Jun 1, 2020

Axios Generate

Morning. It's another day where "good" doesn't make sense after a tumultuous weekend in our country.

My latest column looks to distill a lot of commentary comparing climate change and the coronavirus. I'll share that, and then Ben Geman will get you up to speed on other news.

Today's Smart Brevity count: 1,181 words, 4.5 minutes.

1 big thing: Your guide to comparing climate and COVID-19

Illustration: Eniola Odetunde/Axios

Climate change and the coronavirus have a lot more in common than the letter C, but their differences explain society’s divergent responses to each.

Why it matters: The internet is full of comparisons, some from biased perspectives. I'm going to try to cut through the noise to help discerning readers looking for objective information.

Here are some of the more common comparisons made on climate change and the coronavirus over the last few months and corresponding reality checks. Click here to get the full reasons why.

Comparison: Pandemics and climate change are both massive risks that much of the world is ignoring or downplaying.

  • Reality check: True.

Comparison: They’re both existential crises of our time.

  • Reality check: Partially true. The pandemic will define our generation uniquely, while climate change will wear on for many.

Comparison: The coronavirus is climate change on warp speed.

Comparison: They both threaten our public health.

  • Reality check: True. But the coronavirus could kill someone within two weeks, while climate change does it more slowly and in a more indirect fashion.

Comparison: Scientists have been sounding the alarm for years — even decades — that a pandemic like the coronavirus could devastate humanity, and also that unabated climate change would wreak havoc on the planet.

  • Reality check: True.

Comparison: The fact that the predictions from scientific modeling about the coronavirus didn't bear out weeks later shows why climate change models predicting vast ecological harm over decades should not be trusted.

  • Reality check: False. This argument, perpetuated by those who question the scientific consensus of climate change, are either purposefully or ignorantly misunderstanding how modeling works.

The bottom line: Coronavirus and climate change are both complex, terrible risks the world is facing today. Making them out to be more or less than what they are does a disservice to anyone looking for solutions.

2. Carbon pricing is growing overall...
Reproduced from World Bank Group; Chart: Axios Visuals

Carbon pricing via taxes and emissions trading systems are growing worldwide but confront a mix of old and new problems, a new World Bank report shows.

Driving the news: The share of global greenhouse gas emissions covered by some kind of pricing system is slated to reach an estimated 22% next year.

  • There are 61 initiatives in place or scheduled to kick in, the bank said in the report that tallies a suite of national and regional policies.
  • The report sees a bump in the share of emissions covered coming in large part from planned launch of China's national system.

Why it matters: Pricing is a favored tool among many climate advocates (and economists in particular) and multinational groups.

But, but, but: The annual study notes that the COVID-19 pandemic is creating headwinds. Some jurisdictions are delaying plans to strengthen their system and extending compliance deadlines, the report notes.

  • The pandemic is also causing problems for the UN-administered emissions system for airlines.
  • There's "increased uncertainty for the demand for international credits with airlines questioning the impact of COVID-19 on their offsetting obligations."

The big picture: Prices in most regions "remain substantially lower than those needed to be consistent with the Paris Agreement," the report finds.

  • It cites estimates that prices in the $40–$80 per ton of CO2 (rising to $50–$100 by 2030) are needed.
  • "As of today, less than 5 percent of GHG emissions currently covered by a carbon price are within this range," it notes, with pricing in most areas vastly lower.

But, but, but: Pricing systems also raise revenues for climate programs (and other goals) even if they're too low to directly influence industrial and consumer choices.

3. ...but has lost cachet domestically

Vox has an extensive look at emerging climate policy agreement among groups on the left heading into the 2020 election.

The big picture: "Though plenty of issues remain to be addressed, the broad left-of-center appears aligned around rapid decarbonization through stringent sector-specific standards, large-scale public investments, and a commitment to justice," David Roberts reports.

The intrigue: Generate regulars may know that national pricing wasn't getting much love in the earlier days of the Green New Deal debate or the Democratic primary.

  • It still isn't, Roberts notes, though it hasn't disappeared. "[F]or most climate types these days, the attitude toward pricing is: It would be helpful — and if it turns out to be possible, go for it — but it is neither necessary nor central to comprehensive climate policy."
  • It's a huge shift from 2009–2010, when a sweeping cap-and-trade plan was at the heart of Democratic climate legislation that passed the House but collapsed in the Senate.

What we're watching: Joe Biden's climate plan includes a vague nod to carbon pricing, noting "polluters must bear the full cost of the carbon pollution." But that's about all we know so far.

4. OPEC+ eyes extension of production cuts

OPEC+ members are in talks to lengthen current crude oil output curbs instead of loosening the restrictions as envisioned in their April agreement, per reports in Bloomberg and Reuters.

Driving the news: The OPEC+ group — which includes OPEC, Russia and allied producers — are eyeing an extension of the 9.7 million barrels per day production cut for one or two months, Reuters reported. Bloomberg notes it could be three.

  • Right now the cutbacks are slated to begin easing at the end of June, dropping to 7.7 million for the rest of the year.

The big picture: The formal cuts in the agreement are part of a much larger global decline in response to the pandemic that caused demand and prices to crater.

  • Demand has begun coming back and prices have rallied in recent weeks, but the market is still facing headwinds and lots of uncertainty.

What's next: The OPEC+ group's planned meeting next week could be moved up to this Thursday, per multiple reports.

5. Big players join forces for battery recycling

Illustration: Aïda Amer/Axios

Two European industrial firms this morning announced a joint venture to recycle battery materials and aluminum from electric vehicles in Norway, where EVs are gaining substantial market share.

Driving the news: The Swedish company Northvolt and the Norwegian aluminum giant Norsk Hydro plan to establish initial recycling operations next year.

  • The company also plans to have a "full-scale recycling plant" at the big battery factory it's building in Sweden.
  • Overall, Northvolt aims to source half its raw materials from recycled batteries within 10 years.

Why it matters: Recycling efforts can cut the ecological footprint of EVs, and the "circular economy" is a pillar of the European Union environmental strategy — it's even name-checked in a major pandemic stimulus proposal last week.

  • And per the Financial Times, which first reported the joint venture, the Northvolt-Norsk Hydro JV is "part of Europe’s effort to build a green battery industry to take on Tesla and Asian rivals."

What they're saying: "The partnership with Hydro is an important piece of the puzzle to secure an external feed of material before our own batteries begin returning back to us," Emma Nehrenheim, a top environmental exec at Northvolt, said in announcing the plan.

* * *

Speaking of EVs, the Wall Street Journal reports: "Volkswagen AG is investing €1 billion ($1.11 billion) in a Chinese auto maker and a further €1.1 billion in a local battery producer, in the German car maker’s latest bet on the Chinese electric-vehicle sector."