Jun 15, 2021

Axios Generate

Hi readers! Today's Smart Brevity count is 1,300 words, 5 minutes.

đź“Š Data point of the day: $100 million. That's how much the Hewlett Foundation is committing to a new electric vehicle initiative.

🚨"Texas' power grid operator has asked people to 'reduce electric use as much as possible' until Friday following days of searing heat and a 'significant number of forced generation outages.'" Read more

🎶 Culture Club frontman Boy George just turned 60, so his terrific vocals animate today's intro tune...

1 big thing: Climate scientists' ideas for risk disclosure

Illustration: Sarah Grillo/Axios

With financial regulators marching toward rulemaking on the disclosure of risks associated with climate change, scientists have identified some ways new requirements could fall short, Andrew writes.

Why it matters: Right now, large institutional investors, such as overseers of pension funds, as well as ordinary individuals lack a full picture of how much climate change risk is contained in their portfolio.

Driving the news: Interested parties submitted comments to the SEC during a comment period that just closed.

An array of parties offered input — investment firms, energy companies, green groups and plenty in between. But one stood out from the crowd: the Woodwell Climate Research Center.

  • The center's scientists publish research in the peer-reviewed literature, but they are also involved in risk assessment projects with financial institutions such as Wellington Management, which has more than $1 trillion under management.
  • Through that partnership, Woodwell Climate is creating maps that integrate climate science data with financial data for better management of climate risks. (The researchers plan to make many of their data sets public.)

The details: In the comments, made via WHRC external affairs chief David McGlinchey, the center focuses on physical climate risks, which could take the form of climate change-related extreme weather events.

  • The organization of climate scientists, which includes researchers studying everything from changing weather patterns to managing forests, is clear in its view that climate risk disclosure is necessary.
  • Like other commenters, Woodwell Climate calls for standardization in the SEC's rulemaking, but, being a group of climate scientists, they have a different idea of what that means.
  • Their concerns lie in how the requirements might influence exactly what goes into and comes out of risk assessments for disclosure purposes. Will every company, for example, get to choose the models it uses to project future climate scenarios, and will those models and scenarios be disclosed?

Between the lines: Woodwell Climate's president, Philip Duffy, said standards are needed for how to conduct such analyses.

  • "Say you're an investor and you want to know should I invest in Company A, or B, or C, well you want to be able to compare the risks of Company A to the risks of Company B to the risk of Company C," Duffy told Axios.

Read the whole story.

2. Heat wave envelops the West straining the grid

Forecast high temperatures on June 17, with boxes indicating record highs. Image: Weatherbell

A dangerous and widespread mid-June heat wave is bringing blowtorch-like temperatures, skyrocketing power demand and "critical" wildfire danger to much of the West through this weekend, Andrew writes.

Why it matters: The heat will build in a region that's experiencing a record drought, which will worsen fire risks and water supply woes, and strain electricity grids. The heat itself can be deadly.

Threat level: Heat warnings and advisories are in effect for millions in eight states.

  • This event could break all-time records in normally sizzling places, such as Las Vegas, where the all-time high temperature of 117°F could be toppled and overnight low temperatures won’t fall below 90°F for days.
  • California’s Central Valley region is likely to see temperatures in the triple digits.

By the numbers: Las Vegas has only seen a five-day stretch of maximum temperatures at or above 113 degrees five times since instrument records began there in 1937, the majority occurring since 2005, the National Weather Service said.

What we're watching: The heat will raise power demand at a time of decreased output at hydroelectric plants.

  • California officials have secured more electricity supply to be brought into the state during heat waves this year after rolling blackouts were imposed in 2020.
  • But regional heat waves like this one will strain the grid by making importing power from other states more difficult.

Read more

3. U.S. solar just had a very big quarter
Reproduced from SEIA/Wood Mackenzie; Chart: Axios Visuals

New industry data shows the first three months of 2021 saw the addition of over 5 gigawatts of new U.S. solar power generating capacity, the largest first quarter ever, Ben writes.

Why it matters: It's the latest sign of the sector's expansion. The analysis projects that annual solar growth will set fresh records this year through 2024 when current tax incentives fully phase out.

But it also sees strong growth even in the following years. The White House is urging Congress to extent clean power tax credits.

Yes, but: The same analysis, however, shows how renewables are hardly immune from supply chain problems hitting multiple industries.

It notes that higher demand for solar, increased shipping costs, the microchip shortage and other problems "have led to increased commodity prices and delivery delays."

Reuters has more.

4. French wine disaster points to climate change

Illustration: Shoshana Gordon/Axios

A new study finds a strong chance that climate change helped trigger the recent catastrophe that hit France's wine industry, Andrew writes.

Driving the news: An extraordinary cold snap that gripped France in early April, just after a record-warm early spring, devastated grapes and other fruit crops.

New analysis by the research consortium World Weather Attribution shows that climate change made that disaster — a textbook example of a "false spring" event — up to 60% more likely.

Why it matters: As the world warms, growing seasons are shifting their timing, and frosts are changing their frequency and severity, too. The interaction between the two is making prized crops more vulnerable to large temperature swings.

How it works: Researchers focused on central France, in a region known for its Champagne.

  • They ran computer model simulations of the weather patterns that led to that event.
  • Some simulations included the current amount of human-caused greenhouse gases in the atmosphere, while others omitted these concentrations.
  • The models showed that climate change made April's cold snap less likely as the lowest temperatures have risen and frost episodes are less frequent now.

Yes, but: There's another dynamic at play, which is the timing of the start of growing seasons, and when vines reach a critical growth stage. Once researchers weighed this alongside the temperature shifts, they saw a clear climate connection.

  • Warming winters mean growing seasons start earlier, which leads to more mature vines being exposed to frigid temperatures if an Arctic outbreak occurs in April.
  • When vines are in the bud burst stage, as they were in early April, they're extremely vulnerable to frost, and by moving budburst earlier in the spring, climate change's influence made this damaging event about 60% more likely.
5. The shakeup at Lordstown Motors
Expand chart
Data: FactSet; Chart: Axios Visuals

Another day, another development in the Lordstown Motors saga, Axios' Hope King reports.

  • What's new: The buzzy electric vehicle company's CEO and CFO are out, the company announced Monday.
  • The abrupt exits come days after the company warned it could go out of business.

Why it matters: Lordstown — which has no revenue (and no product!) — could be a poster child for the downside of Wall Street's SPAC boom.

The company also said a board investigation found inaccuracies in the way Lordstown counted pre-orders — a claim that short seller Hindenburg Research made in March.

The intrigue: "On several occasions" Lordstown stated its pre-orders came from commercial fleets, but in reality, they were from "influencers" who said they would try to secure pre-orders, as well as from fleet management companies who showed interest, the company wrote.

6. A new twist in the fight over oil money disclosure

The Securities and Exchange Commission may strengthen rules that require oil, gas and mining companies to disclose payments to foreign governments, Ben writes.

Driving the news: The Biden administration regulatory agenda released Friday reveals the SEC intends to gauge whether "additional amendments" are warranted.

Why it matters: Human rights activists said the most recent iteration of the rules, finalized late in the Trump era, gutted mandates required under the 2010 Dodd-Frank financial reform bill.

The other side: Industry groups say they support disclosure but warn that requirements for highly detailed filings would create cost burdens and hobble SEC-regulated firms when competing for contracts abroad.

Catch up fast: The regulation — the subject of legal and political battles for the last decade — aims to create transparency to battle the "resource curse."

  • That's the poverty, conflict and government corruption in some resource-rich nations in Africa and elsewhere.
  • It aims to reveal payments for contracts, royalties and so forth to help ensure residents benefit from resource extraction.