👟 Off we go! Today's newsletter has a Smart Brevity count of 1,231 words, 4.5 minutes.

🚨 Breaking: EU officials struck a draft deal to boost renewables' share of their energy mix to 42.5% by 2030, up from a current target of 32%, per Reuters.

🎶 This week in 1987 the singer-songwriter Suzanne Vega released the album "Solitude Standing," which provides today's intro tune ...

1 big thing: Ripple effects from Vanuatu's case

Photo illustration: Lindsey Bailey/Axios. Photos: Mario Tama, Ed Jones/Getty Images

In 2011, the Marshall Islands and Palau sought to put a climate case before the International Court of Justice in The Hague. It failed to gain enough traction, Andrew writes.

Why it matters: On Wednesday, the U.N. General Assembly took the extraordinary step of adopting, by consensus, a resolution that would do just that. It's asking the court for an advisory opinion laying out what countries’ obligations are to protect the climate, in order to secure human rights.

The big picture: The climate and emissions trends since that earlier effort are key to understanding why this succeeded where the previous one failed, and the potential implications of an ICJ ruling.

  • This time, Vanuatu — another climate-vulnerable, Pacific island nation — championed the effort.
  • Since 2011, extreme weather events have battered the world, along with climate studies that have issued increasingly strident warnings that conditions will grow worse, if greenhouse gas emissions are not reined in quickly and steeply.
  • The most recent warning came last week, from the U.N. Intergovernmental Panel on Climate Change.
  • Though countries adopted the Paris Agreement in 2015, emissions have kept rising since; the world threatens to bust through the temperature guard rails it established.

Between the lines: The implications of a likely ICJ advisory opinion are potentially vast but also relatively limited at the same time, experts tell Axios.

  • Michael Gerrard, a climate law professor at Columbia University who advised proponents of the 2011 ICJ push, said the biggest impacts won’t be seen directly in U.S. courts.
  • However, other countries could see more immediate fallout. Netherlands' highest court, for example, ruled in 2019 the government must enact stricter emissions targets, partly based on human rights protections.
  • Gerrard said the significance of any ruling, though non-binding for countries, would be “the most authoritative statement in international law on the topics of climate change and human rights.”
  • He said the ICJ could also strengthen the negotiating positions of climate-vulnerable countries in U.N. climate talks.

Yes, but: The advisory opinion may not come out for a couple of years — after countries have set new emissions targets for 2030 and beyond.

  • It also would not compel countries to take action, but could provide incentives.

The intrigue: Sandra Nichols Thiam, a climate law specialist at the nonprofit Environmental Law Institute, said the UNGA's action Wednesday is "momentous in and of itself."

  • More broadly, she said the ICJ could establish the contours of a country's obligation to control their emissions and the potential liability they might face for causing climate change impacts and failing to meet their emissions commitments.

The bottom line: Vanuatu's victory in the UNGA on Wednesday won't be limited to Pacific islands.

Read the whole story

2. Pre-gaming the big EV news drop

Illustration: Annelise Capossela/Axios

This week is already a banger on the electric vehicle front, and the big event hasn't even happened yet, Ben writes.

Driving the news: Sen. Joe Manchin on Wednesday threatened litigation over the Treasury Department's looming interpretation of EV tax credits in the climate law.

  • Treasury's about to release guidance he fears will soften the battery materials sourcing mandates tethered to wider EV purchase subsidies.
  • The requirements are aimed at bolstering the domestic supply chain and curbing reliance on China.
  • "I think they're going to try to screw me on this, and I'm willing to go to court," Manchin said, Axios Pro Energy Policy's Nick Sobczyk reports. (Subscribe, and you won't regret it!)

Catch up fast: This morning the White House unveiled the first private sector announcements under the federal "EV Acceleration Challenge" program.

Among the commitments, per a White House summary ...

  • Google is creating a search tool to help consumers navigate EV tax credits, and Consumer Reports is providing more tailored info about federal, state and local incentives.
  • Amazon says it now has 3,000 electric delivery vehicles on the streets, part of its goal of 100,00 by 2030.
  • Wells Fargo is providing new services that help corporations move to EVs by modeling costs, tax incentives and environmental effects.
  • First Student, the big school transport provider, vowed to transition 30,000 buses to electric models by 2030.

3. Expansion "stalls" in prolific U.S. oil fields ...

Data: Federal Reserve Bank of Dallas; Chart: Axios Visuals
Data: Federal Reserve Bank of Dallas; Chart: Axios Visuals

Oil and gas sector growth "stalled out" in Q1, per a Dallas Fed survey of executives in the region, including Texas and swaths of New Mexico and Louisiana, Ben writes.

Why it matters: The bank's quarterly surveys are a closely watched barometer of sentiment in the heart of the U.S. oil patch.

  • They track well over 100 energy companies and oilfield service providers of many sizes.
  • It comes as U.S. crude production growth is sluggish, despite attractive prices.

Driving the news: The "business activity index" was down sharply to 2.1.

"The near-zero reading indicates activity was largely unchanged from the prior quarter, a break from the more than two-year stretch of rising activity."

  • Output increased, but more slowly than prior quarters, the data said.
  • Companies reported rising costs for the ninth consecutive quarter.

The intrigue: Executives see inflation and global economic health having the most influence on profitability this year.

4. ... but majors show strong Gulf of Mexico interest

Huge oil and gas companies shelled out a combined $264 million for new drilling leases in federal waters in the Gulf of Mexico, Ben writes.

Driving the news: Chevron had the most high bids and the highest spending in the auction, committing nearly $108 million for 75 tracts.

BP had 37 high bids totaling $46.6 million, while Shell had 21 high bids totaling roughly $20.1 million. Equinor and Exxon rounded out the top five, per sale data yesterday.

Why it matters: The auction results show industry "optimism for the region," Wood Mackenzie analysts said in a note.

Yes, but: It didn't approach the salad days of Gulf sales, which have seen several billion dollars in total bids at times over the years. The last billion-dollar sale was in 2013.

The intrigue: Exxon's purchase of relatively cheap shallow-water, near-shore leases suggests their interest in using them for carbon storage, Reuters reports.

Of note: The sale was required under the Inflation Reduction Act. Democratic Sen. Joe Manchin of West Virginia demanded for pro-fossil provisions to secure his critical vote.

5. Why the IRA is bigger than expected but not enough

Illustration: Sarah Grillo/Axios

Two new analyses together tell an important story about the climate law: It won't achieve U.S. emissions targets, but may drive more low-carbon energy deployment than initially estimated, Ben writes.

Driving the news: A Rhodium Group report explores policies that could supplement the law enough to cut U.S. greenhouse gases 50% below 2005 levels by 2030.

That's the official U.S. pledge under the Paris Agreement.

Zoom in: The research firm estimates the law, combined with the 2021 infrastructure statute, will push emissions down 32%-42% below those 2005 levels by 2030.

  • New federal and state policies could get the rest of the way or at least much closer.
  • They include stronger federal vehicle efficiency standards that further speed EV sales, new EPA rules on methane, tougher appliance standards and more.

The intrigue: A separate study via the Brookings Institution is the latest to project that the law's tax incentives will cost more than congressional analysts initially thought.

  • That's because many of the incentives are uncapped, so how they pencil out for the Treasury depends on how widely businesses, drivers and homeowners use them.

What they found: The paper's central cost estimate of the law's tax credits $780 billion by 2031 — far above the Congressional Budget Office's $271B estimate.

"[E]ven at the high end, IRA provisions remain cost-effective," the paper notes of the estimate range, which reaches over $1 trillion.

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🙏 Thanks to Lisa Hornung and Javier E. David for edits to today's edition.