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D.C.-area readers: Join Axios' Mike Allen Thursday at 8am for a News Shapers event focused on U.S. trade policy.
- He'll sit down with former Mexican Ambassador to the U.S. Arturo Sarukhan, Rep. Veronica Escobar (D) of El Paso, South Dakota Sen. Mike Rounds (R), and U.S.-China Business Council president Craig Allen.
- RSVP here
Onto music. At this moment 35 years ago, the irrepressible Cyndi Lauper was atop the Billboard Hot 100 charts with today's intro tune...
1 big thing: Carbon pricing grows but falls short
A recent World Bank report offers a very mixed bag for anyone hoping the spread of carbon pricing — via taxes or permit trading — could help bring steep cuts in worldwide emissions.
Why it matters: The bank's latest look at pricing trends follows global CO2 emissions increases in 2017 and 2018 that ended a 3-year plateau.
What they found: The report examines various types of regional and national pricing systems.
- 11 new initiatives were launched in 2018–2019, such as Canada's hybrid trading (for power and industry) and fee (for fuels), as well as South Africa's economy-wide tax.
- That brings the total number running or scheduled to run to 57, including China's national emissions trading system slated to begin next year.
- Those initiatives — roughly split between emissions trading systems and CO2 taxes — cover 20% of worldwide emissions.
- Governments raised roughly $44 billion in revenues from pricing last year.
But, but, but: The existence of a pricing system is no guarantee of emissions cuts (though pricing can also help indirectly by funding climate-related programs).
- "[L]ess than five percent of global emissions covered under carbon pricing initiatives are priced at a level consistent with achieving the goals of the Paris Agreement," the report states.
- That would mean prices in the range of $40–$80 per ton of CO2 by 2020 and $50–$100 by 2030.
- Yet half the emissions covered by existing systems are under $10 per ton.
The bottom line: "[W]hile we see some encouraging trends, action on carbon pricing is nowhere near where it should be: it still covers only a small part of global emissions at prices too low to significantly reduce emissions," John Roome, the bank's senior director for climate change, writes in the report.
Meanwhile, the UN is urging countries to increase the ambition of pledges under the Paris climate agreement at a summit in September.
Go deeper: Read the whole report.
2. How Europe can kick (half of) its coal habit
Existing natural gas capacity could replace up to half of the European Union’s coal-fired electricity, according to a forthcoming International Energy Agency study viewed by Axios' Amy Harder.
Why it matters: While still a fossil fuel and thus controversial, natural gas emits 50% less carbon than coal. So in cases where gas is displacing coal, overall CO2 emissions will go down.
By the numbers: In the analysis expected to be released in July, IEA analysts found that with gas, coal and CO2 prices hovering about where they are right now (15–20 Euros per megawatt-hour for gas, 6–10 for coal and 20–25 per ton of CO2) existing natural gas capacity could replace up to half of existing coal electricity.
One level deeper: Environmentalists and some politicians are increasingly opposed to natural gas because they worry it's locking in far too much global warming.
- Looking purely at the math and science of climate change, they're right. But in this case, it’d be existing — not new — natural gas infrastructure stepping in.
What they’re saying: “Gas of course has a much lower carbon content than any other fossil fuel. Therefore, we think gas is very important as an intermediate balancing fuel,” Maroš Šefčovič, European Commission vice president, said in an interview in May.
3. Why Audi's small EV recall matters
Audi yesterday announced a small and voluntary recall of its first fully electric vehicle in the U.S., the luxury E-Tron SUV, due to a fire risk.
Why it matters: Yes, recalls happen in the car industry. But it's coming at a sensitive time as the EV market is still getting off the ground.
- Cars with a plug are still a tiny share of U.S. sales. Tesla has already had a number of fires, so more incidents with models from any automaker could create consumer doubts.
Driving the news: The VW unit said it's pulling back roughly 1,640 of the vehicles, including 540 already in customers' hands.
- The problem is a "potentially faulty" seal that could allow water to enter the battery compartment, creating risks of short-circuits or even a fire, Audi said.
- "We are applying an abundance of caution as no such incidents have been reported globally," Audi of America said.
What's next: Audi said they will be able to resolve the problem in the coming 6-8 weeks for affected customers. The company is offering loaner cars and a $800 cash card to cover costs.
Go deeper: Read Bloomberg's story on the recall.
4. Catch up fast: LNG, oil, minerals
Minerals: The Financial Times reports on efforts to shore up supplies of materials used in EVs and other energy tech.
- "The US and allied countries have launched an international effort to encourage responsible development of materials needed for new energy technologies, including lithium, copper and cobalt, as they attempt to ensure future supplies of critical resources," they report.
Oil: "Oil steadied above $62 a barrel on Tuesday as firmer equities and expectations OPEC and its allies will keep withholding supply countered concern about slowing economies and demand," Reuters reports.
Gas: Shell said Tuesday that it has begun shipping LNG from its gigantic floating Prelude facility off Australia's coast.
- Why it matters: Via S&P Global Platts, "The shipment marks the startup of one of the most anticipated LNG projects in the world and will boost Australia's LNG export volumes as it ramps up capacity in coming months."
5. How money thinks about climate
Deloitte is out with its latest annual survey of consumer and business energy management views and practices.
The big picture: One takeaway is that sobering UN and U.S. scientific reports about global warming released in late 2018 are on the minds of corporate decision-makers.
By the numbers: 84% of respondents were aware of those reports, and 64% changed their energy management practices in response. Here are some other top-line findings from the business part of the survey...
- The share of businesses that say they have energy management plans because it's the "right thing to do" rose 11 points to 39%, although cost-cutting remains by far the biggest motivation, identified by 50% of respondents.
- 63% of companies surveyed have formal resource management goals.
- 67% say their customers want them to procure a certain percentage of their power from renewables, and 72% "actively publicize" their renewables sourcing.
- Go deeper: Read the Washington Post's take on how U.S. businesses respond to climate concerns.
Meanwhile, a new story in the Wall Street Journal explores how various funds — from sovereign wealth to startup private equity players — view the stakes of global warming.
- Where it stands: "[A]sset managers and investors increasingly believe there are profits to be made and losses to be avoided by considering how climate change — and government efforts to combat it — might affect companies and industries over the long term," they report.
- What they're saying: "We’re not ideologically driven, we’re not philanthropists. We want to make money," Martina Turner, manager of Accessible Clean Energy which invests in clean energy stocks, tells WSJ.