A weekly five-point roundup of critical events in the energy transition and the implications of climate change for business and finance.
The No Good, Very Bad Quarter for Electric Vehicles Doesn’t Have to Last
What happened: GM withdrew guidance for how many EVs it would sell next year, Ford delayed $12 billion in EV investment, and Elon Musk said building the Cybertruck was going to be a major headache. Momentum appears lost, but all is not hopeless.
Why it matters: The point of s-curves is that for a while at least they appear pretty flat. We’re probably in that stage right now. What’s critical is that giant automakers like GM and Ford, who now have their union troubles mostly behind them, keep investing heavily in new battery plants and the other critical pieces of infrastructure that will allow them to, eventually, stop losing money on every electric vehicle they make. Without that investment, they’ll be left in the dust.
What’s next: Again, we await the first attractive, cost-competitive, non-Tesla made by an American automaker. It’s been too long. (By Patrick George, InsideEVs)
America’s New Speaker of the House Really Hates Environmental Subsidies
What happened: After an often humiliating, drawn-out process, the U.S. House has a new speaker, Louisiana’s Mike Johnson, who has immediately made it clear that many of the Biden administration’s climate subsidies are a top target.
Why it matters: Every bit of IRA funding now has a big target on its back. “While the House measure isn’t expected to pass the Democratic Senate — or receive Biden’s signature — without changes, it represents the Republican’s starting point as they negotiate spending with Democrats ahead of a mid-November government shutdown deadline. Johnson has pledged the House will vote on the remaining spending bills in the coming weeks.”
What’s next: Technically, House Republicans drafted this legislation before Johnson was nominated. The battles over climate subsidies were always going to come but now they’ll be quicker to arrive. (By Ari Natter, Bloomberg)
We Have No Idea If the World’s Largest Carbon Capture Plant Works
What happened: Swiss company Climeworks Orca plant is the largest carbon capture plant in the world and just turned two years old. Yet even its own proponents say that right now it’s “small” and “climatically insignificant”.
Why it matters: Climeworks is trying to put a positive spin on things. It says it’s better at this stage in the technology to stay small and learn fast, rather than scale up quickly and realize you’ve got problems after you’re too big to change much. That’s all well and good, but the fact that the company won’t even reveal how much carbon it’s sucking out of the air suggests it does not want to show exactly how small it really is thus far.
What’s next: Probably a lot of good things. In reality, Climeworks’ strategy is probably the right one. It’s just that progress appears to be so much slower than even the biggest carbon capture proponents might have hoped for. (By Emily Pontecorvo, Heatmap)
Can War Make a Country Greener?
What happened: The long-term implications of a protracted battle between Israel and forces in Palestine won’t be known for a while. In the short-term, however, the Israeli grid is going to get greener thanks to a joint initiative with Greece.
Why it matters: Israel’s main natural gas field is very close to the center of the new conflict. As such, production has stopped, as has exportation of said gas to Egypt. It looks like the dominoes are most likely to fall in a way that increases oil dependency and oil prices. But not for Israel, which will probably accelerate a recent deal with Greece to combine the two country’s electrical grids and therefore increase the volume of power it gets from renewables.
What’s next: Literally nothing good comes of war. It just seems as if an embrace of renewables might be further embraced if Israel can keep the lights on while its neighbors struggle. (By Jeronimo Gonzalez, Semafor)
The Geography of Climate Tech Is Finally Diversifying
What happened: A recent study shows that the ”geographic diversity of climate tech has increased over the last 20 years.” A category the U.S. dominated as of only a few years ago is now spread out over many different countries, including some not in the Big 8, which represent the largest, most developed economies.
Why it matters: “These trends match the ‘rise of the rest’ in overall startup activity (beyond climate tech) that has been observed for some years now. In climate tech, the ‘rise of the rest’ may also reflect the emergence of climate solutions developed for or adapted to local contexts. Localized solutions may be more functional and effective, according to one non-governmental organization.”
What’s next: Look for America’s dominance to keep slipping below the 50% of all global investment line, a trend that should thrill American climate policymakers. (By Deloitte)