👟Off we go! Today's newsletter has a Smart Brevity count of 1,296 words, 5 minutes.

🎶Happy birthday to Jimmy Somerville, a founding member of the brave synth-pop pioneers Bronski Beat, which has today's intro tune...

1 big thing: Paris summit aims to unlock trillions

Illustration: Aïda Amer/Axios

World leaders and top figures in finance are gathering in Paris today to shake up the world's major development banks, such as the World Bank and IMF, and get more money flowing to developing nations prone to climate disasters, Andrew writes.

Why it matters: While a new global system is likely to prove elusive, the summit may feature movement on some countries' priorities and serve as a crucial part of the run-up to COP28 in Dubai late this year.

Zoom in: The meeting's hosts include French President Emmanuel Macron and Barbados Prime Minister Mia Mottley. They are joined by more than a dozen African leaders, German Chancellor Olaf Scholz, Chinese Premier Li Qiang and new World Bank president Ajay Banga.

  • Treasury Secretary Janet Yellen and John Kerry, President Biden's climate envoy, are representing the U.S.
  • Mottley is championing an ambitious and detailed agenda, known as the Bridgetown Initiative, for multilateral bank reform that would free up more money at lower borrowing costs.
  • It includes adding climate-resilient provisions to new loans to allow countries to temporarily redirect loan repayments to recover from climate and extreme weather disasters, a position Yellen endorsed and reportedly Banga was set to back Thursday.
  • Mottley, one of the most prominent voices on climate justice at the annual U.N. climate summits, is also pushing to unlock over $1 trillion from the private sector to achieve the U.N. Sustainable Development Goals.

What they're saying: "The Paris meeting is just essential. It's really the only dedicated head of state meeting focused on actually financing the climate transition in developing and emerging economies," Rajiv Shah, who heads the Rockefeller Foundation and led the U.S. Agency for International Development during the Obama administration, told Axios.

Of note: Loans to many developing countries are typically viewed by the World Bank and IMF as riskier investments, and are therefore subjected to higher interest rates and less favorable terms.

  • Many of the poorest countries, particularly those in Africa, are stuck in a spiral of debt, with more disasters only adding to the burden. Escalating impacts from climate change could send even more of these countries into a debt crisis.
  • The Bridgetown Initiative seeks greater access to funding at lower rates and freeing up so-called concessional finance, which would provide developing countries with access to money at below-market rates.
  • They would then put the money toward sustainable development projects, which include climate change.

The intrigue: A lack of clear outcomes from the two-day summit would contrast with the details contained in the Bridgetown Initiative and other proposals for bank reform and debt relief.

Read the whole story

2. The global stakes of a Minnesota mining plan

Illustration: Axios Visuals

Minnesota regulators are beginning to review a key nickel mining proposal that promises to help the U.S. develop domestic supplies of raw materials for climate tech, Ben and Axios' Jael Holzman report.

Driving the news: Talon Metals yesterday formally filed paperwork that will launch a state environmental analysis of its proposal to build an underground mine in northern Minnesota.

  • It already counts electric vehicle giant Tesla among its customers, if the project comes to fruition.

Why it matters: Talon sits atop a wealth of high-grade nickel that could, in theory, help the U.S. cut reliance on foreign supplies.

The big picture: U.S. and state regulators now face a test of whether they can advance something with enormous geopolitical stakes and — like many other U.S. mines — locally driven concerns.

What they're saying: “There is bipartisan consensus among elected leaders in the United States that security of supply for the inputs required for clean energy systems is a national priority,” Todd Malan, Talon's head of climate strategy, said in a statement.

Read the whole story

3. Charted: A Texas heat milestone

Weather indicators on record-high temperature day in San Angelo, Texas
Data: NOAA; Chart: Jared Whalen/Axios

The Texas heat wave has set dozens of temperature records and is now forecast to intensify from this weekend into early July, Andrew writes.

The big picture: One of the hottest places in the U.S. on Tuesday was San Angelo, Texas, where the high temperature hit 114°F, breaking its previous all-time record of 111°F.

Zoom in: The relatively dry air near the Mexican border, as measured by the dew point temperature, has allowed air temperatures to soar especially high there.

  • Elsewhere in Texas, the heat has been more sultry, with dew points near 80°F and heat indices above 120°F at times.

What’s next: “Oppressive and persistent heat will become increasingly dangerous and potentially deadly in south and south-central Texas,” the NWS warned Wednesday afternoon, noting “increasing confidence” the heat wave will last into the beginning of the July 4 week and expand in the area.

4. 🏃🏽‍♀️Catch up fast on EV policy

Illustration: Annelise Capossela/Axios

📝 The Treasury Department is getting an earful of ideas from powerful interests on how to implement the climate law's EV purchase subsidies, Ben writes.

Driving the news: Here are a couple more highlights that follow our coverage in Tuesday's newsletter.

  • The United Auto Workers wants Biden administration officials to avoid new trade deals that expand the origin of materials in eligible vehicles. The National Mining Association makes similar points.

The intrigue: The administration is getting pressure in the other direction as nations including Argentina, a big lithium producer, urge new trade deals.

What we're watching: General Motors, Stellantis and other automakers say Treasury needs to move quickly on plans to define "foreign entities of concern" whose batteries and materials are not eligible.

  • "Relevant sourcing decisions are being made now and, in some cases, investments and strategic decisions for U.S. supply chains," GM notes.

Other eye-catching EV policy news:

💬 A pair of major EV startups, Rivian and Lucid, have expanded their D.C. lobbying presence.

  • Rivian has retained the Klein/Johnson Group, whose co-founders are former aides to Senate Majority Leader Chuck Schumer (D) and Sen. John Cornyn, a top Republican.
  • Lucid brought on the Monument Advocacy group.

🛑 The Environmental Protection Agency on Wednesday "finalized biofuel blending standards that drop, for the time being, its proposed plan to incorporate fuels used to power electric vehicles," The Hill reports.

5. U.S. grids aren't ready for climate change

Illustration: Sarah Grillo/Axios

Human-caused climate change is poised to heavily strain U.S. power grids in the coming decades, and vast improvements are needed to enhance reliability and ability to meet increasing electricity demands, experts tell Axios' Jacob Knutson.

Why it matters: The effects of new weather extremes may be seen throughout the summer if intense heat waves trigger energy demand spikes that test the limits of power infrastructure nationwide, officials have warned.

State of play: The ongoing Texas heat wave — which has grid operators urging people to cut power usage — shows these challenges already arriving.

What they're saying: "We're designing our energy systems today for the past 50 years of weather and not the next 50 years of weather, and that's a problem," said Melissa Lott, research director of Columbia University's Center on Global Energy Policy.

Threat level: The North American Electric Reliability Corp., a nonprofit that oversees the reliability of the North American grids, warned in an assessment last month that two-thirds of the continent face an elevated risk of energy shortfalls this summer if extreme heat events occur.

Read the whole story

6. 🏃Catch up fast on tech finance — here and abroad

Illustration: Aïda Amer/Axios

🥡 Boston Consulting Group has a two-pronged deal with L.A.-based direct air capture startup CarbonCapture, Ben writes.

  • Why it matters: The agreement is for 40,000 tons worth of removal over five years, and provide management consulting services. "This represents the second largest publicly announced global direct air capture (DAC) off take deal by volume," the companies said.

And some international deals on our radar...

🚗 "Chinese electric car company Nio announced Tuesday it received $738.5 million in new capital from a fund owned by the Abu Dhabi government," CNBC reports.

⛏️ "Saudi Arabia’s Public Investment Fund is emerging as the leading bidder to acquire a stake in Vale SA’s multibillion-dollar nickel and copper operations," Bloomberg reports.

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🙏 Thanks to Gail Hughes and Javier David for edits to today's edition, along with the talented Axios Visuals team.

🎩 A hat tip to @JakeRudh for today's intro tune.