”The cost of climate inaction is far greater than the cost of taking action.”
Month: November 2021
ABC News: Report on Wind Energy
B for effort. Somebody needed to review the script and make sure they had “megawatts” and “gigawatts” straight.
In Syria: Reservoirs Disappearing
Our Choice for Decarbonizing: Double Diamond, or Sheer Cliff
The jarring graph above is a great visual representation of the increasingly steeper slope of action needed to stabilize carbon emissions. Each year of delay means that future emission cuts must be an increasingly steeper slope, as Zeke Hausfather recently described on twitter.
If emissions had peaked back in 2000 we would be skiing down a bunny slope toward 1.5C. Today we face a double black diamond, and in a few years it will be a cliff.
We are almost certainly going to overshoot 1.5C and need large-scale permanent carbon removal to get back down.
Scenarios commonly used to limit warming to 1.5C include a lot of late century negative emissions – sucking a quarter to a half of current emissions out of the atmosphere each year by 2100 – in order to make near-term reductions more plausible:
There is, of course, no guarantee that negative emissions of that scale will pan out, but any chance of ultimately limiting warming to 1.5C likely requires both speeding up emissions reductions significantly and building a robust carbon removal industry later in the century.
Thankfully, the pathways to 2C with limited net-negative emissions are a lot less daunting, but every year global emissions continue to rise or stay flat it too becomes much more difficult to achieve:
It is worth mentioning that reducing global emissions 20 years ago would have been much harder than today. China was still industrializing rapidly through expanded coal use, clean energy was expensive, and political will was lacking.
Continue reading “Our Choice for Decarbonizing: Double Diamond, or Sheer Cliff”Its much easier to mitigate today, but at the same time the emissions that have accumulated in the atmosphere over the past 20 years make it much more difficult to meet our ambitious climate mitigation targets.
Vanessa Nakate: Ugandan Activist – I Beg You to Prove Me Wrong
Another powerhouse voice arises.
GLASGOW — Vanessa Nakate, a climate activist from Uganda, told the United Nations climate summit on Thursday that she and her peers did not believe the pledges that ministers, corporations and banks made this week to move aggressively on climate change.
But they want to.
“I’m actually here to beg you to prove us wrong,” Ms. Nakate said. “God help us all if you fail to prove us wrong.”
In one of the most powerful speeches to date before the U.N. climate summit, Ms. Nakate, 24, told diplomats that leaders already are trying to brand the conference, known as COP26, a success, but that she and her peers weren’t buying it.
“Let us be honest,” she said. “We have been here before.”
After a quarter of a century of climate conferences and new annual commitments, planet-warming greenhouse gas emissions continue to rise. “This year will be no different,” Ms. Nakate said.
Supreme Court Could End Regulation of GhG, and All Polluters
The Supreme Court agreed to hear a case, West Virginia v. EPA, challenging the Environmental Protection Agency’s authority to regulate greenhouse gases as pollutants.
The case presents an opportunity for the Court to overturn key climate precedents and potentially change the relationship between federal agencies and Congress. The decision could have far-reaching consequences for federal climate policy and perhaps even for federal agencies more broadly.
How did we get here, how far might the Court go, and what consequences might the case have for climate change regulation and executive branch authority?
EPA’s authority to regulate greenhouse gases: Massachusetts v. EPA
In a groundbreaking decision in 2007, the Supreme Court held 5-4 that EPA has authority to regulate greenhouse gases under the Clean Air Act. During the Bush administration, environmentalists petitioned the agency to issue a rule on the regulation of greenhouse gases. The Bush EPA denied the petition, and environmental groups, states, and local governments challenged that decision in court. The Supreme Court’s decision turned on whether greenhouse gases like carbon dioxide fall under the definition of “air pollutants,” which the Clean Air Act authorizes EPA to regulate.
The Court concluded that carbon dioxide and other greenhouse gases are air pollutants under the Clean Air Act’s definition, and also noted that the EPA cannot refuse to regulate greenhouse gases for policy reasons outside the Clean Air Act itself, as the Bush administration had done. The Court ordered EPA to either issue a finding that greenhouse gases are dangerous to the public health and welfare, the first step toward regulation, or to give a reasoned explanation for why greenhouse gases do not meet the threshold of endangerment outlined in the Clean Air Act. The agency ultimately found that greenhouse gases are dangerous to the public health and welfare, which formed the foundation for EPA’s regulation of greenhouse gases.
That Supreme Court’s ruling in Massachusetts v. EPA was a 5-4 decision, and environmental advocates leading up to it were not at all certain that they would win the case. In fact, the case was controversial at the time because many environmentalists worried that it would result in a harmful adverse ruling. The four liberals on the Court in 2007, Justices Souter, Ginsburg, Breyer, and Stevens, were joined by Justice Kennedy to form a majority. But Chief Justice Roberts and Justices Thomas, Scalia, and Alito dissented.
Chief Justice Roberts’s dissent (joined by Justices Scalia, Thomas, and Alito) argued that the states, local governments, and environmental groups challenging the EPA should not have been allowed to sue in the first place because they lacked standing: One requirement of standing is a “concrete and particularized” injury. Chief Justice Roberts argued that harms from climate change affect everyone, so the injury in question was not sufficiently individualized and personal to support a lawsuit.
Continue reading “Supreme Court Could End Regulation of GhG, and All Polluters”Justice Scalia’s dissent (joined by Chief Justice Roberts and Justices Thomas and Alito) focused on the Clean Air Act and argued that the Act is meant to address conventional air pollutants that harm human health directly through exposure, such as inhalation. He maintained that the Act was not meant to address the broader issue of climate change, and that greenhouse gases therefore did not fall under the definition of “air pollutants.”
Texas Ratepayers will Pay for Blackout, Enrich Gas Barons
I’ve been following the emerging story of rising gas bills that consumers across the country will be paying this winter.
The larger picture is that, as gas exports, via Liquified Natural Gas tankers, have risen over the last 5 years, consumers in the US are now competing with Europe, and particularly, Asia, for gas that in the past had no pipeline to the larger world.
I’ll be fleshing this out in coming weeks, but look for the usual suspects to blame higher prices on the (non-existent) Green New Deal.
Of course, everything is bigger in Texas, so ratepayers there have the added burden of paying for the windfall profits gas sellers made when pipelines and wellheads froze in the February, 2021 blackout.
Oil and gas regulators at the Railroad Commission of Texas cleared the way on Wednesday for $3.4 billion to be paid to natural gas companies by raising bills for ratepayers.
The $3.4 billion is part of the debt that gas utilities unexpectedly owed suppliers after gas prices skyrocketed during February’s winter storm and blackout. The cost may be included on Texans’ gas bills for up to the next 30 years.
The move, approved unanimously by the three Railroad Commission members, was the most recent step in a process state legislatures approved last spring known as “securitization.” It essentially turned blackout-related debt owed to natural gas companies and others into low-interest bonds guaranteed by the state.
Those bonds are then paid back over decades by charging higher bills to consumers. The Railroad Commission vote today approved the issuance of those bonds by another state group, the Texas Public Finance Authority.
During the winter storm, tight gas supply and high demand translated into historic high prices as utilities struggled to bring gas to residential customers and electric companies scrambled to secure fuel for their power plants.
At times, gas traded 150 times higher than it had before the crisis.
Those prices made massive profits for gas companies, estimated at $11 billion earlier this year by Bloomberg News. They also led to accusations of price gouging, which would have been illegal if it had been been applied to other products like gasoline.
“It would be like you’re going to fill up your gas tank during the storm … and instead of paying $50-ish to fill up your tank, the register there reads: ‘Give me $6,000 to $7,000,’” Paula Gold-Williams, former head of San Antonio’s publicly owned utility, told KUT in July.
Texas’ regulated gas distribution utilities, which don’t make money from higher fuel costs, typically pass those costs on to consumers. For those utilities and their ratepayers, securitization was pitched as a way to spread out the pain of paying the massive price tag of the blackout.
While the Railroad Commission approved the securitization of $3.4 billion, it remains unclear exactly how much individual ratepayers will see their monthly bills increase and when.
Texas Gas Service, which services the Austin area and is the state’s third largest gas distributor, says it doesn’t know yet what the impact on customers’ bills will be.
“The Railroad Commission has 90 days to issue a financing order which instructs the Texas Public Finance Authority to issue bonds,” Texas Gas Service said in an email. “After that, the Texas Public Finance Authority has 180 days to issue the bonds. As this process unfolds, the length of time for recovery and the rate charged to customers will be determined.”
Continue reading “Texas Ratepayers will Pay for Blackout, Enrich Gas Barons”In a legislative hearing after the storm, Texas Gas Service told lawmakers that it paid 22 times more than usual for gas during the freeze and blackout.
Music Break: Black Pumas – Fast Car
Making the Sausage at Glasgow
I’m somewhat fascinated with the business reporting from the Glasgow COP meeting.
First of all, Diana Olick of CNBC is doing great work on a number of fronts, secondly, the process that you’re seeing is a bunch of business leaders who generally get that climate is a problem, a big one, while they are trying to steer these giant ships, (Pepsico in the clip above) thru a global transition the likes of which no one has ever seen.
So the conversation includes things like, what concerns does a giant food company have about extreme weather, and water supplies? Where does the plastic for your packaging come from, what is the composition of your transport fleet, (they are going to be buying Tesla electric trucks), and the company’s need for policy makers to pivot the wider grid to renewables to lower the overall footprint of the operation, beyond what the company can do by itself.
It may possibly be that all this is just rearranging the deck chairs on said giant ship, that the Extinction Rebellion demonstrators are right – or it may be that this is just what the “in between” process looks like as we move toward a decarbonized goal as the vast majority of global citizens are still eating, drinking, driving, and demanding services that use energy in one form or another.
I offer this as just food for thought on the complexity of speeding this process up (as we must), seeing as there is no foreseeable circumstance where everything comes suddenly to a crunching, or crunchy, halt and the green millennium magically dawns.
Looking over the products below, I did not realize that my favorite hummus, which I eat to lower my meat consumption and carbon footprint, actually comes from this giant corporation. Food for more than thought.
Cost of Capital Cramps Fossil Industry
Ten years ago, the “cost of capital” for developing oil and gas as compared to renewable projects was pretty much the same, falling consistently between 8% and 10%. But not anymore.
The threshold of projected return that can financially justify a new oil project is now at 20% for long-cycle developments, while for renewables it’s dropped to somewhere between 3% and 5%, according to Michele Della Vigna, a London-based analyst at Goldman Sachs Group Inc.
“That’s an extraordinary divergence, which is leading to an unprecedented shift in capital allocation,” Della Vigna said. “This year will mark the first time in history that renewable power will be the largest area of energy investment.”
Will Hares, an analyst at Bloomberg Intelligence, said pressure from ESG investors is the best explanation for the widening difference between dirty and clean.
“Oil companies are finding it increasingly difficult to raise financing amid rising ESG and sustainability concerns, while banks are under pressure from their own investors to reduce or eliminate fossil-fuel financing,” Hares said.
This is resulting in more expensive debt financing (in some cases double-digit coupons), which, when coupled with depressed equity valuations, leaves most oil companies facing higher costs for capital, Hares said.
Climate finance has been a hot topic at the COP26 meetings in Glasgow, Scotland. Government leaders from less-developed nations have at times expressed fury that rich countries repeatedly break promises to mobilize funds to help them decarbonize and adapt to a warming planet.
More such pledges were made last week—only this time they came from the financial industry.
Mark Carney, the former central banker turned climate envoy, said more than 450 financial firms representing $130 trillion of assets have pledged to bring their lending and investing activities in line with the goals of the 2015 Paris agreement. The announcement, however, didn’t mollify skeptics who are quick to point out that details on how the industry would actually meet this target were lacking—a hallmark of the greenwashing scourge.
Goldman Sachs estimates that about $56 trillion, or $1.5 trillion to $2 trillion a year, will be invested in renewable energy, bioenergy and other clean-energy infrastructure projects between now and 2050. Spending is expected to peak between 2035 and 2040, driven largely by expenditures on power networks, charging networks, building upgrades and a massive expansion of renewable power sources such as clean hydrogen, Della Vigna said.
“It’s significant that such a large share of the financial sector has recognized its role in driving the climate crisis and the need to wind down its financed emissions,” said Ben Cushing, a campaign manager at the Sierra Club, an environmental pressure group. “But achieving net zero by 2050 and staying within 1.5 degrees Celsius of warming means stopping financing for fossil-fuel expansion today. That’s the key test for whether these commitments are aligned with reality.”
It’s likely that given this backdrop, the spread between oil, gas and coal and renewable energy will continue to diverge as banks change their financing habits. Indeed, markets may end up killing off fossil fuels before governments do.