Jul 15, 2020

Axios Generate

By Ben Geman
Ben GemanAmy Harder

Good morning. Today's Smart Brevity count: 1,302 words, 5 minutes.

Situational awareness: The White House is expected to announce changes today in how agencies will review energy and infrastructure projects under the National Environmental Policy Act.

  • The changes will "limit the scope of agency reviews as well as what projects warrant the scrutiny," Bloomberg reports.
  • Go deeper

And let's wish happy birthday to the great Linda Ronstadt, who has today's intro tune...

1 big thing: Biden teases political path for climate plans

Photo illustration: Aïda Amer/Axios. Photo: Eric Baradat/AFP via Getty Images

Joe Biden is offering hints about how he’d try to thread the political needle to move big climate and energy plans through Congress.

Why it matters: If the 2020 election opens a path to moving substantial legislation, it's likely to be a fraught and narrow one that could vanish entirely in the 2022 midterm elections.

Catch up fast: Biden yesterday unveiled plans to spend $2 trillion over four years on clean energy and climate-friendly infrastructure projects like mass transit.

The plan also calls for policies including a requirement that power companies provide 100% zero-emissions electricity by 2035.

  • His overall platform is a mix of executive moves and proposals that would require new legislation.

The big picture: Biden campaign officials, on a call with reporters Tuesday, said the plan would involve "some amount of stimulus spending."

  • And Biden is casting the plan as a pillar of the economic recovery from the COVID-19 pandemic.
  • If Biden wins, big clean energy investments will likely be part of a recovery package — which means political pressure to speed up the Senate's slow legislative gears.
  • If this sounds familiar, it is. In 2009, the Obama administration and Capitol Hill Democrats wove clean energy measures into the stimulus package during the financial crisis, albeit on a smaller scale than what Biden's floating.

What they're saying: New York Magazine's Eric Levitz wrote about why linking climate and energy goals to a recovery package matters politically...

  • "In ordinary economic times, mobilizing congressional support for massive federal intervention in the economy can be difficult, even if such intervention is ecologically necessary," he writes.
  • "The silver lining of the present calamity is that it has rendered private investors incapable of achieving a socially acceptable level of unemployment, and has thus broadened support for Uncle Sam stepping in to pick up the slack," his item adds.

The intrigue: Separately, Biden this week slightly backed off his longstanding support for Senate filibuster rules.

  • "It's going to depend on how obstreperous [Republicans] become," he told a group of reporters, per several reports like this Politico piece.
  • That's important because it suggests a potential path for moving the policy — as opposed to spending — parts of his platform that require Capitol Hill approval, such as a "clean energy standard."
  • Of course, if Democrats take the Senate, they can also try to move some big measures through the budget reconciliation process, which provides limited chances to make policy changes without a super-majority.
2. Fossil fuels have upper hand in stimulus plans — so far

Illustration: Sarah Grillo/Axios

G20 governments' pandemic recovery packages are steering much more funding to fossil fuel industries and energy-intensive sectors like airlines than "clean" energy, a new analysis shows.

Why it matters: International agencies like the UN and IMF have been urging governments to prioritize climate-friendly energy in economic recovery packages.

But the new Energy Policy Tracker project from several think tanks and activist groups shows that for now, incumbent fuels and industries are getting more aid.

By the numbers: According to the new database, thus far G20 governments' commitments provide...

  • $151 billion for policies "supporting production or consumption of fossil fuels."
  • Of that amount, only $30 billion comes with climate targets or new emissions requirements.
  • Meanwhile, $89 billion has been steered toward "clean" sectors like energy efficiency, solar and wind.
  • There's another $28 billion in the "other energy" category that doesn't fall into their "fossil" or "clean" taxonomy, such as " biofuels and hydrogen of unspecified origin."

Yes, but: Quartz points out an important caveat.

"This analysis only counts funding that has been officially committed. Stimulus funds that are still in discussion, like the European Union’s $850 billion green recovery plan, are not included," the piece notes.

The groups plan to update the tracking tool on a weekly basis as more recovery spending is approved.

The big picture: “National and subnational jurisdictions that heavily subsidized the production and consumption of fossil fuels in previous years have once again thrown lifelines to oil, gas, coal, and fossil fuel-powered electricity," said Ivetta Gerasimchuk of the International Institute for Sustainable Development.

Her group launched the project with organizations including the Institute for Global Environmental Strategies, the activist group Oil Change International, the Overseas Development Institute and others.

3. The early returns on BlackRock's climate shift

Investment giant BlackRock is getting more aggressive about pushing public companies to do more on climate change.

Driving the news: BlackRock, in a report Tuesday, said this year it has used its shares to take "voting action" against 53 companies that are "making insufficient progress integrating climate risk into their business models or disclosures."

  • Most of those votes were against members of boards of directors, while some were in support of various climate-related shareholder proposals.
  • Of those 53 companies, 37 were energy companies with a combined market capitalization of $408 billion, BlackRock said.

The other side: "[T]his shareholder season BlackRock took only baby steps forward by voting the right way on a fraction of the climate tests on the table, and claiming that stronger action is on the way," said Ben Cushing of the Sierra Club, one of several groups that said BlackRock hasn't done enough.

Why it matters: The tally is an early sign of how BlackRock is implementing one element of its wider plan unveiled early this year to make climate change more central to its strategy.

Where it stands: Overall, BlackRock said that it has identified 244 companies that are not doing enough.

  • Beyond the 53 that they prodded with shareholder votes to show their displeasure, BlackRock said that "We have put the remaining 191 companies ‘on watch.’"
  • "Those that do not make significant progress risk voting action against management in 2021," the company said.

Flashback: In May we covered their votes at Exxon's and Chevron's shareholder meetings.

Go deeper:

4. Catch up fast: Pipelines, climate, markets

Oil-and-gas: "The Dakota Access oil pipeline can continue to operate amid an ongoing court battle, a U.S. Appeals Court said on Tuesday, setting aside for now a lower court’s order earlier this month to shut and empty the line." (Reuters)

Climate: "Fossil fuels and agriculture are driving a dangerous acceleration in methane emissions, at a rate consistent with a 3-4℃ rise in global temperatures this century." (The Conversation)

More climate: "A new project called the Climate TRACE Coalition plans to use satellite imagery and AI to track [greenhouse gas] emissions in near real-time, even if they’re not being reported by the source." (Fast Company)

Markets: "Oil rose near its highest level since March as U.S. crude inventories looked set for a large drop and OPEC+ sought extra output cuts from laggards." (Bloomberg)

5. The money case for electric vehicles

Falling costs for battery and fuel cell technology mean that governments can push for widespread deployment of zero-emissions vehicles without straining taxpayers, University of California, Davis researchers say.

Why it matters: Transportation overtook electricity generation a few years ago as the nation's largest source of carbon dioxide emissions.

However, zero-emissions vehicles typically come with higher upfront costs, and widespread adoption requires new charging infrastructure.

The big picture: Analysts with the school's Institute of Transportation Studies have been modeling projected costs — and ultimately savings — from transitioning moving to zero-emissions cars, trucks and buses in California.

Their analysis this year shows substantially lower costs and larger eventual savings than even projects made a year ago.

By the numbers: The latest analysis, based on achieving an 80% reduction in CO2 emissions from transportation by 2050, finds a total of $7 billion in "transition costs" between 2020 and 2028.

That's substantially lower than projected costs when the conducted the same modeling in 2019.

Where it stands: The analysis comes as California officials are looking to substantially boost EV penetration, including new regulations last month on truck sales. Dan Sperling, a co-author of the UC-Davis analysis, is a member of the California Air Resources Board.

The bottom line: "After 2030, the costs of owning and operating [zero-emissions vehicles] are projected to be lower than gasoline and diesel cars and trucks. The savings, from 2030 to 2045 could reach $100 billion," they write.

They also note that taxpayers as a whole need not bear the costs, citing policy options like fees on buyers of inefficient internal combustion vehicles combined with rebates for zero-emissions vehicle buyers.

Ben GemanAmy Harder