Sep 14, 2021

Axios Generate

☕ Welcome back. Today's Smart Brevity count is 1,362 words, 5 minutes.

📊 Data point of the day: $74.12, the Brent crude oil price this morning that's a six-week high. Go deeper

🚨 Situational awareness: Tropical Storm Nicholas crossed the Texas coast as a Category 1 hurricane early Tuesday, cutting power to about 490,000 customers. Heavy rains are spreading into Louisiana.

🎶 We're about 41 years since XTC released the album "Black Sea," which provides today's intro tune...

1 big thing: The fraught sprint to the UN climate summit

Illustration: Sarah Grillo/Axios

The scramble is intensifying to lay the groundwork for achieving tangible results at a key United Nations climate summit just seven weeks away, Ben writes.

Driving the news, part 1: U.N. Secretary-General António Guterres and U.K. Prime Minister Boris Johnson will convene a heads-of-state-level gathering Monday on the sidelines of the General Assembly.

  • The meeting "will address the gaps that remain on the actions urgently needed from national governments — especially the G20 — on mitigation, finance and adaptation," a U.N. advisory states.

Driving the news, part 2: Reuters reported last night that the U.S. and European Union are seeking to unveil a joint pledge to cut emissions of methane, a potent greenhouse gas, by one-third by 2030.

  • The story calls it an effort to "galvanize other major economies" ahead of the November summit in Glasgow, Scotland. The White House did not confirm the Reuters story to Axios.

Why it matters: The reported methane deal and U.N. meeting are the latest signs of the diplomatic scramble ahead of a summit where success is not guaranteed.

  • U.S. special climate envoy John Kerry and Alok Sharma, the U.K.'s top climate diplomat, have both visited China — by far the world's largest emitter — this month for talks.
  • Kerry went to India, the world's third-largest greenhouse gas emitter after the U.S., this week. All eyes will also be on the G20 heads of state meeting in late October.

Threat level: The run-up to the summit, called COP26, has been rocky.

  • A G20 meeting in July ended without agreement on a phase-out in domestic coal-fired power generation or funding for such plants abroad by nations including China, the world's biggest coal user.
  • It's also not clear whether developed countries will make good on a longstanding pledge to mobilize $100 billion per year to help other nations fight climate change.

The big picture: The summit comes as global emissions are rebounding from the pandemic alongside the use of coal and oil.

  • The International Energy Agency projects that global oil demand will exceed pre-pandemic levels in the second half of next year, while OPEC yesterday estimated that 2022 demand will surpass 2019 on a full-year basis.

Yes, but: Despite the Biden administration's diplomatic efforts, the U.S. ability to make good on its own emissions-cutting pledges is unclear, with much of that left up to Congress.

2. Chevron vows big increase in low-carbon spending

Illustration: Eniola Odetunde/Axios

Chevron is pledging to invest $10 billion through 2028 in a push to expand renewable fuels and gas, hydrogen and carbon capture, Ben writes.

Driving the news: The oil giant this morning announced specific targets for fuels production and CO2 capture levels by 2030, including...

  • Reaching 100,000 barrels per day of renewable fuels including renewable diesel and sustainable aviation fuels.
  • Achieving 150,000 tonnes per year of hydrogen production.
  • Capturing or offsetting 25 million tonnes per year of CO2.

The $10 billion, which Chevron called triple its prior plans, includes $2 billion to lower the emissions intensity of its operations, it said.

The big picture: The company said it's focused on fuels that help lower emissions from sectors that are hard to electrify, like aviation and heavy industry.

Why it matters: Oil giants face increasing pressure from investors and activists to do far more on climate change.

Advocates want far tougher steps that move the companies away from their dominant carbon-emitting oil-and-gas businesses, and the new pledges are unlikely to significantly ease that criticism or pressure.

Catch up fast: Chevron in March announced new targets for cutting emissions intensity — that is, per unit of output — and has been striking new deals and partnerships on alternative fuels and climate.

But the company and its peer Exxon have so far eschewed the long-term "net zero" pledges popular among European majors.

What they're saying: Andrew Logan, of the sustainable investment advocacy group Ceres, said in an email, "[A]t a quick glance this looks like a step forward, but a relatively modest step when what is needed is a giant leap."

Go deeper.

3. Climate risk firm Jupiter Intel announces financing and expansion

Illustration: Annelise Capossela/Axios

Jupiter Intelligence, an extreme weather and climate risk management firm, announced Tuesday it is picking up a major new Japanese investor, venture capital fund MPower Partners, to jump-start an Asian expansion, Andrew writes.

The big picture: The total investment is not yet disclosed, but Jupiter’s co-founder and CEO, Rich Sorkin, told Axios it is “substantially more” than the total investments used to build up Jupiter so far, which puts it above $40 million.

Details: The venture investor is Japan’s first ESG-focused global VC firm, and according to Jupiter’s press release, the first female-led VC firm in Japan. Along with Clearvision Ventures, MPower is leading a new funding round in Jupiter that will be announced in the coming weeks, the company stated.

  • Jupiter, which has already been doing business in Japan, will be opening a regional office there.

Context: Jupiter is also seeking to deepen its work with MS&AD Insurance Group, which is both a Jupiter customer and investor, and Sumitomo Mitsui Banking Corp., one of Japan’s largest banks.

Between the lines: Jupiter's competitors in the risk analysis and resilience space include Demex, Cervest, and The Climate Service. Moody’s has also been moving into this space.

4. Global coal pipeline is shrinking
Expand chart
Recreated from E3G; Chart: Axios Visuals

The number of new coal-fired power projects on the drawing boards globally has shrunk significantly amid a wave of cancellations in recent years, per the climate think tank E3G, Ben writes.

Driving the news: Planned projects have fallen by 76% since late 2015 when the Paris Agreement was struck as governments have endorsed new restrictions, the firm's new report states.

Why it matters: There's no pathway to meeting the Paris targets of limiting warming to 1.5°C — or at least below 2°C — without aggressive moves away from coal.

However, the IEA, in a July report, estimated that total global coal-fired generation is rebounding this year and may hit a record in 2022.

Yes, but: The E3G report says the shrinking project pipeline is "bringing the end of new coal power construction into sight."

But coal's hardly on a path consistent with steep emissions cuts needed to avoid letting the Paris goals slip completely out of reach.

A number of countries are still planning new projects that risk "locking in high emissions for several decades," E3G said.

By the numbers: China's pipeline has shrunk a lot, but it's still building a significant amount.

  • It accounts for 53% of the world's coal-fired capacity under construction and 55% of the pre-construction pipeline.
  • Add India, Vietnam, Indonesia, Turkey, and Bangladesh, and those nations along with China account for over 80% of the remaining pipeline.
  • Plans for new plants in the OECD and E.U. have "collapsed" since 2015 and existing coal generation is declining, with "with 56% of operating capacity either closed already since 2010 or scheduled to close by 2030."
5. Poor nations seek lenience in fossil financing

Illustration: Aïda Amer/Axios

The growing urgency of tackling global warming is colliding with the world’s deeply uneven use of the heat-trapping energy resources that are causing it, Axios outside contributor Amy Harder reports.

The big picture: The long-simmering debate over the role rich and poor countries should fill in tackling climate change is reaching a boiling point.

  • Rich countries in North America and Europe, which have built their economies on oil, natural gas and coal, are calling for drastic cuts in burning these fuels. Leaders of poorer nations, particularly in Africa, are urging lenience for their still-developing economies.

Driving the news: Wealthy nations and development banks funded by them are restricting access to financing for fossil-fuel infrastructure in dozens of the world’s poorest countries.

  • The biggest sticking point is emerging over natural gas, which emits far less carbon dioxide and other traditional pollution compared to coal and oil.
  • But gas is still a fossil fuel that is contributing to Earth’s temperature rise.

Why it matters: To forestall the worst effects of a warming planet, the world must drastically cut heat-trapping emissions, says a just-released United Nations report.

Yet concerns about equity — which often fall along racial lines — are emerging in response.

Read the whole piece.

Editor's note: Amy Harder is launching Cipher, a new publication by Breakthrough Energy. Sign up for her weekly newsletter here, and Axios' Sara Fischer has more about Cipher and the trend of new climate media outlets.

🙏 Thanks so much for reading and please tell your friends they can sign up for this newsletter for free. We'll see you tomorrow.