Mar 1, 2019

Axios Generate

Ben Geman

Happy Friday!

And happy birthday to The Who's Roger Daltrey, who brings us into the weekend...

1 big thing: The climate change candidate

Illustration: Sarah Grillo/Axios

Washington State Gov. Jay Inslee jumped into the 2020 White House race Friday — and his longshot candidacy will test a big question: whether there's a political opening for someone who puts climate change at the heart of their campaign.

Why it matters: Global warming has long been a second-tier topic in national elections, but Inslee's candidacy could change that if he somehow gains traction in the crowded Democratic field or pushes higher-profile candidates to emphasize climate topics even more.

  • "We’re the first generation to feel the sting of climate change. And we’re the last who can do something about it," Inslee said in a launch video this morning that emphasizes jobs and his decades of work on the topic.
  • "He is going to put climate as the clear number one issue. No major party candidate in American history has done that. The times demand that climate is the top priority because if it’s not, it’s not going to get done," says Jared Leopold, senior campaign adviser to Inslee.

Details: Inslee hasn't announced a lot of policy specifics yet, though one noteworthy thing is that he wants to kill the Senate filibuster. According to his campaign, Inslee's "climate mission" will rest on 4 big themes...

  1. Accelerate a transition to "100% clean energy" and net-zero emissions with plans targeting electricity, transportation, buildings, industry and agriculture.
  2. Creating "millions of good-paying jobs over the next 10 years" via investments in modern infrastructure and much more.
  3. "Fighting for environmental justice and economic inclusion," including work with low-income, indigenous and communities of color.
  4. "Ending fossil fuel giveaways" and moving away from fossil fuels while "protecting workers and diversifying the local economies that depend on them today."

The state of play: The case for Inslee's climate-focused candidacy is stronger than ever in some ways.

  • That's partly thanks to a spate of recent reports — notably a major UN scientific study last fall — on the risks of global warming, and partly because of aggressive White House efforts to dismantle federal climate policies.

Yes, but: Democratic strategist Adrienne Elrod said a campaign built around climate change may not create a wide enough "lane" and constituency.

  • "That’s not necessarily a reliable enough path because every Democratic candidate who is seriously running and is a top-tier contender is going to address climate change," said Elrod, who headed strategic communications for Hillary Clinton's 2016 run.

Go deeper:

2. Breaking down Tesla's Model 3 price move
Tesla store in Paramus, N.J. Photo: Michael Brochstein/SOPA Images/LightRocket via Getty Images

ICYMI last night, Tesla is finally launching that long-promised $35,000 Model 3, but to meet its target price, the company is closing all of its 378 stores worldwide, laying off retail employees and shifting all sales online.

Axios' Joann Muller breaks down the big move...

Why it matters: That $35,000 price tag enables CEO Elon Musk to fulfill his 2006 secret master plan to deliver a mass-market electric vehicle, but he told reporters last night "there's no other way" to produce it than by closing all its stores and eliminating jobs. Even so, he says the company won't be profitable this quarter.

What's happening: Shifting all of its sales online — plus other cost cuts — means Tesla can lower the price of its vehicles, including Models S and X, by about 6% and achieve the $35,000 Model 3 price point earlier than expected.

Details: Tesla is offering two new budget-priced Model 3s — a standard $35,000 model and a slightly upgraded $37,000 version — but they'll have smaller battery packs and won't travel as far as currently available versions of Model 3.

Read more

Editor's note: This piece was updated to remove the number of jobs impacted as Tesla declined to confirm or deny the estimates.

3. How the U.S. avoids Australia's power woes

U.S. critics of renewable energy and other climate-friendly policy often cite Australia’s woes — expensive and sometimes unreliable electricity — as evidence their arguments are sound, but that ignores one of America's most important natural resources, Axios' Amy Harder reports.

Driving the news: At a Capitol Hill event Wednesday opposing the Green New Deal, Rep. Paul Gosar (R-Ariz.), said "Aussies’ obsession with renewables has destroyed their electric grid. … Let’s learn from Australia’s mistakes, not repeat them."

  • America’s domestic market for natural gas, particularly in electricity, is far larger than the market in Australia, which exports most of its gas and remains overwhelmingly dependent upon coal for electricity. Domestic natural gas prices Down Under have risen sharply — another factor driving power prices up there.
  • The large amount of natural gas, which recently surpassed coal as America's biggest electricity source, entering the U.S. electricity system over the last several years acts as a sort of pillow for variable wind and solar resources.
  • Those variable wind and solar resources are another huge factor contributing to Australia’s high electricity prices and reliability problems, according to experts and an Australian government agency report. Others include expensive transmission networks, lack of sustained investment in new electricity capacity and inconsistent government policy.

Go deeper

4. A power giant's new face in D.C.

Phil Musser will be the new VP of government affairs for power giant NextEra Energy.

  • He'll be running the D.C. portfolio for the Florida-headquartered company that's the world's largest wind and solar project operator.
  • Musser, formerly of Boeing, will be an officer of company and report directly to CEO Jim Robo.
5. Lightning round: Shell, PG&E, EPA

Oil: Via the Financial Times, "Royal Dutch Shell warned on Friday that prosecutors in the Netherlands are preparing to issue criminal charges to the energy major over a controversial 2011 Nigerian oil deal worth $1.3bn."

Policy: The Senate yesterday voted 52-47, mostly along party lines, to confirm former coal lobbyist and current acting EPA Administrator Andrew Wheeler as formal head of the agency.

Nuclear power: Per Reuters, "A bipartisan group of U.S. lawmakers introduced legislation on Thursday to ensure congressional oversight of any civilian nuclear cooperation agreement between the United States and Saudi Arabia."

Utilities: "Pacific Gas & Electric said Thursday that its equipment had probably caused the Camp Fire, the catastrophic November blaze that destroyed thousands of homes in Paradise, Calif., and killed at least 86 people," the New York Times reports.

6. Making the new mobility a climate friend

New BMW-Daimler partnerships on autonomous tech and shared mobility show how big changes are looming — or underway — that are reshaping how people get around cities.

The intrigue: A piece of VC news caught my eye that's less splashy than huge automakers teaming up, but points to how new strategies and tech are needed to manage the rise of AVs, ride-sharing, electrification, dockless bikes and scooters, and other changes in urban mobility.

Driving the news: Remix, a cloud-based platform that helps cities plan and manage transportation, raised $15 million in Series B funding led by Energy Impact Partners, with participation from Sequoia Capital.

  • "As urban mobility transforms and electrifies, cities will gain enormous benefit from the Remix platform to ensure safety, efficiency and equitability for all citizens," said Energy Impact Partners' Lindsay Luger in announcing the money.

Why it matters: The environmental footprint of all these changes is kind of a wild card.

  • As we've written about before, absent oversight, autonomous vehicles and ride-sharing could lead to more congestion and siphon riders from mass-transit.
  • But the various changes could also help cut emissions — if managed right. Energy Impact Partners' Shayle Kann explores the topic further in a Medium post here.

Go deeper: How the future of commuting could cut emissions & travel time

Ben Geman