Jul 29, 2021

Axios Generate

Welcome back! Today's Smart Brevity count is 1,303 words, 5 minutes.

📊 Data point of the day: 21 gigawatts. That's the U.S. offshore wind capacity IHS Markit projects in 2030, a vast rise but well short of White House goals.

🚨 Breaking: "Trevor Milton, the founder of electric truck maker Nikola Corp, has been indicted on charges of making false and misleading statements to investors." (Reuters)

🎶 And happy birthday to Geddy Lee of Rush, who sounds lovely on today's intro tune...

1 big thing: The "mortality cost" of carbon emissions
Data: Our World in Data; Chart: Axios Visuals

A new study finds that adding projected heat-related deaths into a cost-benefit analysis of federal rules would tilt policymaking in favor of more aggressive carbon emissions cuts, Andrew reports.

Why it matters: The social cost of carbon helps determine the outcome of cost-benefit analyses that underpin federal regulations.

  • Adding in global warming's potential to cause more heat-related fatalities would alter the policy calculus from supporting a gradual phaseout of emissions starting in 2050 to fully decarbonizing by the same year.

The big picture: The study, published Thursday in Nature Communications, adds temperature-related mortality impacts into calculations of the estimated damage to society caused by the emission of one additional metric ton of carbon dioxide.

  • Recent studies have shown that climate change will likely cause millions of premature deaths worldwide, primarily through increased heat waves and other disasters like floods, more severe hurricanes, food shortages and other effects.
  • R. Daniel Bressler, a doctoral candidate at Columbia University's Earth Institute, found that by taking direct heat-related deaths into account, the more appropriate social cost — expressed as a "mortality cost of carbon" — is surprisingly steep.

By the numbers: Every 4,434 metric tons of CO2 added to the atmosphere in 2020 causes one death through 2100, the study found.

  • This is equivalent to the lifetime emissions of 3.5 average Americans, given their high per capita emissions rates, or 146.2 Nigerians, considering the lower per capita emissions rates in that country.

How it works: Bressler also added the mortality cost of carbon to the well-known Dynamic Integrated Climate-Economy Model, or DICE, which Nobel Prize-winning Yale environmental economist William Nordhaus pioneered.

  • Bressler found that the social cost of carbon as calculated by the updated DICE model would increase sevenfold, from $37 per metric ton to $258 per metric ton.
  • Fully decarbonizing by 2050 would bring 9 million excess deaths, which is around nine times fewer than what's expected under a vastly higher emissions scenario, Bressler told Axios.

Read more

2. Senate Dems' tricky infrastructure message

Illustration: Rae Cook/Axios

We now know more about the Senate's bipartisan infrastructure plan — and Democrats' tactical approach to the advancing package that has a suite of climate-related provisions, Ben writes.

Catch up fast: The Senate voted 67-32 to move the $1.2 trillion plan toward debate last night. Per a White House release it includes...

  • $73 billion in grid-related spending, including major transmission investments.
  • $7.5 billion to deploy electric vehicle charging infrastructure.
  • $39 billion in public transit spending, and $7.5 billion for zero- and low-emission buses and ferries.
  • $50 billion-plus for hardening infrastructure against climate change and cyberattacks.

The intrigue: OK, we still don't have bill text, but summaries in circulation — like the one posted here via Politico and this one via Sen. Bill Cassidy (R-La.) — describe climate- and energy-related measures funded or at least authorized.

For instance...

  • $8 billion worth of new tax credits for clean energy-related manufacturing.
  • Authorization of a $3.5 billion program to create four regional "hubs" for direct air capture projects.
  • Josh Freed of the think tank Third Way has a helpful Twitter thread here.

The big picture: The bipartisan agreement comes as Democrats are hoping to move much, much larger climate provisions in a budget reconciliation package on a party-line vote.

  • Comments late Wednesday from climate-focused Democrats and activists show they're walking a fine line — greeting the plan with limited praise while trying to keep the pressure on for much more aggressive measures.
  • For instance, Sen. Jeff Merkley (D-Ore.) said in a statement that "while this package contains valuable provisions, we still have miles left to go."
  • Sierra Club legislative director Melinda Pierce called it " an important start," but said Democrats need to go "bigger and bolder" with a plan "as large as the physical reality of the climate crisis."

Go deeper: Democrats call infrastructure bill a down payment on climate (NYT)

Bonus: Charging shares climb on deal news
Data: YCharts; Chart: Axios Visuals

Shares of electric vehicle charging companies rose largely in tandem Wednesday in what's likely a response to news of the infrastructure deal, Ben writes.

The big picture: The bipartisan agreement, as we noted above, includes several billion dollars to expand EV charging infrastructure if signed into law.

3. Oil giants look to reward shareholders amid recovery

Illustration: Sarah Grillo/Axios

Two oil-and-gas heavyweights — Shell and TotalEnergies — both said they're taking new steps to reward investors as they reported billions of dollars in Q2 profits this morning, Ben writes.

Driving the news: Shell said it's launching $2 billion in share buybacks that it hopes to complete by year's end and it increased dividends to 24 cents per share, a 38% boost from Q1.

The company reported $5.5 billion in adjusted Q2 earnings

  • Meanwhile, France-based multinational TotalEnergies reported an adjusted profit of $3.5 billion.
  • The company said it would allocate up to 40% of additional cash flow from Brent crude prices above $60-per-barrel to buybacks.
  • Another huge oil company, Norway's Equinor, today announced a $300 million tranche of its share buyback program.

The big picture: The moves show Big Oil's reversal of fortune since the pandemic crushed prices and demand last year, leading to steep industry losses.

  • European majors that are increasingly diversifying into lower carbon sectors are also seeking to show investors that they'll benefit during the transition.
  • And here's your standing reminder that while they're boosting investment in areas like renewables, power services and EV charging, oil and gas remain their dominant business lines.

Go deeper: Bloomberg has much more on their earnings here.

Speaking of Big Oil and renewables, TotalEnergies and Amazon this morning announced a "strategic collaboration" that includes helping Amazon procure more clean power.

  • They said they have signed power purchase agreements to provide 474 megawatts of capacity to Amazon in the U.S. and Europe, and they expect to expand the effort to the Middle East and Asia-Pacific region.
4. SEC boss offers rough roadmap on climate plans

Photo illustration: Sarah Grillo/Axios. Photo: Chip Somodevilla/Getty Images

Securities and Exchange Commission chair Gary Gensler yesterday shared his thinking on looming climate risk disclosure rules and said he wants more coherence around climate-friendly investing, Ben writes.

Driving the news: Gensler, in comments yesterday, said he's tasked SEC staff with coming up with a draft regulation by the end of the year.

  • His remarks, before the group Principles for Responsible Investment, also made the case that there's strong support for the effort.
  • Gensler noted that 75% of responses to the SEC's solicitation of comments earlier this year back mandatory climate disclosure rules.

What we're watching: Whether they will require disclosure of "Scope 3" emissions — that is, greenhouse gases from the use of a company's products and services in the wider economy.

Gensler said staff will explore whether and how such emissions should be disclosed.

  • He also revealed some other topics in play. Gensler argued that the rules could be an important way for investors to evaluate now-common "net-zero" pledges that companies are making.
  • Gensler also noted that companies often operate in jurisdictions with emissions-cutting targets. "I’ve asked staff to consider which data or metrics those companies might use to inform investors about how they are meeting those requirements," he said.

What we don't know: MarketWatch notes that Gensler did not wade into whether the regime will create a safe harbor that shields companies from litigation over the disclosures.

5. New cash for Tesla alum's battery recycling firm

Illustration: Sarah Grillo/Axios

Redwood Materials, a Reno, Nevada-based battery recycling startup founded by Tesla alum JB Straubel, has raised $700 million at a $3 billion pre-money valuation led by T. Rowe Price, Axios' Dan Primack and Joann Muller report.

Why it matters: Battery supply chains are coming under pressure from growing public acceptance of electric vehicles and automaker promises to switch away from gasoline engines.

Other investors include: Baillie Gifford, CPPIB, Fidelity, Capricorn, Breakthrough Energy Ventures, Amazon’s Climate Pledge Fund, Valor Equity Partners, Emerson Collective and Franklin Templeton.

The bottom line: Mining for nickel, cobalt and other battery materials is expensive and time-consuming, plus harmful for the environment. 

  • Redwood’s goal is to create a closed-loop supply chain for electric vehicles and energy products, harvesting metals from junked electronics, scooters, lawnmowers and, eventually, old EVs.