Good morning, D.C. readers: You're invited to an Infrastructure Week edition of News Shapers, tomorrow at 8am.
- Join Axios' Mike Allen for a series of conversations focused on infrastructure in America. Minority Leader Kevin McCarthy, Majority Whip James Clyburn, Massachusetts Gov. Charlie Baker and Boston Mayor Marty Walsh will join Mike onstage. RSVP here
1 big thing: New CEO push on climate policy
A new coalition of more than a dozen major corporations and environmental groups is launching today to urge Congress to pass legislation addressing climate change.
Driving the news: The initiative, called the CEO Climate Dialogue, features CEOs from oil giants BP and Royal Dutch Shell, as well as from companies across the economy including Citi, Dominion Energy and Ford.
- The Nature Conservancy and the Environmental Defense Fund are among the environmental groups that helped convene the group.
The big picture: This is the latest sign that the political window for Washington to seriously consider comprehensive climate legislation is opening again after a decade of being closed.
- This is occurring against an unlikely backdrop because President Trump dismisses climate change as a problem and Republicans control the Senate.
- Whether the window actually opens is highly dependent on if a Democrat wins the presidency in 2020.
One level deeper: The coalition is laying out 6 principles they hope will guide lawmakers in passing big climate policy. The aim is to be less prescriptive than other corporate-led efforts, namely the Climate Leadership Council, whose members include some of the same companies and are pushing a carbon tax whose revenue is sent back to consumers.
- The biggest principle is a price on carbon dioxide emissions across the U.S. economy that achieves at least 80% reduction in emissions by 2050.
- That’s similar to what the Obama administration once proposed, but it’s less aggressive than what backers of the Green New Deal want, which is net zero emissions as soon as 2030 but well before 2050.
What they’re saying:
- “We believe it’s time for the president and Congress to put in place long-term federal policy,” said Jamie Gentoso, CEO for U.S. Cement operations at LafargeHolcim. “Whether or not you believe in climate change, everybody needs to be responsible.”
- Gentoso, whose organization has invested in a company that uses captured CO2 emissions to make cement, says she’s “hopeful these are not things that will be additional costs for us, but actually open up new markets.”
What we’re watching: Whether the coalition will be mainly more rhetoric or actually move the needle. Precedent suggests the latter.
Flashback: The coalition is bringing on the Meridian Institute to help facilitate strategy.
- That’s the same nonprofit that helped coordinate the last major corporate coalition that heavily influenced the last comprehensive climate policy Congress considered over a decade ago.
- It dissolved after efforts failed in 2010.
2. Bonus: Corporations not backing Trump on climate
That's the headline of my very first Harder Line column here at Axios, more than two years ago, which foreshadowed many of the moves we've seen since, like the one we're reporting on this morning.
3. Buses and China dominate projected EV boom
By 2040, roughly two-thirds of buses worldwide will be electrified and sales of cars and light-duty commercial vehicles are likely to be more than 50% electric, according to the latest research from BloombergNEF.
What they’re saying: Colin McKerracher, head of advanced transport for BNEF, says in a statement: “We see a real possibility that global sales of conventional passenger cars have already passed their peak.”
Yes, but: BNEF tends to be on the more aggressive side with their forecasts. This one also makes some assumptions that are uncertain with Trump in office and Republicans controlling at least one chamber of Congress.
- The forecasts assumes a federal subsidy remains intact and that California retains its legal right to issue stricter standards, which Trump is attempting to do away with while rolling back federal efficiency standards (BNEF doesn’t assume those standards are met).
The big picture: China is dominating in electric cars — like it is in nearly all energy technologies. Jack Barkenbus, a visiting scholar at Vanderbilt University, wrote in The Conversation:
“China's electric car market is growing much faster than electric vehicle sales in Europe, the United States, Japan and the rest of the world combined.”
4. How climate policy could flare up in trade
The Atlantic Council's David Livingston writes for Axios Expert Voices ... In a recent speech, French President Emmanuel Macron raised a proposal for an EU–wide carbon “tariff” on goods coming into the bloc from countries without a price on carbon.
Why it matters: The plan could prompt other countries to adopt carbon pricing in part to avoid disadvantaging their goods and services.
- In the best case, it could lead to a rapid increase in the amount of global emissions exposed to a carbon price, without creating excessively harmful economic distortions.
The catch: Border adjustments are delicate mechanisms, and will have to be designed with the game theory of other countries' likely responses in mind.
- In the worst case, such a charge might be contested before the World Trade Organization.
Where it stands: The system Macron discussed would be incredibly complex and could take years to develop. But one thing is sure: Efforts by various countries to advance a "green" industrial policy, in all its forms, are only set to expand.
What to watch: Although climate change is polling as an increasingly important issue for both Democratic and Republican voters ahead of next year's U.S. presidential elections, candidates have said relatively little about the intersections of climate and trade policy.
Livingston is the deputy director for climate and advanced energy at the Atlantic Council Global Energy Center.
5. Lightning round: utility goal, oil demand, Gulf woes
Utility promise: Continuing a trend in the power sector, Wisconsin utility pledges net zero carbon energy by 2050, the Wisconsin State Journal reports.
- Of note: Coal generated more than 52% of its electricity sales last year, and renewable power accounted for just 10.5% of the total, per the journal.
IEA forecast: The International Energy Agency cut projected oil demand for the first quarter, but added there may be market tightening on Iran, per Bloomberg.
- What's next: “Even so, slower demand growth is likely to be short-lived, as we believe that the pace will pick up during the rest of the year.”
Middle East tensions: Amid escalating tensions in the Gulf over oil-infrastructure attacks, both Iran and the U.S. said yesterday "they were not looking for a war, even as the threats and counterthreats continued," the NYT reports.
- One level deeper: The Eurasia Group said in a research note yesterday, "A military conflagration in the region remains unlikely because the U.S. has not been targeted, the attacks lack direct links to an Iranian source, and Saudi Arabia and the UAE are not seeking a confrontation."
Australia suit: "A group of indigenous Australians have brought a legal complaint against the Australian government for violating their human rights by contributing to climate change," Climate Liability News reports.
- Why it matters: This is considered the first legal action worldwide brought by low-lying islands against a nation state.