 20 years since Destiny's Child dropped the iconic album "Survivor," which provides today's intro tune...

1 big thing: The supply crunch that could slow the climate fight

Data: IEA; Chart: Sara Wise/Axios
Data: IEA; Chart: Sara Wise/Axios

Soaring amounts of key minerals used in clean energy tech are needed to fight climate change, but costs and supply risks could create big headwinds, a new International Energy Agency analysis finds.

Why it matters: "Today’s mineral supply and investment plans fall short of what is needed to transform the energy sector, raising the risk of delayed or more expensive energy transitions," IEA warns.

The big picture: Growth in solar and wind, electric vehicles, stationary battery storage and other grid technologies will require much more lithium, cobalt, nickel, copper, graphite, rare earth elements and more.

  • That's especially true for clean tech deployment on a scale consistent with the goals of the Paris climate deal.
  • Though it varies by mineral, aggregate demand quadruples over two decades in IEA's "Sustainable Development Scenario." That's an energy system model that keeps temperature rise well below 2°C.
  • But new supply projects have a considerable time lag and are often accompanied by price volatility.

The intrigue: "An even faster transition, to hit net-zero [emissions] globally by 2050, would require six times more mineral inputs in 2040 than today," IEA finds.

Threat level: Rapid scale-up of clean energy could face "huge questions" about commodity reliability, availability and prices that could slow cost declines and create bottlenecks.

  • For instance, a doubling of lithium and nickel costs could offset all projected cost declines from a doubling of battery production.
  • "[I]n a scenario consistent with climate goals, expected supply from existing mines and projects under construction is estimated to meet only half of projected lithium and cobalt requirements and 80% of copper needs by 2030," IEA said.

What's next: The report offers recommendations for bolstering supply and reliability while addressing the environmental footprint of mining.

  • Some of it is chicken and egg — "strong signals" from policymakers about tackling climate change will drive supply investment.
  • IEA also calls for enhanced R&D to help use materials more efficiently and find substitutes.
  • The report also recommends more efforts around recycling and stronger environmental and human rights standards that reward responsible suppliers.

Bonus: the geopolitics of energy materials

Data: IEA; Chart: Sara Wise/Axios
Data: IEA; Chart: Sara Wise/Axios

Another part of the new IEA report shows the geographic concentration of mineral production (pictured above) and processing — as you can see it's very different than fossil fuel distribution.

Why it matters: "High levels of concentration, compounded by complex supply chains, increase the risks that could arise from physical disruption, trade restrictions or other developments in major producing countries," IEA notes.

What they're saying: The report recommends steps around supply chain diversification and new development in countries with untapped resources.

Another idea: "Voluntary strategic stockpiling can in some cases help countries weather short-term supply disruptions." Bloomberg has more.

2. America’s new climate "normals" are abnormal

Maps of temperatures across the United States.
How the new climate normals (1991-2020) compare to the previous normals, relative to the 20th century average. (Climate.gov/NCEI)

As global warming continues, decadal temperatures keep setting new records, and the very concept of abnormality is taking on a growing tinge of surreal normalcy.

Why it matters: This may not be a good thing when it comes to spurring climate action.

Catch up fast: It came as no surprise Monday that, when the National Oceanic and Atmospheric Administration (NOAA) released its updated 30-year climate “normals,” they showed stark warming compared to the prior 30-year period, which ended in 2010.

Of note:

  • The country is getting much milder on average, particularly in the Northeast, Mid-Atlantic, Florida and the West.
  • Much of the nation is getting wetter, too, with rainfall coming in more sporadic, heavy bursts.
  • But the West is getting hotter and drier, a bad combination for water resources and wildfires.
  • Since the 1901-1930 period, the Lower 48 states have warmed by 1.7 degrees Fahrenheit (about 1 Celsius), with the fastest warming since 1970.

Our thought bubble: Updating climate normals every 10 years helps farmers and infrastructure planners keep pace with rapidly shifting odds of certain floods, heat extremes and other threats.

However, it can dull our perception of just how out of whack the climate is becoming.

  • We’re a bit like the frog gradually boiling in a tub of water, normalizing climate trends too quickly.
  • It's called “shifting baseline syndrome,” and it applies beyond climate change, too.

What they’re saying: Some climate scientists, such as Penn State's Michael Mann, think the 30-year climate reference period should be fixed to better convey climate change’s influences. (NASA, for example, uses a constant reference period of 1951-1980 for its climate reporting.)

  • Mann told the AP that updating the 30-year normals every decade "perverts the meaning of ‘normal’ and ‘normalizes’ away climate change."

Go deeper: For more details on the new normals, see this Washington Post story.

3. A coal power inflection point

New analysis from the firm Energy Innovation finds that building new U.S. wind and solar power generation is very often more cost-effective than continuing to run existing coal-fired power plants.

The big picture: "[Seventy-two] percent of existing U.S. coal capacity and 80 percent of existing U.S. coal plants are either more costly to continue operating compared to building new nearby wind or solar plants, or are slated to retire in the next four years," a summary of the "coal crossover" report notes.

Overall, the firm finds that 182 coal plants are uneconomic or slated to shut down in the next half-decade.

The intrigue: New wind and solar projects currently receive federal tax credits, so we wondered how much of new wind and solar's economic edge relies on those incentives.

  • Co-author Eric Gimon, in an email, notes that their analysis found that of those 182 coal plants, 45-50 would be "economic" in their analysis absent those renewables tax credits.

Yes, but: He added that it's likely that "every plant in the data set would fail our economic filter if the full cost of heath impacts and GHG emissions was factored in."

"I suspect that as time goes on, federal subsidies will have less and less impact (as they diminish and renewables continue to get cheaper) on the energy-cost comparison between coal and renewables," Gimon notes.

4. Two climate finance things: BlackRock and Texas

Illustration of two hundred dollar bills shaped like billowing smoke stacks
Illustration: Sarah Grillo/Axios

Via Bloomberg, "BlackRock Inc. disclosed that over the first three months of the year, it voted for a majority of shareholder proposals advocating sustainability-related changes at the companies whose shares it holds.

  • Why it matters: BlackRock is a huge investor and influential actor in the finance industry's broader posture on climate change.
  • Yes, but: The piece adds that with "key votes looming at major polluters" including Exxon, "activists say that the firm’s true climate commitments haven’t yet been tested."

Speaking of the finance sector and climate, Pensions & Investments reports...

"The Texas House passed a bill that would require the state's pension funds to stop investing in firms that plan to divest in some form from fossil-fuel companies."

The Texas Senate easily approved the bill last month, but a spokeswoman for Gov. Greg Abbott did not say whether he'd sign it, the story states.

5. Quote of the day

"[T]he Biden administration has quietly retired the notion of an 'all of the above' strategy, a (largely rhetorical) commitment to favor all fuels."

Who said it: Nikos Tsafos, an energy expert with the Center for Strategic Studies, as part of its wider look on President Biden's first 100 days.

Why it matters: His comments underscore the shift from the Obama era when White House officials voiced support for the domestic oil-and-gas boom.