Aug 20, 2020

Axios Generate

By Ben Geman
Ben GemanAmy Harder

Good morning! Today's Smart Brevity count: 1,315 words, < 5 minutes.

And let's wish happy birthday to the late great Isaac Hayes, who has today's intro tune...

1 big thing: Don't expect a Biden carbon tax plan

Illustration: Eniola Odetunde/Axios

Axios' Amy Harder reports: Joe Biden is unlikely to pursue a carbon tax if he wins in November, according to several people familiar with his campaign's thinking.

Driving the news: The campaign said last year it supported a price on carbon emissions, but has since released policies that embody government mandates, investments and job creation amid the pandemic-induced recession.

What they’re saying: The campaign’s positioning reflects the Democratic Party’s overall movement away from a carbon price and a new focus on economic recovery and equality, say people following the presidential nominee’s positions.

  • “The [climate] community has largely moved into a different framework,” said John Podesta, a longtime Democratic political operative who has advised the last two Democratic presidents.
  • “A real disadvantage of just a pricing scheme is you can’t directly attack the environmental injustice problem,” said Podesta, who is in regular contact with the Biden campaign. “In contrast, Biden has proposed that 40% of the [clean energy] investments go to distressed communities.”
  • “I don’t think the campaign is going to push this,” said another person familiar with the positioning on a carbon tax. “I think it’s almost always the right policy except in a recession or coming out of a recession.”

For the record: Biden campaign spokesperson Matt Hill declined to comment. Public information about the nominee’s positions compels some reading between the lines.

  • The campaign’s June 2019 plan includes language calling on Congress to create an “enforcement mechanism” to cut carbon emissions, which at the time the campaign said indicated a carbon price.
  • Its July plan, which is meant to complement the earlier draft, doesn’t repeat that language but does include a clean-electricity standard, which could impose an implicit price on electricity emissions.

The big picture: Most economists and businesses support an explicit carbon price over standards or other policies. They argue it’s the most straightforward and predictable way to cut heat-trapping emissions.

  • But many politicians in the Democratic Party and climate activists have moved away from supporting a carbon price as a core policy over the last couple of years, arguing that, compared to mandates and regulations, a market-based approach can’t guarantee the steep emission reductions scientists say are now needed to address climate change.
  • (Some Republicans have begun to speak more favorably of acting on climate change, but their proposals are far narrower than a carbon tax.)

The other side: A growing list of corporations and lobbying interests have poured money into carbon tax campaigns on Capitol Hill in recent years, but these efforts have not produced public results.

Read more

2. The importance of the Democrats' platform dust-up

Joe Biden's campaign is emphasizing that he really, really doesn't like subsidies for fossil fuels at a time when climate activists are blasting the removal of anti-subsidy language from the Democratic National Committee platform.

What they're saying: "[Joe Biden] continues to be committed to ending U.S. fossil fuel subsidies & then rallying the rest of the world to do the same — as was outlined in his climate plan last year," policy director Stef Feldman tweeted Wednesday.

"Here at home, he'll use those dollars to instead invest in a clean energy future and create union jobs," she added.

The big picture: It's not clear why the language got dropped, but it's not really consequential in terms of future policy. Nonbinding party platforms aren't especially influential.

Why it matters: The kerfuffle is nonetheless important because it represents deeper tensions on the left that will play out if Democrats win the White House (and Senate) and have a chance to implement their wider climate agenda.

Politico's Zack Colman nicely explains why it touched a nerve, writing:

"The sparring over the fossil fuel language reflects a deeper mistrust between the DNC and progressive climate activists who contend the Democratic Party has failed to take aggressive positions against oil, gas and coal companies who have lobbied against policies to swiftly reduce greenhouse gas emissions."

The intrigue: The DNC told HuffPost, which broke the story, and other outlets that the anti-subsidy language was "incorrectly included" in a late July draft.

But in contrast, veteran Democratic insider John Podesta told my colleague Amy Harder that removal of the language was a procedural goof.

“Sometimes when you’re on Zoom and all that stuff, you just screw something up,” Podesta said. “It was really just a procedural screw-up, and they’ve ended up with egg on their face.”

Bonus: The global state of fossil fuel subsidies
Reproduced from OECD; Chart: Axios Visuals

OECD data on fossil fuel subsidies worldwide presents something of a mixed picture.

By the numbers: The joint OECD-International Energy Agency analysis of 77 economies shows that governments' support for the production and consumption of fossil fuels totaled $478 billion last year, an 18% decline from 2018.

  • But the analysis also showed a 38% increase last year in support of the production of fossil fuels in a subset of 44 advanced and emerging economies.

Why it matters: The worldwide persistence of subsidies is among the many challenges to fighting climate change, according to groups including the IEA and OECD.

But it's a tricky topic because some consumption-side subsidies are meant to make energy more affordable to poor and vulnerable populations.

Where it stands: The OECD tells Axios that their analysis of the U.S. shows an estimated $8.2 billion in fossil fuel subsidies in 2019, with 60% for consumption, 27% for production and the remaining 13% for "general services" (which includes R&D and infrastructure).

Go deeper: We explored IEA data and analysis on consumption subsidies here.

3. The potential oil savings from electric trucks
Reproduced from Rhodium Group; Note: Low and high estimates based on COVID-19 trajectory and recovery; Chart: Axios Visuals

There's lots of buzz around electric trucks these days, so it's not a bad time to examine what their large-scale deployment would mean for oil demand and carbon emissions.

Driving the news: That brings me to new(ish) analysis from the Rhodium Group consultancy, which sees the potential to displace enough oil to make a "significant dent" in transportation sector CO2 emissions.

  • It estimates the long-term effects of a recent 15-state nonbinding pact to bolster the use of zero-emissions heavy trucks and other medium- and heavy-duty vehicles.
  • California, one of the states, also recently approved mandatory regulations on greatly increasing zero-emissions truck sales between 2024 and 2045.
  • The study also explores the impact if these state efforts were transformed into a nationwide mandate, which would mean more than half the U.S. medium- and heavy-duty fleet would be electric by 2045.

What they found: Check out the chart above.

  • "If the [15-state] MOU were expanded nationally, the impact would increase six-fold. By 2035, cumulative oil demand would fall by 806 to 843 million barrels, expanding to 4.6 to 4.9 billion barrels by 2045," Rhodium finds.
  • "The long-term effect of expanding California’s approach nationally would reduce oil consumption in 2045 by 16 to 17%," the Aug. 13 analysis notes.

What we're watching: How a potential Joe Biden administration would seek to curb emissions from big trucks.

  • His plan calls eventually having 100% of medium-duty vehicle sales come from electric models, and "annual improvements" in the heavy-duty sector.
  • The analysis also comes as more electric trucks are coming into the market.

Go deeper: States team up in push for electric heavy vehicles

4. Catch up fast: Tech, oil bankruptcy, EVs

Emissions: "More tech companies are launching software that oil and gas producers can use to measure their carbon emissions due to mounting investor pressure to curb greenhouse gases." (Reuters)

Oil-and-gas: "Valaris PLC, a London-based offshore drilling contractor, filed for bankruptcy Wednesday in the U.S. with a proposed $6.5 billion debt-for-equity swap that hands over ownership of most of the company to creditors." (WSJ)

Electric cars: "Lucid Motors announced that its forthcoming all-electric sedan, the Lucid Air, will be the 'fastest charging electric vehicle ever offered.'" The company claims the Air will have the capability to charge at rates of up to 20 miles per minute." (The Verge)

5. Number of the day: 250 megawatts

That's the upcoming size of LS Power's new Gateway Energy Storage project in San Diego county. It's operating at 230 megawatts now but is slated to reach 250 megawatts by the end of the month.

Why it matters: It's the largest battery storage project in the world, per the company and multiple reports.

The big picture: The project arrives as California has been dealing with rolling blackouts and wildfires in recent days amid a major heatwave.

"The state’s grid operator has said that adding more storage capacity would help it meet demand in the evenings when solar power starts to wane," Bloomberg reports.

Ben GemanAmy Harder