Apr 9, 2021

Axios Generate

Happy Friday. Today's Smart Brevity count is 1,091 words, 4 minutes.

🎶 And yesterday marked 30 years since Massive Attack released their debut album "Blue Lines," which provides today's amazing intro tune...

1 big thing: Climate is the century's investment story

Illustration: Aïda Amer/Axios

A successful global effort to slash carbon emissions demands huge investments to finance the unprecedented transformation of energy systems and related infrastructure — and it's a capital shift that's already well underway, Axios' Andrew Freedman and I report.

Why it matters: Private investment is already ramping up, and President Biden wants to spend hundreds of billions of dollars.

Independent experts say the spending that will be needed to achieve net-zero carbon emissions by 2050 — a goal now embraced by the U.S. and many other countries — would be on the scale of the industrial revolution.

  • "We believe very deeply that this is going to be the biggest economic transformation since the industrial revolution," said John Kerry, Biden's special climate envoy on climate change, during an event Wednesday.
  • Of note: Climate investments are among the "megatrends" Axios is highlighting this morning.

A few snapshots:

  • In 2020, the research firm BloombergNEF estimates that worldwide investment in renewables, electric vehicles and other tech under the overall "energy transition investment" umbrella already topped $500 billion.
  • Now, Biden is calling for a huge increase in his infrastructure package. ClearView Energy Partners estimates that the "energy relevant" portions of the package could cost as much as $584 billion in the coming years. (And the White House has said its summary doesn't count the costs of the plan's new and expanded tax credits for clean energy.)
  • The private sector is already making huge investments of its own. For instance, General Motors is investing $27 billion through 2025 on the development of electric vehicles and autonomous tech.

The big picture: Avoiding the worst dangers of climate change will not be cheap. It means rapidly decarbonizing power, mobility, industrial processes and more — enough to cut emissions sharply this decade en route to net zero emissions by 2050.

Threat level: Investments to date, while growing, have not begun putting the world on a path toward steep emissions cuts needed to meet the goals of the Paris Agreement.

Read more

Bonus chart: Investment needed for deep CO2 cuts
Expand chart
Data: International Energy Agency; Chart: Will Chase/Axios

International Energy Agency estimates help to provide a sense of the investments needed to sharply cut global CO2 emissions.

Where it stands: Take solar, which is among the many technologies needed to drive large CO2 cuts.

The chart above estimates deployment this decade under current and announced policies worldwide (the "stated policies" case) vs. scenarios consistent with steep CO2 cuts by midcentury.

Why it matters: Investment needs for various clean energy sources rise to achieve that increased deployment.

Under their "sustainable development scenario," annual investment in clean energy tech and energy efficiency over the next decade is $550 billion above what's projected under current policies.

2. Big players back distributed energy management startup

Illustration: Eniola Odetunde/Axios

SHYFT Power Solutions, which helps optimize the performance of distributed energy systems, has completed a $3.8 million seed funding round led by SoftBank Vision Fund’s Emerge Program and oil giant Total's VC arm.

The big picture: It's focused on helping make decentralized clean energy — like solar and batteries — provide commercial, small-scale industrial and residential power in regions with inadequate electricity access.

The initial market for SHYFT, spun out of Stanford University, is Nigeria, where it already has multiple clients. It's also planning expansion to other markets as it adds staff in West Africa.

Why it matters: Expanding access to reliable but also clean electricity is important for improving living standards and economies in developing countries while avoiding major growth of emissions-intensive fossil sources.

How it works: SHYFT's digital platform and services — usable with mobile and web applications — create an "integrated approach that uses algorithms to monitor, automate, and optimize" decentralized energy.

It makes distributed systems more cost-effective and reduces maintenance costs and downtime, SHYFT said.

What they're saying: "As a Nigerian-American with previous experience in infrastructure, I recognized that emerging markets have a unique opportunity to leapfrog over centralized grids and leverage advancements in clean, reliable and affordable alternatives to meet energy needs and at times work alongside centralized grids too," CEO and co-founder Ugwem Eneyo said in a statement.

3. More VC: Emissions monitoring and electric boats

The remote monitoring and communications startup Andium just raised $15 million in Series A funding in a round led by OGCI Climate Investments.

  • That's the VC arm of the Oil and Gas Climate Initiative, a group of several of the world's largest oil companies.

Why it matters: The tech can help monitor and reduce methane emissions, the announcement states. TechCrunch has more.

Meanwhile, Bloomberg reports: "Stockholm-based X Shore raised 15 million euros ($18 million) from investors to scale up production of its battery-powered leisure boat to tap into the growing market for environmentally friendly luxury marine rides."

Editor's note: This story has been corrected to show that Andium raised $15 million.

4. Climate change will lead to an unstable future

Illustration: Sarah Grillo/Axios

Andrew Freedman reports...Climate change will lead to a less secure, more crisis-prone world that will strain global institutions, according to a major national security assessment released Thursday.

Driving the news: The “Global Trends Report,” produced every four years by the National Intelligence Council, spotlights climate among the main structural forces shaping the next two decades.

The big picture: Global warming, along with disease outbreaks, financial crises and other forces, will test the “resilience and adaptability” of the international system.

There are reasons to believe that many systems large and small may fail under the increased stress.

What they're saying: "Climate change will increasingly exacerbate risks to human and national security and force states to make hard choices and tradeoffs," the report states.

  • "The burdens will be unevenly distributed, heightening competition, contributing to instability, straining military readiness, and encouraging political movements."

Quick take: This is not your typical grim climate report projecting disaster in the year 2100, i.e. the distant future.

  • Instead, the climate change we will see through midcentury is already baked into the climate system, thanks to how the oceans absorb and redistribute heat.

Reality check: One lesson of the COVID-19 pandemic is that while we plan for major threats, they still contain many surprises.

  • Previous editions of this report had considered pandemics, but they did not accurately capture the complexities and far-reaching impacts of COVID-19.
  • It’s discomforting to think we may not be fully understanding or planning for how far-reaching climate change’s reverberations may be felt, but that's likely the case.

Read more

5. Catch up fast: Bitcoin, BlackRock, Saudi Arabia

Climate: "China's electricity-hungry bitcoin mines that power nearly 80 percent of the global trade in cryptocurrencies risk undercutting the country's climate goals, a study in the journal Nature said." (AFP)

Investing: "Investors plowed $1.25 billion into the BlackRock U.S. Carbon Transition Readiness ETF, making it the biggest launch in the ETF industry’s three-decade history." (Bloomberg)

Solar: "Saudi Arabia has signed power purchase agreements with seven new solar projects that will provide electricity [to] more than 600,000 households, state news agency SPA quoted Crown Prince Mohammed bin Salman as saying on Thursday." (Reuters)

6. Quote of the day
"I think we are going to say goodbye to a few of the traditional car companies that just won’t even be there in 10 years."

Who said it: Henrik Fisker, CEO of the electric vehicle company that bears his name, in a terrific new Wall Street Journal video explainer on EV startups.

Yes, but: Established automakers, as the WSJ notes, are pouring huge resources into EVs, while Fisker and other featured startups have yet to begin commercial production.