Apr 24, 2020

Axios Generate

Good morning. Today's Smart Brevity count: 1,333 words, 5 minutes.

Check this out: "Axios on HBO” is expanding its 2020 season and moving to a new night and time! We return with can't-miss episodes airing biweekly, starting Monday, April 27 at 11 pm ET/PT on all HBO platforms.

And at this moment in 1972, Roberta Flack was into her six-week run atop Billboard's Hot 100 with this lovely tune...

1 big thing: COVID-19 is a climate Rorschach test

Illustration: Sarah Grillo/Axios

Here's one interesting strand in the huge and complex question of what kind of lessons the pandemic might offer about confronting global warming: It's amplifying the debate over the relevance of individual behavior.

Driving the news: Lockdowns and curtailed economic activity are driving carbon emissions downward.

  • Some analyses see a 5%-6% year-over-year drop in global CO2 emissions in 2020, the largest on record, and even those estimates assume substantial recovery of activity later in the year.
  • But the reductions — occurring for tragic reasons that no sane person celebrates — are a sobering reminder of the climate challenge, too. Experts warn that holding warming significantly in check requires real cuts every year.
  • "By 2030, emissions would need to be 25 percent and 55 percent lower than in 2018 to put the world on the least-cost pathway to limiting global warming to below 2˚C and 1.5°C respectively," the UN estimated last year.

Why it matters: The real-time experiment is lending itself to different takes on whether individual steps — as opposed to only systemic policy changes, cracking down on polluters and tech innovations — can play a major role in cutting emissions.

It's part of a wider debate over whether an emphasis on consumer choices and behavior — avoiding cars or going electric, flying way less, cutting out meat, living small and other steps — is misplaced or even counterproductive.

What they're saying: [T]he idea that our individual actions don’t particularly matter is fundamentally bogus. And over the past several weeks, the coronavirus has been revealing that in unexpected ways," Politico Magazine's Michael Grunwald wrote this week in a long piece I'm just partially summarizing.

  • He forthrightly notes there's "no way to solve climate change without major systemic change."
  • But the piece uses the current pollution cuts as a launchpad to challenge some activists who say an emphasis on individual behavior distracts from focusing on big fossil fuel companies and pushing for sweeping government policy changes.

But, but, but: "If this is all we get from shutting the entire world down, it illustrates the scope and scale of the climate challenge, which is fundamentally changing the way we make and use energy and products," Carnegie Mellon University energy expert Costa Samaras tells E&E News of the current reductions.

  • The story points out that "even today, with millions of people around the world stuck at home, the world economy is consuming vast quantities of fossil fuel and emitting large amounts of CO2."
  • "The dynamic highlights the limits of individual action and the need to transform how the economy is fueled," they report in summarizing comments from Indiana University professor Shahzeen Attari.

Go deeper: The climate news and analysis website Carbon Brief, which produced a widely circulated estimate of CO2 cuts, took the pulse of a bunch of experts on the role of lifestyle changes.

"We need both significant government policies and important personal behaviour changes," said Christiana Figueres, the former top UN climate official.

2. An ominous start to big oil earnings

The big multinational oil-and-gas company Eni posted a roughly $3.15 billion net loss for the quarter on Friday, citing the combined effect of the "ongoing economic recession" due to COVID-19 and low prices.

Why it matters: It's a sign of what's to come for the sector in this earnings period and going forward for a while.

Bloomberg notes that it "provides signals for the rest of the industry, with the worst impact of oil’s historic plunge likely in the coming quarters."

However, Eni said it expects a "gradual recovery in global consumption of oil, natural gas and power in the second half of the year."

Driving the news: The Italy-based company also deepened its planned capital spending cuts. It now expects to cut spending by 30% this year compared to prior plans and 30%-35% next year.

What's next: Larger oil-and-gas majors like will report their Q1 results over the next couple of weeks. U.S.-based majors Exxon and Chevron both report next Friday.

Go deeper:

3. Coronavirus collides with renewables deadlines

llustration: Sarah Grillo/Axios

The financial toll brought on by the coronavirus pandemic could hinder plans for countries' ambitious renewable energy goals, as jobs disappear amid strict nationwide lockdowns, Axios' Orion Rummler reports.

Driving the news: Milestones for low-carbon energy policies in China, India and the European Union, which all were expected to drive new projects this year, are scheduled to expire soon.

The big picture: The growth previously forecast for global solar and wind projects is expected to be "wiped out" this year and instead round out to about the same as it was in 2019, consultancy Rystad Energy said in March.

Next year will be even worse, with a 10% cut in solar and wind ventures compared to 2020 as investments and construction shrink.

Where it stands: In the face of this projected wipeout, deadlines for renewable-energy plans are fast approaching, writes Heymi Bahar, a top International Energy Agency analyst.

Go deeper in the Axios stream.

4. The post-pandemic transit future

CityLab has some fascinating reporting on European cities making changes to their transit policy that will outlast the immediate crisis and, more intriguingly, perhaps become permanent after initial reemergence from lockdown.

Driving the news: It notes that in the near term, transit policies and systems will change in recognition that people should not be — and don't want to be — crammed into buses and trains cheek-by-jowl. (Axios' Kim Hart has looked at this from a U.S. standpoint)

But more broadly, CityLab reports that cities like Milan are using the time to "reevaluate" their relationship to cars, which could "become a more popular post-pandemic commuting mode when transit-anxious workers venture back to the office."

How it works: Several cities like Brussels and Paris, to avoid more congestion post-pandemic, are taking steps to give over more of the streetscapes to biking and walking.

CityLab reports that while it's "not clear if all these measures will be retained once the threat of coronavirus has receded" and social distancing wanes, they reflect trends apparent before the crisis.

What we don't know: What the pandemic will ultimately mean for carbon emissions from transportation.

  • As we've explored in prior coverage, it's also easy to see post-pandemic life as a net-negative for mass transit as people naturally avoid close contact in favor of cars.
  • On the other hand, some see telecommuting and other behaviors proving that curb oil use proving sticky post-COVID.

Shrug emoji. Stay tuned.

5. A test run for huge climate investments

The coronavirus crisis is a dress rehearsal for the climate crisis: It will help show us not only what is possible, but also, crucially, whether or not those actions work, Axios' Felix Salmon reports.

Why it matters: There has never been a better time for big financial ideas to become reality.

  • The natural conservatism of rich governments has evaporated in the face of the global pandemic. They've already implemented more than $8 trillion in fiscal action, and many more policies are being proposed.
  • The biggest fiscal idea of them all, the Green New Deal, will have to wait at least until after the pandemic has been brought under control. But the main opposition to the GND is centered on its cost, and the potential negative consequences of enormous government borrowing and spending.
  • We're about to find out, in countries around the world, whether massive government deficits prove to be inflationary. If they do, that's bad news for the GND. But if they don't, many of the arguments against it are effectively defanged.

Go deeper in the Axios stream

6. More notes from crude's collapse

Reuters has news about the large independent player Continental Resources, reporting...

"The largest oil producer in North Dakota has halted most of its production in the state, notifying some customers it would not supply crude at current pricing, according to people familiar with the matter."

Meanwhile, Bloomberg reports: "Treasury Secretary Steven Mnuchin said he’s considering the creation of a government lending program for U.S. oil companies, who are looking for federal aid as they cope with a devastating plunge in prices."