Feb 21, 2019

Axios Generate

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D.C. readers: Join Axios' Mike Allen and Evan Ryan tomorrow morning at 8:30am for our next News Shapers event.

  • They'll sit down with Oregon Gov. Kate Brown and New Hampshire Gov. Chris Sununu, along with actress Jennifer Garner and Save the Children CEO Mark Shriver, to talk about how we can improve and expand education in America.
  • RSVP here

Onto music. Happy birthday to the late and incomparable Nina Simone, who opens today's edition...

1 big thing: The new climate urgency

Illustration: Rebecca Zisser/Axios

We’re at the beginning of a make-or-break period to confront global warming. A combination of forces, from dire scientific reports to extreme weather events, have crystallized the need for bold steps, Axios' Andrew Freedman reports.

The big picture: It's a rare convergence of science that reveals the urgency of the problem, extreme events that highlight threats almost nationwide, and shifting public views that are fueling support for stronger policies, scientists and polling experts say.

In the past 2 years, a spate of dire scientific reports have hammered home the urgency of acting.

  • The UN Intergovernmental Panel on Climate Change (IPCC) in October found that the effects of global warming are already evident worldwide. They said to avoid more severe impacts, greenhouse gas emissions should be cut by about 45% by 2030, relative to 2010 levels — a Herculean task.
  • The Trump administration released another report on Black Friday that tied trends in wildfires, sea level rise, and other extreme events to human-caused emissions.

The collective message from these studies is that the actions we take in the next 10 to 20 years will be crucial to determining the climate for centuries.

Public polling shows evidence that these reports, plus extreme weather events like the deadly California wildfires, are changing some minds.

  • One survey, a December poll by the Yale Program on Climate Change and George Mason University, found that the "alarmed" segment of the American public is at an all-time high of 29% — double the size in a 2013 survey.
  • The percentage of conservative Republicans who are worried about climate change has also reached an all-time high, according to Yale's Anthony Leiserowitz.

In a sign of climate science's influence, the Democrats' Green New Deal resolution championed by Rep. Alexandria Ocasio-Cortez cites both the UN report and the Black Friday report.

A new grassroots movement has also started to develop, like the recent school walkouts in Europe led by Swedish teenager Greta Thunberg that are expected to reach the U.S. and other countries on March 15.

But, but, but: There are other reasons for some of these changes, such as having a climate change denier in the White House and the galvanizing effect that's having on the left.

  • Also, there remains a stark partisan divide in public views, with many Republicans remaining skeptical of the science.

The bottom line: The next few years will show us whether that means there's a window for action, or whether we'll just be more aware of our fate.

Go deeper

2. Amazon's big EV and AV moves
Illustration: Sarah Grillo/Axios

A new Morgan Stanley note says Amazon's $700 million investment in the electric vehicle company Rivian is the biggest moment for EVs since Tesla's 2010 IPO — and may be the year's biggest auto story.

The big picture: Research analyst Adam Jonas and several colleagues argue that this single deal is important because...

  • It's enough money to bring Rivian closer to having an electric pickup on sale next year.
  • It's a sign of EV's being at a "tipping point" as battery costs fall and more legacy automakers begin offering pure electrics.
  • It's also demonstrates that "megafleets" like Amazon's are moving toward electrification, thanks in part to customer's environmental awareness.

The intrigue: Another big takeaway is their argument that Amazon's investment represents an eventual challenge to Tesla's dominance in U.S. production.

  • "We view Amazon and Tesla as competitors rather than partners/collaborators in advancing the future of transport," according to the note.

What's next: The move is wrapped up in Amazon's related and growing efforts to move toward autonomous electric fleets, Axios' Joann Muller and Erica Pandey report.

  • In January, Amazon introduced Scout, a cooler-sized, electric robot for last-mile deliveries.
  • Earlier this month, it joined a $530 million investment round in AV startup Aurora Innovation, led by an all-star team of engineers from Google, Tesla and Uber.
  • The investment in Rivian is important because their modular electric chassis can be adapted for virtually any type of vehicle.
  • With Aurora's self-driving system and Rivian's flexible "skateboard," Amazon could potentially fashion different sized AVs for any purpose.
  • Read more of their story here.
3. White House climate countermove

The Trump administration might form a committee to re-examine the view of many intelligence and defense analysts that climate change poses a national security threat, according to a White House memo obtained by the Washington Post.

What to watch: William Happer, a Princeton physicist and well-known denier of mainstream climate science findings, will reportedly participate in the panel.

  • He argued in a 2015 Senate testimony that more carbon dioxide is beneficial to the planet, a view that directly contradicts thousands of scientific studies.
  • Happer is a National Security Council senior director and currently serves as President Trump's deputy assistant for emerging technologies.

The big picture: Axios' Orion Rummler notes that multiple reports from U.S. intelligence agencies have already concluded that climate change poses security risks, including the administration's latest Worldwide Threat Assessment from the director of National Intelligence.

The White House declined comment for this story.

4. Lightning round: advocacy, crude, EPA


Crude oil: Via Argus, "US upstream mergers and acquisitions (M&A) are expected to slow further in 2019 amid a volatile crude market, but large corporate consolidation may still continue as companies seek to build scale and lower costs."

Pressure: Bloomberg has a look at Climate Action 100+, an increasingly powerful network of institutional investors that's pretty new to the scene but has recently won concessions from Shell, BP and mining giant Glencore.

  • What's new: Yesterday, as we reported here, Glencore agreed to cap its coal production and make new climate-related disclosures.
  • "While skeptics may regard Glencore’s changes as minimal (the company still stands to reap billions from its huge coal business), the announcement still shows the influence that investors hold at being able to push even the most reticent companies to respond to their demands," Bloomberg reports.
  • Go deeper: Read Shell agrees to set near-term carbon targets and BP agrees to activists' calls for wider climate disclosure.

EPA: Politico obtained documents that shed light on a rather secretive, longstanding coalition of big coal-burning power companies and their connection to Bill Wehrum, a senior EPA official and former partner at a law firm that works with them. From their piece on the Utility Air Regulatory Group...

  • "Wehrum’s past role as a utility lobbyist is well-known, but the documents reveal never-before-disclosed details of how extensively his old firm, formerly called Hunton & Williams, worked to coordinate the power industry’s strategy against the Obama administration’s regulations."
  • 25 companies and 6 industry trade groups agreed to pay the firm a combined $8.2 million in 2017, per Politico.
5. The sneakily important carbon capture tax credit

Carbon injection site well near Iceland's Hellisheidi Geothermal Power Plant. Photo: Melanie Stetson Freeman/The Christian Science Monitor via Getty Images

Axios Expert Voices contributor Luca Mastropasqua sizes up a Clean Air Task Force study showing that recently enacted tax credits could spur carbon capture deployment in the U.S. power sector that's equivalent to taking 7 million cars off the road.

Why it matters: The oil and gas industry has experimented with CO2 removal technology since the 1930s to purify process streams from CO2. Now similar technology could be used to ease the transition from fossil fuels to more sustainable energy sources.

Background: Carbon capture, utilization and storage (CCUS) is considered an important medium- and long-term means of reducing carbon emissions in fossil fuel–intensive industries.

Details: The Trump administration approved a new tax credit in the February 2018 budget legislation for CCUS, which made several changes:

  • Expanded and increased the value of an older credit, from $10/ton of CO2 captured to $35/ton for enhanced oil recovery — a process of injecting captured CO2 into an oil field to recover additional petroleum — and from $20/ton to $50/ton for geological storage.
  • Established 12-year credit security for new deployment projects.
  • Reduced the eligibility threshold from 500,000 to 100,000 tons of CO2 captured for industrial applications.

Read more of the full piece by Mastropasqua, who's a senior research scientist at UC Irvine's Advanced Power and Energy Program.