Jul 26, 2021

Axios Generate

Good morning readers! Today's Smart Brevity count is 1,260 words, < 5 minutes.

📊 Data point of the day: 200+. The number of scientists meeting virtually to finalize a key United Nations climate science report, per NPR. It arrives on Aug. 9.

🎸 And happy birthday to the Rolling Stones' Mick Jagger, who's terrific on today's intro tune...

1 big thing: The uphill climb to a successful climate summit

Illustration: Sarah Grillo/Axios

The G20 just offered an extended preview of why spurring on-the-ground emissions cuts — not just airy pledges — will be so tough at the critical U.N. climate summit that's less than 100 days away, Ben writes.

Driving the news: The formal communique from the G20 energy ministers' meeting in Naples, Italy late last week finally arrived just yesterday, a reflection of the difficult and protracted talks.

Why it matters: What's most striking is what's not in the 14-page document — any agreement on phasing out coal consumption or overseas coal plant finance by the member countries.

  • That's important because coal is the most carbon-intensive fuel, and steep reductions are needed to keep the Paris climate agreement's goals within reach. We dug into that impasse here.

Where it stands: The outcome fails to expand the recent G7 agreement on coal to the wider G20 that includes major coal consumers China and India, among others.

  • A statement from G20 president Italy notes they were unable to reach agreement on coal phaseout timing, finance and a date for phasing out "inefficient" fossil fuel subsidies "despite a prolonged and tireless discussion."

The intrigue: This morning also brings yet another sign of climate tensions among G20 members.

"China said on Monday the European Union's plan to impose the world's first carbon border tax will expand climate issues into trade in violation of international principles and hurt prospects for economic growth," Reuters reports.

The big picture: OK, onto what the communique does say...it calls the 2020s a "critical decade" to act, "recognizing that the impacts of climate change at 1.5°C are much lower than at 2°C."

  • It also commits countries to submit updated pledges under the Paris Agreement "well ahead" of the U.N. summit that begins in October.
  • Key nations including China — the world's largest emitter — and India have yet to unveil revised commitments.

What's next: The limited outcome underscores the careful and high-stakes maneuvering looming ahead of the U.N. meeting known as COP26 — and all eyes will especially be on how coal and fossil fuel subsidies are addressed at the G20 heads of state meeting just beforehand.

Bonus: Putting the G20 coal deadlock in context
Expand chart
Data: BP; Chart: Danielle Alberti/Axios

That chart above, via BP's annual energy stats report, offers a look at global coal demand.

Why it matters: Coal's been on a generally downward trend for years in the U.S. and Europe, but on a global basis remains near peak consumption.

The International Energy Agency estimates that coal-fired power generation could reach an all-time high next year.

2. Breaking: Dems seek chat with Exxon lobbyist

Illustration: Sarah Grillo/Axios

The House Committee on Oversight on Monday requested an in-person, on the record interview with ExxonMobil senior lobbyist Keith McCoy, Andrew writes. The request comes after McCoy was caught on camera discussing the company's lobbying tactics.

Why it matters: This is the most direct congressional action to date related to the widely reported videos in which McCoy spoke candidly and under false pretenses with Greenpeace UK representatives.

The big picture: In the letter to McCoy, Democratic Reps. Ro Khanna, who chairs the panel's Subcommittee on Environment, and Carolyn Maloney, who leads the powerful full committee, cite several issues they want answers on.

  • Chief among them is Exxon's history of funding think tanks and trade associations as part of a campaign to sow public doubt in climate science, despite the company's longstanding knowledge of how serious a threat global warming poses.
  • "Your statements raise serious concerns about your role in ongoing efforts by ExxonMobil and the fossil fuel industry to spread disinformation, including through the use of 'shadow groups,' in order to block action to address climate change," the lawmakers write.
  • The lawmakers are also seeking information on Exxon's overall lobbying after McCoy referred to lawmakers as "fish" needing to be "reeled in."

Flashback: McCoy has publicly apologized for his comments, and Exxon CEO Darren Woods took the unusual step of issuing an apology soon after they became news.

What's next: The lawmakers gave McCoy until Friday to respond.

Read more

3. What to watch when Tesla reports earnings
Expand chart
Data: FactSet; Chart: Will Chase/Axios

Tesla is expected to report an eighth consecutive quarterly profit after markets close today, but still faces big questions despite showing it's now consistently in the black, Ben writes.

Why it matters: The company dominates U.S. electric car sales and is a leading player globally too, so its fortunes are a business story and a climate story.

By the numbers: FactSet estimates Tesla will report adjusted earnings of 94 cents per share and sales of $11.53 billion.

The market data company Refinitiv, per CNN, expects a record net profit of roughly $650 million for the second quarter.

What we're watching: Here are a few things we'll be looking for in the numbers and CEO Elon Musk's call with analysts...

1. How much will come from, like, actually selling cars. In Q1 Tesla again brought in plenty of money — $518 million — from selling regulatory emissions credits to automakers that primarily sell gas-powered cars.

2. What's going on with the Supercharger network. CEO Elon Musk tweeted last week that Tesla would make the network available to other EVs later this year.

  • But he provided no details beyond noting that it will extend to all countries "over time."

3. Bitcoin's status with Tesla. Musk told a virtual conference last week that Tesla would "most likely" resume accepting the digital currency as payment.

4. The state of the long-planned semi-truck. The site Electrek reported last week that Tesla is "going through its final debugging" of its Nevada assembly line. The truck was supposed to launch in 2019.

Keep reading

4. The EV startup Rivian has raised over $10 billion

Rivian R1T electric truck is delayed until September. Photo: Rivian

ICYMI: Rivian, the electric truck startup, said it closed a $2.5 billion private funding round, bringing its total capital raised to date to $10.5 billion, Axios' Joann Muller reports.

Why it matters: The money will help fund the company's next phase of growth, including a second U.S. assembly plant that will also include battery cell production.

  • The latest private financing announced Friday comes as many other electric vehicle startups are funding growth by merging with publicly traded shell companies.

Driving the news: Current backers, including Amazon’s Climate Pledge Fund, D1 Capital Partners, Ford Motor Company and funds and accounts advised by T. Rowe Price Associates, led the latest round.

  • Third Point, Fidelity Management and Research Company, Dragoneer Investment Group and Coatue Management also participated.

What to watch: Rivian recently delayed the launch of its long-awaited R1T electric pickup truck and R1S SUV until this fall, blaming "cascading impacts of the pandemic," especially a global shortage of semiconductor chips.

5. One spinning thing: Bootleg Fire tornado

Circular pattern of tree damage from the Bootleg Fire and an associated tornado. (Bootleg Fire Official Facebook Page)

Oregon's Bootleg Fire, which is the largest wildfire currently burning in the U.S., spawned a rare fire tornado that has been confirmed by the National Weather Service, Andrew writes.

Why it matters: The tornado, which occurred July 18 along the eastern periphery of the blaze, demonstrates the fire's penchant for extreme behavior, including towering thunderheads known as pyrocumulonimbus clouds and intense, shifting winds near the surface.

  • While fire tornadoes are considered rare, they are the subject of ongoing research. The Carr Fire in California in 2018 spawned one with estimated maximum winds of 143 miles per hour.

Threat level: Climate change-related drought and heat waves are leading to more instances of extreme fire weather, which can yield fast-growing blazes that behave in hard to predict ways.

6. Quote of the day
"If you’re below a $10bn market cap, it is going to be hard for you to sustain yourself long term."
Stephen Trauber, a top energy banker at Citi

He's quoted in this Financial Times feature about consolidation in the U.S. oil patch, which the FT notes is "leaving the once-fractured sector in the hands of a new breed of 'super independents.'"