Sep 11, 2020

Axios Generate

By Ben Geman
Ben GemanAmy Harder

Welcome back! Today's Smart Brevity count: 1,294 words, < 5 minutes.

🚨 Situational awareness: "In a rare show of defiance of the Trump administration, key Senate Republicans joined Democrats on Thursday in agreeing to phase out chemicals widely used in air conditioners and refrigeration that are warming the planet." (Washington Post)

🎵 Tomorrow marks 40 years since XTC released the album "Black Sea," so their craftsmanship opens today's edition...

1 big thing: Democrats tether climate to wider agenda

Illustration: Sarah Grillo/Axios

The Senate's top Democrat is throwing his weight behind an economic message that ties climate to goals around racial justice, income inequality, labor rights and a lot more.

Driving the news: Minority Leader Chuck Schumer is co-sponsoring a new resolution that's a call to "Transform, Heal, and Renew by Investing in a Vibrant Economy," or THRIVE.

  • Schumer, at the resolution's rollout event, said the U.S. is experiencing a "collision of crises" — the pandemic, the economic crisis, climate change and racial injustices.
  • "We can't play whack-a-mole with these crises, we can't pick one alone to focus on," Schumer said.
  • The bicameral plan has over 80 co-sponsors, and backers include the Sierra Club, the Movement for Black Lives, and the Service Employees International Union.

Why it matters: The broad document — which includes calls for investments in low-carbon energy and infrastructure — previews Democrats' political posture if they regain the majority and have a chance to legislate.

Between the lines: Like the Green New Deal, the new House and Senate resolution is a big and vague thing that tells us little about policy specifics, but plenty about the politics of the moment.

  • It reflects the increasing efforts among progressives to link climate and environmental policy to battling systemic racism and inequalities — including the disproportionate pollution burdens facing people of color.
  • There's plenty there for organized labor too. One section endorses the union-backed "Protecting the Right to Organize Act" and other steps to expand labor power.
  • But, it remains to be seen how much this very intersectional framing of their climate message might affect chances of moving big policies if a political window opens, and how it might translate into more detailed legislation.

Quick take: It's the latest example that Democrats understand big new steps on climate would probably need to hitch a ride with other priorities.

  • As we wrote here, Joe Biden has tethered his proposal for $2 trillion in climate-related investments to his wider economic recovery plan.
  • Or go back a decade, when Democrats frequently argued that the big climate bill they tried to move through Congress would help ease dependence on oil imports.

Go deeper:

2. Nikola's GM honeymoon interrupted
Expand chart
Data: FactSet; Chart: Axios Visuals

From the life-comes-at-you-fast files: The EV startup Nikola Corp.'s stock fell Thursday after a financial research firm published a report claiming the electric and fuel cell truck startup is an "intricate fraud."

Catch up quick: It comes just two days after Nikola's shares jumped on the news that GM is taking an 11% stake in the company, is engineering and building its Badger pickup, and will supply key battery and fuel cell tech.

Driving the news: Hindenburg Research alleges Nikola has made a series of deceptive statements.

  • They include falsely claiming to possess proprietary tech, and releasing deceptive video of the Nikola One semitruck in operation.
  • "Nikola had the truck towed to the top of a hill on a remote stretch of road and simply filmed it rolling down the hill," the report states.
  • CNET has much more on Hindenburg's allegations here.

Of note: Hindenburg is short Nikola — that is, they make money when the share price falls.

Threat level: If some of the claims prove true, it could slow the rush of capital into unproven EV startups, especially via deals to take them public via mergers with special purpose acquisition companies, or SPACs.

  • These SPAC deals are all the rage lately. It's how Nikola went public in June, and EV startups Canoo, Lordstown Motors and Fisker have all announced SPAC deals in recent weeks.

Quick take: Axios chief financial correspondent Felix Salmon says the Nikola flap could cast a pall over SPAC deals more broadly.

  • "SPACs have historically been viewed as a bit shady," he says, pointing to a reputation they have recently been shedding.
  • "If the Hindenburg allegations hold up, investors will be that much less likely to trust future SPACs in this — or any — industry."
Bonus: What they're saying about Nikola

"Nikola has been vetted by some of the world’s most credible companies and investors," the company said in a statement to multiple outlets.

  • "We are on a path to success and will not waver based on a report filled with misleading information attempting to manipulate our stock."

Meanwhile, GM said in a statement: “We are fully confident in the value we will create by working together."  

3. Obama's energy boss rebuts activists on Biden

President Obama's energy secretary says climate activists calling on Joe Biden to shun people who work with fossil fuel companies are focusing on the wrong things when it comes to cutting carbon, Axios' Amy Harder reports.

Driving the news: Ernest Moniz, who is on the board of power giant Southern Company, is among the people who some activists say should not advise Biden or join his administration if he wins.

What they're saying: Amy moderated an MIT panel yesterday where Moniz spoke, and she asked about these efforts to shape Biden's orbit and Moniz' position with Southern, which has lots of coal and gas-fired power plants.

  • “I do not agree with the characterization of the Southern Company as a fossil fuel company. It’s an electricity utility. It also is a natural gas supplier at a retail level. But that’s [like] the statement that anybody who drives an internal combustion car is a fossil fuel company because they use them. I think that’s the wrong way to look at it," Moniz said.
  • "I just think it’s the wrong attitude," Moniz said. "The attitude is it’s about the carbon.”

The big picture: Elsewhere, Moniz said California's recent blackouts do not make the case against solar power, but did add that solar's growth there requires better management.

Read more

4. Voters and natural gas: It's complicated
Data: Brunswick Group; Chart: Naema Ahmed/Axios

Voters support natural gas production but also believe the industry must operate more cleanly, a new Brunswick Group poll shows.

Driving the news: The survey shows more support for gas than other fossil fuels, but it's much less popular than renewables.

  • 46% say gas can play a key role fighting global warming only if the industry does a lot more to curb emissions.
  • 31% see gas playing a "vital role" fighting climate change while 23% view gas as "part of the climate problem" and oppose new infrastructure.

Why it matters: Gas releases far less CO2 when burned than coal, which it has for years been shoving aside in power markets.

  • But methane emissions from production and transport erode some of that edge.
  • Activists want a much faster transition to zero-carbon sources to enable steep emissions cuts.

The intrigue: The election season has high stakes for the fuel.

  • President Trump has scrapped regulations on methane emissions.
  • Biden's plan calls for emissions rules and some new drilling limits, but does not support a fracking ban.

The big picture: The polling on gas is part of a wider-ranging new Brunswick Group survey on energy and climate.

  • 53% support giving state and local governments more power to thwart oil and gas pipeline projects, but 59% say blocking pipelines will not help fight climate change.
  • 13% of voters call climate one of the two most important topics in deciding their presidential vote, which is far below the pandemic, the economy and health care.
  • Subsidizing clean energy and regulating fossil fuel production and use is more popular than taxing carbon emissions.

Of note: The August 5–11 survey of 1,000 registered voters has a margin of error of ±3.1%.

5. Quote of the day
"It’s apocalyptic."

Who said it: Roy Wright, a former senior Federal Emergency Management Agency official, speaking to the New York Times about ongoing crises in California.

The context: The piece explores the connective tissue between devastating wildfires, heatwaves and power grid problems in California.

Why it matters: "The crisis in the nation’s most populous state is more than just an accumulation of individual catastrophes. It is also an example of something climate experts have long worried about, but which few expected to see so soon: a cascade effect, in which a series of disasters overlap, triggering or amplifying each other," NYT writes.

Go deeper: Wildfires in the West are fueling changes in forests (Axios)

Ben GemanAmy Harder