A weekly five-point roundup of critical events in the energy transition and the implications of climate change for business and finance.
Another First for China: The World’s Leading Nuclear Producer
What happened: China has tripled its nuclear power capacity in just the past decade, and projects to replace the United States as the world’s leader in another 10 years.
Why it matters: It’s not China’s most ambitious power generation target. That would be solar capacity, which the country aims to double in only the next three years. But it’s a further sign that stalled reform and regulation stateside is allowing China to increase its independence, and decrease its reliance on fossil fuels, far faster than most ever dreamed.
What’s next: American nuclear proponents using this as a marketing tool for increased domestic capacity. (By Karina Tsui, Semafor)
Easing the Chinese Critical Minerals Bottleneck With a New Partner
What happened: The U.S. and Saudi Arabia are set to announce a deal that would allow both to buy critical minerals needed for the energy transition from African nations, reducing their dependency on China.
Why it matters: American companies aren’t really allowed to invest in countries with rampant corruption. But if an ally, like Saudi Arabia, buys pieces of those companies and then sells what those companies make to American companies, then you have yourself a successful cutout. What’s more, you get to strengthen a strained relationship with an ally while potentially weakening your biggest competitor, China.
What’s next: Competition between Saudi Arabia and China for who can offer the better deal to African countries that may now be able to keep more of the revenue they make and possibly escape the resource curse. Big emphasis on “possibly”. (By Summer Said, Wall Street Journal)
California Wants to See Your Corporate Climate Disclosures
What happened: Two landmark bills in the California assembly would help untangle the mess that is understanding a corporation’s climate footprint, essentially forcing almost every big company in the world to report their greenhouse gas emissions.
Why it matters: “These new disclosure laws would also ripple through the currently opaque practice of environmental, social, and governance, or ESG investing, making it easier to scrutinize claims made by index fund providers. As Madison Condon, a Boston University law professor summed it up to me, ‘How is Blackrock supposed to report on the emissions of its S&P 500 portfolio if the S&P 500 companies have not been required to report their emissions?’”
What’s next: Soon every consumer may be able to add “carbon footprint” to their list of reasons why they should buy one t-shirt (or taco or tow-hitch) versus another.. (By Emily Pontecorvo, Heatmap)
Carbon Capture Is So Much Harder Than Emitters Made It Seem
What happened: $83 billion and counting of corporate money has gone into carbon capture, the oil and gas industry’s preferred form of emissions reduction. So far that’s resulted in exactly 0.1% of emissions captured.
Why it matters: It allows emitters to keep doing what makes them gobs of money. Yet it has obvious drawbacks relative to abandoning carbon altogether. “One of the biggest problems is that unlike technologies such as solar, which have reached mass scale and are now close to drop-in solutions, CCS is still a bespoke suite of processes. It’s expensive, site-specific and has needed custom engineering virtually everywhere it’s been tried.”
What’s next: At some point, promise has to meet production, otherwise every rosy prediction of emissions reduction will be made to look ridiculous. (By Stephen Stapczynski, Bloomberg)
Europe Is Finally Worried China Is Selling It Cheap Cars
What happened: The European Union is launching an investigation into electric car subsidies after a flood of Chinese competitors began entering, and sometimes dominating, its market.
Why it matters: Share of Chinese automakers sales in Europe are set to double in the next year. The EU could’ve seen this coming for years, with many European automakers signing JVs with Chinese automakers in an attempt to piggyback on the huge cost savings made by the latter. But now the EU is saying that government subsidies are largely to blame for these cheap vehicles and wants an investigation in lieu of what will surely be action.
What’s next: Something that looks like America’s own form of protectionism against cheap Chinese competitors. We’ve got higher tariffs, but they’ll have something different. (By Kevin Whitelaw, Bloomberg)
