🥞Welcome back! Today's edition has a Smart Brevity count of 983 words, 4 minutes.

📬Did a friend send you this newsletter? Welcome, please sign up.

🎶At this moment in 1979, the band Instant Funk were #1 on Billboard's soul charts with today's intro tune ...

1 big thing: The IPCC's last warning before we lock in 1.5°C

Illustration: Aïda Amer/Axios

A stark U.N. climate change report warns that humanity stands at the precipice of a more dangerous world, but says it has the tools needed to pull back from the brink, Andrew writes.

Driving the news: The last installment of the Intergovernmental Panel on Climate Change's (IPCC) sixth assessment report marks the group's final warning issued when there is still has a chance, albeit slim, to limit global warming's severity to the most stringent Paris Agreement temperature target.

  • By the time the next assessment is completed in five to seven years, this document suggests that human actions may have rendered the Paris Agreement's 1.5°C benchmark, and possibly even its 2°C guard rail, infeasible.
  • "There is a rapidly closing window of opportunity to secure a livable and sustainable future for all," the summary for policy makers states.
  • "The choices and actions implemented in this decade will have impacts now and for thousands of years."

The intrigue: U.N. Secretary-General António Guterres is responding to the IPCC's urgency by calling for industrialized countries to move up their net zero emissions targets from 2050 to "as close as possible to 2040."

The big picture: The report includes a litany of indications that climate change is already severe and causing human suffering.

  • The new "synthesis" report provides the group's conclusions based on a series of in-depth studies since 2018.
  • It marks a noteworthy pivot to the present tense for the panel.
  • Not only are deadly extreme weather events, bleaching coral reefs, rising sea levels and other impacts portrayed as current problems, but the researchers also point to multiple lines of evidence indicating that risky climate impacts are worsening faster than previously known.
  • The report also includes language stating that "deep, rapid, and sustained" emissions cuts would slow warming rates within about 20 years, reflecting recent research.

Between the lines: The IPCC provides a new target for governments to aim for: cutting emissions 60% by 2035 compared with 2019 levels in order to maintain a chance of meeting the 1.5-degree target.

  • This is relevant since, as part of the U.N. climate talks, each country is supposed to offer a 2035 emissions pledge by next year.
  • The report notes the cratering costs of renewable energy sources and availability of other climate solutions, and calls for reforming the financial system to fund more climate-resilient development and low-carbon energy sources.
  • "Insufficient and misaligned finance is holding back progress," coauthor Christopher Trisos said in a statement.

Of note: The UN's Guterres presented an "acceleration agenda" that includes moving to net zero electricity for all developed economies by 2035, ceasing "all licensing or funding of new oil and gas," and halting the expansion of existing oil and gas reserves.

Yes, but: Several major oil and gas companies recently made clear that they do not plan to accelerate their move away from fossil fuels.

Share this story

2. 🛢️Banking jitters keep pushing oil down

Private and central bank efforts to shore up banking sector stability haven't been enough to prevent further declines in oil prices, Ben writes.

🗞️Driving the news: Prices are hovering around their lowest levels since late 2021, continuing the slide of the last couple weeks. WTI, the U.S. benchmark, is down to around $66 per barrel as we finished today's edition, rebounding from an even sharper decline this morning, while Brent crude is in the mid-$72 range.

What we're watching: The U.S. Federal Reserve meeting this week. Fresh interest rate increases could put further downward pressure on oil prices.

Looking somewhat further out, one question is whether a continued decline would prompt OPEC+ to pull back production to shore up prices.

🏃🏽‍♀️Catch up fast: On Sunday the world's leading central banks jointly announced steps to try to keep U.S. dollars flowing easily through the global banking system, Axios' Neil Irwin reports.

Also yesterday, via Axios' Javier David: UBS struck a deal to purchase troubled Credit Suisse for $2 billion, as a maelstrom of higher interest rates and bank solvency fears batter global markets.

3. Small nukes startup Newcleo targets $1.1 billion

Illustration: Shoshana Gordon/Axios

London-based Newcleo this morning announced plans for an equity raise of up to $1.1 billion for development of its small modular reactors and manufacture of fuel from nuclear waste, Ben writes.

Why it matters: The fundraise — if successful — will be another sign of investor interest in the array of startups developing SMRs that would be made with standardized designs and construction methods.

Zoom out: SMRs, in theory, herald lower costs and faster timelines, avoiding huge budget overruns and delays that have hobbled large reactor plans.

What's next: The company hopes to deploy a mini, 30-megawatt reactor in France in 2030, followed by a 200MW commercial unit in the U.K. two years later.

Catch up fast: Newcleo last week announced that it's working with Italy-based power heavyweight Enel Group.

4. Charted: The future of EV manufacturing

Data: Environmental Defense Fund and WSP USA; Chart: Axios Visuals

A wave of new investments is slated to sharply boost U.S. electric vehicle manufacturing capacity by mid-decade, per analysis from the Environmental Defense Fund and the firm WSP USA, Ben writes.

Why it matters: Their report — which tracks vehicles, batteries and component manufacturing plans since 2015 — notes a surge of announcements since passage of the incentive-rich climate law in 2022.

The big picture: Bloomberg reports that U.S. EV supply is "gradually closing the gap with demand."

5. On our radar: Big Oil's ESG thinking

Illustration: Annelise Capossela/Axios

This week two Europe-based multinational oil giants will offer investors an updated look at their positioning amid intense scrutiny of the industry's climate initiatives, Ben writes.

What's next: Tomorrow TotalEnergies execs will provide a presentation on "strategy, sustainability and climate," while on Wednesday Shell will provide its annual ESG update.

Why it matters: Oil majors have been setting new climate targets and increasingly diversifying into renewables and other low-carbon sectors in recent years.

Yes, but: Efforts to isolate Russia, and the persistence of high oil and gas demand, could prompt companies to alter their strategies — a topic we explored last week.

Watch this space for more.

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