Good morning from D.C., where everything feels quiet amid the ongoing government shutdown and all of the snow we just got. But we are still going at Axios (and global warming is still real).
My latest column bucks the conventional wisdom on how climate change should unite the world. I'll share that and then Ben Geman will get you up to speed on the rest of the news.
1 big thing: Global warming divisions
Sure, we all share this one planet. But the warming Earth is poised to divide — not unite — us.
The big picture: One cornerstone of the 2015 Paris Climate Agreement is that nations have a shared responsibility to address global warming. But the reality is that climate change won't affect everyone the same way.
- The impacts, while immense, aren’t shared evenly around the world, and the solutions will affect some nations more than others.
Driving the news: 2 reports out last week show the uneven effects of a warming world and a transition to cleaner energy sources. Certain regions, particularly those with economies based on fossil fuels, are set to lose under the Paris deal while others, particularly China, are poised to gain.
Two main splits exist:
- The most well known division is between developed nations that have emitted the most greenhouse gases in the past and those still developing their economies like China and India, which are increasingly emitting the most today.
- Those fault lines are well documented, but others emerged more forcefully at a UN climate change conference last month in Poland between nations that produce fossil fuels and those that don’t.
Saudi Arabia, for example, says the impact on their nation is heavy. In an interview at the conference with Carbon Brief, Saudi climate negotiator Ayman Shasly said...
Given that some low-lying island nations are projected to literally disappear beneath rising sea levels within 80 years thanks to emissions from other nations’ fossil fuels, including Saudi oil, that statement may seem like an unconvincing thing to say.
Yes, but: Actually, Shasly has a point.
- As a desert nation, Saudi Arabia is set to face the impacts of a warmer world with more intense droughts and heatwaves. But it’s also going to feel the brunt of the economic pain from transitioning away from fossil fuels — if the world follows through with the Paris deal ambitions (a big if).
- “You can see their concern is legit,” said Adele Morris, an economist who in her role at the Brookings Institution co-wrote one of the reports released last week on this topic.
That report found 2 regions — Australia and the nations in the OPEC cartel, including Saudi Arabia — would be worse off under the Paris deal in 2030, in part because they’re big fossil-fuel exporters. All other regions, including China and even Russia, would be better off.
Drill down for the rest in the Axios stream.
2. PG&E's crisis — and why they won't be the last
Geisha Williams left her position as CEO of PG&E, which faces billions of dollars in wildfire liability costs and this morning initiated steps to file for bankruptcy at the end of the month, Axios' Courtenay Brown reports.
General counsel John Simon is serving as interim CEO.
Why it matters: It's another sign that the company is in crisis-control mode as California lawmakers decide whether it should step in to help PG&E. Williams became the first Latina CEO of a Fortune 500 company in 2017 when she took the helm.
The big picture: Courtenay and Axios' Andrew Freedman have a new piece this morning that explores PG&E's crisis — and why it's a warning to other power companies and businesses around the country.
Background: Last year was the worst wildfire season in California's history.
- The Camp Fire, which destroyed the town of Paradise and killed at least 86 people, was the costliest catastrophe worldwide, with $16.5 billion in damages, per reinsurance company Munich Re.
PG&E could be on the hook for billions of dollars in liability costs related to last year and the prior year's wildfires, far more than its insurance would cover. The Camp Fire may have been triggered by a spark from PG&E's power lines.
Driving the news: California is one of the few states that hold utilities liable for damages tied to their equipment, even if the companies were in compliance with the state's safety rules.
- Lawmakers have to decide whether or not the state's utilities will be able to pass current — and what's sure to be future — liability costs onto customers.
- Climate change is lengthening the wildfire season in California and is leading to larger, more severe fires.
- These trends are expected to continue, according to a comprehensive federal climate assessment released late in 2018.
Why you'll hear about this again: The rest of the U.S. is increasingly feeling the effects of climate change, from the Gulf Coast, where the Florida Panhandle was hit by its strongest hurricane on record just last year, to New England, where Boston observed its highest water level on record in 2018.
- The National Climate Assessment found that the power sector is particularly vulnerable to climate change.
Go deeper: Read the full story.
3. Trump's latest Russia defense: fuel prices
President Trump is wielding the U.S. oil production boom and low gasoline prices as a shield against criticism over his relationship with Russia as Robert Mueller continues his probe and Democrats ramp up their inquiries.
My thought bubble: Russia doesn't need high oil prices as much as some other petro-states, notably Saudi Arabia. And Trump's tweet this morning is claiming way too much credit for U.S. crude oil output and gasoline prices, which currently average around $2.25 per gallon.
- U.S. oil production is indeed at record levels of well over 11 million barrels per day. But the increased level is largely thanks to the shale boom that began around a decade ago as producers used advances in fracking and horizontal drilling to unlock new supplies.
- The oil industry has welcomed Trump's deregulatory efforts, but they're not currently a major driver of total U.S. production.
- Gasoline prices, meanwhile, largely reflect oil prices set on global markets, though the U.S. output surge is among the factors putting downward pressure global crude prices — and hence gasoline prices.
But, but, but: Trump can, however, claim a measure of credit for pushing the Saudis to boost output last year, which put downward pressure on prices.
4. Big this week: oil, EPA, cars
Oil markets: The International Energy Agency's first monthly oil market report of the year lands Friday.
- Why it matters: We'll be watching to see how they size up the effects of the OPEC+ deal so far and whether they see any further softening of global growth.
Congress: Acting EPA Administrator Andrew Wheeler is slated to appear Wednesday before the Senate Environment and Public Works Committee, which is vetting his nomination to formally head the agency.
- Why it matters: It will provide Democrats their first chance to question Wheeler in public since he took over from the ousted Scott Pruitt, so look for questions on a range of controversial regulatory moves.
Electric vehicles: The Detroit Auto Show is this week, and so look for automakers to offer more information about EV plans and concepts (more on that below).
5. 2020 pressure for Green New Deal
The same progressive activists behind Alexandria Ocasio-Cortez's 2018 candidacy are launching a 15-city campaign to push the Green New Deal in battleground states including Michigan, Pennsylvania and Florida, Axios' Alexi McCammond reports.
What's new: Justice Democrats, which recruited AOC, and the Sunrise Movement plan to begin the campaign in March, a Sunrise spokesperson tells Alexi.
Why it matters: The plan laid out in broad terms Sunday night signals how advocates of the sweeping climate and economic proposal hope to ensure it's in the bloodstream of the 2020 White House race.
- Pillars of the GND include moving to 100% renewable electricity, job guarantees for people working in energy transition, and "massive investment" overall in emissions-cutting, per AOC's proposal.
What they're saying: "We're making it clear any politician who wants to run for federal office needs to support GND and not take fossil fuel money," Sunrise founder Varshini Prakash said on a call with reporters and activists Sunday.
Where it stands: A Sunrise spokesperson told Axios last week that the campaign has already been meeting with the campaigns of some 2020 White House hopefuls.
- Several candidates or potential entrants — including Sen. Elizabeth Warren, Beto O'Rourke and Julian Castro — have voiced support for the idea in broad terms.
- Politico reported over the weekend that Sunrise plans to meet with staff for Sens. Warren, Bernie Sanders, Jeff Merkley and Cory Booker to draw them out further.
One big thing to watch going forward is how the activists groups, and its allied think tanks and lawmakers, begin to propose more specifics around what's now a broad set of ideas.
6. GM's emerging electric strategy
GM last night unveiled images of an all-electric new Cadillac crossover vehicle at the Detroit auto show — the first EV slated for manufacture on GM's upcoming BEV3 platform.
Why it matters: It follows Friday's announcement that the luxury Cadillac division will be at the forefront of GM's EV strategy.
- "Cadillac will introduce new models at the rate of roughly one every six months through 2021," GM said Sunday.
What we don't know: Details about the new model, including the price and where it will be built, have not yet been revealed.
- "The EV's name and specific details regarding its powertrain and range will be revealed closer to an also yet-unspecified launch window," CNET reports.
Axios' Joann Muller had more Friday on GM's plan to pour more resources into electric cars. Take it away Joann...
Where it stands: GM appears to be serious about their zero-emissions vision — the company is shifting 75% of its powertrain engineers from internal-combustion engines to electrics development as it prepares to unleash of wave of EVs under the Cadillac brand.
The big picture: GM CEO Mary Barra has laid out a blueprint for shifting to electric and self-driving cars — a world, she says, with "zero crashes, zero emissions and zero congestion."
- That will require shifting resources to AV and EV development — at a time when GM is closing factories and laying off 15,000 workers, triggering the wrath of Trump.
What's happening: In a meeting with investors Friday, GM shared more details about its next generation of EVs — 20 EV or fuel cell powered models to be released by 2023.
- They'll be based on a flexible EV architecture, enabling many body styles in front-wheel, rear-wheel and all-wheel-drive configurations.
- Most of the EVs will be introduced as Cadillacs, a chance to position the iconic-but-tarnished luxury brand once again as a tech leader.
- A big focus will be on China, Cadillac's top-selling market.
- Eventually, Buick, GMC and Chevrolet will share the EV architecture.
7. More EV notes: Tesla, Ford, finance
Tesla: The electric car and solar company has added Steptoe & Johnson to its lobbying team, a newly available filing shows.
- Where it stands: The filing only describes the expected work in the broadest terms, noting it's "related to developments on international trade policy."
- It lists trade, tariffs, transportation and cars as potential topics. Tesla declined to provide more details over the weekend.
Ford: Via CNBC, the company is preparing to launch new EVs next year.
- The company has already announced plans for an $11 billion investment and plans to develop 40 plug-in cars — including 16 full electrics.
- But CEO Jim Hackett tells the network: "We have a pretty big surprise coming next year."
- And via NYT's preview of the auto show, "Next year, Ford plans to introduce a small electric sport utility vehicle with a look influenced by its Mustang."
Startups: Per Reuters, "Some 250 startups involved in some aspect of electrification have attracted more than $20 billion in venture capital, notably from a broad array of corporations across multiple industries, according to a Reuters analysis of publicly available data."