A weekly five-point roundup of critical events in the energy transition and the implications of climate change for business and finance.
At Detroit’s Annual Car Show, EVs Are Pretty Much a No-Show
What happened: Just a week before UAW announced strikes against the top three domestic car manufacturers, a bunch of people got together in Detroit for the celebrated annual car show and were entirely underwhelmed. Especially concerning: no new EV models to speak of.
Why it matters: The equivalent version in Europe happened in Munich a few weeks earlier and was positively alive with new models, many of them EVs. Detroit had almost nothing to show besides a few updated ICE vehicles. The proliferation of mostly Chinese-made, affordable cars may be terrifying for European manufacturers, but what’s scarier is an American auto base that has nothing interesting or new to offer consumers.
What’s next: A lot of promises about how Ford and GM are only a few new models away from unseating Tesla. Which has been the case now for a decade and counting. (By Heatmap, Kevin Williams)
The UK Is So Far Ahead On Its Climate Goals It’s OK Going Backward
What happened: On the eve of this year’s World Climate Summit, British Prime Minister Rishi Sunak surprised observers by pushing back by five years the island nation’s ban on gas vehicle sales to 2035.
Why it matters: “Britain was the first major economy to create a legally binding 2050 net zero target and emissions have fallen almost 50% since 1990 as coal power plants closed and offshore wind power took off. Sunak says that puts Britain ahead of other major economies.But the government’s own independent climate adviser said in June that Britain was not doing enough to hit its targets and it said on Wednesday the announcement was likely to take Britain further away from being able to meet its legal commitments.”
What’s next: Those large manufacturers that were already lagging behind on the transition to EVs may be able to point to this and say they were right all along. (By Kate Holton, Reuters)
What You Can Call ESG Is Changing, Again
What happened: “The SEC voted on Wednesday to impose the most sweeping overhaul for fund-labeling regulations in more than two decades. Backers say the measures in particular will help rein in overblown claims about environmental, social or governance investments.”
Why it matters: The fact that it was well known that so many funds and investments labeled as ESG were anything but was clearly having a negative effect. Outside of some small fines, the SEC’s only other course of action was to implement these standard review and rebalancing policies.
What’s next: More disclosure doesn’t necessarily mean more truth. But it couldn’t hurt. (By Austin Weinstein, Bloomberg)
Climate Week Is Actually Fun, Unlike Its Counterpart
What happened: While countries get scolded for missing goals at the U.N. General Assembly, a record number of entrepreneurs have signed up for the concurrent Climate Week conference.
Why it matters: “The vibe in the climate-tech scene is the latest proof that the sector is feeling recession-resistant and thriving off the jolt of the Inflation Reduction Act. The string of heat waves, floods, and other disasters that have taken place this summer are also tailwinds for the climate tech industry, drawing talent and capital who feel the urgency of the moment.”
What’s next: Considering most of the billions in funding announced during the conference is for the seed stage, it’ll be a long time before we truly know. (By Tim McDonnell, Semafor)
The Home Insurance Bubble Is About to Pop
What happened: A new report says that even though home insurance rates have skyrocketed in the past few years, they still don’t adequately price in the risk presented by wildfires, floods, and other climate-related damages.
Why it matters: “Until now, state regulations that cap increases in insurance premiums and subsidized insurer-of-last-resort programs have hidden the magnitude of the problem, the report’s authors say. But as the number of disasters and the related damages keep rising, they predict, the insurance market will undergo a major adjustment and rates will surge, popping what the nonprofit calls a climate insurance bubble.”
What’s next: Prices high enough to match the rise in anxiety. (By Leslie Kaufmann, Bloomberg)