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Daily Briefing |

TODAY'S CLIMATE AND ENERGY HEADLINES

Briefing date 17.08.2022
Biden signs Democrats’ sweeping bill to tackle climate change, lower health-care costs

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Every weekday morning, in time for your morning coffee, Carbon Brief sends out a free email known as the “Daily Briefing” to thousands of subscribers around the world. The email is a digest of the past 24 hours of media coverage related to climate change and energy, as well as our pick of the key studies published in peer-reviewed journals.

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News.

Biden signs Democrats' sweeping bill to tackle climate change, lower health-care costs
The Washington Post Read Article

US president Joe Biden has signed into law the Inflation Reduction Act, an ambitious measure focuses largely on tackling climate change, as well as aiming to lower prescription drug prices, cut the deficit, hold back inflation and place a minimum tax on profits of the largest corporations, the Washington Post reports. The newspaper notes that it achieves “many of the same goals” of the Build Back Better (BBB) plan that was initially proposed by the Biden administration, including spending about $370bn on climate change and clean-energy production (although this is markedly less spending than featured in BBB). Senate majority leader Chuck Schumer referred to the bill as the “boldest climate bill ever”. The Independent quotes Biden calling the legislation “one of the most significant laws in our history” and stating that “with this law the American people won and the special interests lost”. Biden officials say the legislation’s climate components will create high-paying union jobs in an emerging clean-energy economy, the New York Times reports. According to Reuters, Biden told West Virginia’s Joe Manchin that he “never had a doubt” as he signed the bill, referencing the months of back-and-forth with the Democrat senator, who has stakes in the coal industry and has blocked the passage of more ambitious legislation. The president also used the moment to attack his opposition, noting that “every single Republican in Congress voted against this bill”, adding that they chose to side with “the special interests”, the newswire continues. Politico has a piece about how Republican-led states “whose governors hate the bill” stand to benefit greatly from it, with renewable power likely to “add jobs, lower electricity costs and stave off blackouts in many red states like Texas, Nebraska and Oklahoma”. In a separate piece, the Washington Post talked to former Democrat vice president and veteran climate campaigner Al Gore, who tells the newspaper: “I never expected the struggle to pass this kind of legislation. It took so long.” While Gore says that US democracy has been “severely degraded”, he states that the “ability of the fossil fuel industry and their lobbyists to stop climate action has been overcome, at least in this instance”. Bloomberg has a piece about the lobbying efforts of Bill Gates and others to convince Manchin to support climate legislation.

The Guardian notes that experts have estimated the bill could reduce US emissions by about 40% by 2030, compared with 2005 levels, which is close to the national target to emissions in half by 2030. Associated Press has a piece based around new analysis by Climate Action Tracker, which concludes that while overall US action remains “insufficient”, the new legislation represents significant progress and should reduce future global warming. Bloomberg has a piece comparing US spending on climate to its closest rivals, noting that while the new bill includes a lot of money, “China and the EU are spending as much or more on the transition away from fossil fuels”.

The Independent notes that the bill contained “around $5bn” in additional for addressing droughts, noting that this was added in on the insistence of Arizona senator Kyrsten Sinema, a key holdout who could have prevented the bill being passed. It states that western states such as Arizona, California, Nevada, Utah and New Mexico are all in drought conditions ranging from moderate to exceptional this summer. Meanwhile, Reuters reports that the US government has spared seven western states from mandatory cutbacks to their use of Colorado River water “for now”, adding that they must work out their own conservation strategies for its dwindling resources during drought conditions.

With the landmark bill finally passed, Reuters says environmental groups are “turning their focus to their next fight”, namely halting efforts to fast-track permits for major infrastructure projects including fossil fuel pipelines and highways. It notes that frontline and Indigenous groups felt “betrayed” by the new bill, which to appease Manchin included a “pledge to work on legislation for speeding up the years-long process for infrastructure permits”. Finally, while the Financial Times notes that there has been widespread praise for the new bill, a “host of obstacles may stand in the way” of its success in promoting clean energy uptake, including “tariffs and import controls that are driving up the cost of solar panels to state land-use laws over which the federal government has no control”.

Germany to keep last three nuclear-power plants running in policy U-turn
Wall Street Journal Read Article

According to the Wall Street Journal, German government officials have stated that Germany plans to postpone the closure of the country’s last three nuclear power plants amid fears of energy shortages over winter. It says the decision should be formally adopted by German chancellor Olaf Scholz’s cabinet and would likely require a parliamentary vote. An assessment of Germany’s energy needs that will be concluded in the coming weeks is also needed to make the decision, says the outlet. “The reactors are safe until 31 December, and obviously they will remain safe also after 31 December,” a senior official is quoted as saying. The article explains that the extension would only be for a few months. Leading figures in the Free Democratic party, the government’s third coalition partner, have said the plants should run into 2024, adds the newspaper. It notes that a recent survey by the Forsa Institut polling group showed three-quarters of Germans wanted the planned reactor closures to be postponed. However, Der Spiegel quotes Lower Saxony’s energy and environment minister Olaf Lies saying that “the Emsland reactor will go offline at the end of the year. Anything else makes no sense”.

Meanwhile, Reuters reports that Germany signed a memorandum with major gas importers Uniper, RWE and VNG to keep two floating liquefied natural gas (LNG) terminals fully supplied from this winter until March 2024 “in a bid to cut reliance on Russian fuel”. In a statement announcing that two floating LNG storage and regasification units would operate at full capacity from year-end, German economy minister Robert Habeck said: “There is no guaranteed scenario for [energy supplies this] winter, the challenge is way too dynamic for that”, reports Montel. It adds that the Bundesnetzagentur, Germany’s network regulator, had already said “the country faced rationing over the December-March period unless it cut gas demand by a fifth”, with Germany at the second stage of a three-stage gas emergency plan. The Daily Telegraph carries a piece by world economy editor Ambrose Evans-Pritchard titled, “Germany is the surprise success story of this energy crisis”, noting that Germany’s “response is a messy mix of improvised policies that looks very British”. The article compares Germany’s Left-led government spending on energy subsidies with the Tories’ expenditures: around 1% of GDP compared to 1.4% in the UK, according to Andrew Kenningham from Capital Economics. However, the article notes that the result has not been the same: as of June, German prices were up 43% for gas and 22%for electricity, compared to 95% and 54% in the UK, respectively.

In more energy news, Deutsche Welle reports that a recent German poll showed that just 27% of respondents embraced fracking as a short-term energy solution – compared to 81% supporting an expansion of wind energy. “Fracking does not cause any relevant environmental damage under modern safety standards”, Torsten Herbst, parliamentary director of the Free Democratic party, opined in a June interview with the German weekly newspaper Welt am Sonntag. However, DW notes that Habeck, who is also a Green Party member, disagrees with his coalition partners that fracking is a potential energy crisis solution: “The debate about fracking is of no use to us at all right now,” he said in July.

Finally, Die Zeit reports that the EU “is pushing” for value-added tax in the gas levy for German customers, saying that “there is no way for an exception to this type of tax”. The outlet adds, “this means that [German] federal finance minister Christian Lindner failed in his request that the EU should make an exception for the levy”. Bild details that “from October, the new gas surcharge will result in hefty additional costs – 2.4 cents per kilowatt hour”. It quotes Scholz, who said: “I am very happy that the levy was not as high as some speculated in recent days”. However, the media outlet notes that Scholz “predicted in July the gas levy would be significantly lower”, referring to his statement that a family of four will probably be burdened with additional costs of “€200 or €300” per year due to the levy. But, according to price comparison website Check24, “families are now threatened with additional costs of an average of €576”, says Bild.

UK: Green Tories call for next prime minister to take urgent action to insulate homes
The Guardian Read Article

The Conservative Environment Network (CEN), which has the support of half the backbench parliamentary party, has released new proposals calling on the next prime minister to “take urgent action to insulate more homes and scale up the installation of heat pumps to help poorer households with energy bills”, the Guardian reports. The 133 MPs say the plan would help the nation achieve its net-zero target and could be rolled out in parallel with measures to directly help with this winter’s fuel costs, the piece adds. According to the newspaper, the move marks “the latest stage in a fightback by environmental Tories amid signs the race to replace Boris Johnson could lead to green measures being rolled back”. BusinessGreen also has a piece on the £9bn “winter bills crisis action plan”, which it says would also provide “longer-term clarity to encourage green investment”.

In more UK news, there is continued coverage of Labour’s energy strategy, which unsurprisingly has been roundly rejected by the two Conservative candidates to be prime minister. Sky News reports that the leadership race frontrunner Liz Truss has described the plan, which includes freezing the energy price cap and a new windfall tax on oil-and-gas companies, as “sticking plasters” on soaring household bills. She told reporters that her priority would be “reducing taxes” which would “solve this problem for the long term”. Bloomberg reports that the other leadership contender, Rishi Sunak, has also ruled out Labour’s proposals, instead repeating his commitment to target support at the poorest households and pensioners. According to the Times, Sunak also took aim at his rival’s plan, stating that millions of pensioners and middle-income households would be more than £2,000 worse off under Truss “as he mounts a last-ditch cost of living offensive”. The Press Association also reports that the Labour leader Sir Keir Starmer has accused both Truss and Sunak of lacking ideas to solve the crisis. The Guardian reports on polling that suggests more than two-thirds of Conservative voters say that the government should temporarily renationalise energy companies if they cannot offer lower bills – an idea recently put forward by former Labour prime minister Gordon Brown.

Meanwhile, the Independent reports that the Green party has released its own ideas for dealing with the energy crisis, including nationalisation of the Big Five energy companies and cutting energy prices to last year’s levels. The Herald reports that Scottish first minister Nicola Sturgeon will convene a summit with energy suppliers as rising bills are expected to go up further. All of this comes as the Press Association reports on new dire warning about rising energy prices, with an estimate from energy consultancy Auxilione that average households could be facing an annual energy bill of £4,650 from January and £5,456 from April amid spiking natural gas prices.

Russian gas exports slump by a third in blow to Putin
The Daily Telegraph Read Article

Gas production has fallen at Russia’s state company Gazprom as it struggles to replace European buyers, according to the Daily Telegraph. The newspaper says that Russia has been accused of restricting gas supplies to Europe “as it weaponises energy as part of its war against Ukraine”, but notes that overall output this year has been 13% lower than the same period last year. “Gazprom has talked up its growing exports to China via the Power of Siberia pipeline, which sends gas to China from fields in Russia’s east. However, exports to China are currently relatively small compared to Russia’s normal exports to Europe,” the article states. Meanwhile, Reuters reports that Gazprom has warned that European gas prices could spike by 60% this winter, as the company’s own export and production continues to fall amid Western sanctions.

Caribbean nations should push for climate finance at COP27, Bahamas PM says
Reuters Read Article

Caribbean countries should pressure developed nations to provide more climate finance at the upcoming COP27 climate talks in Egypt, the Bahamas prime minister Philip Davis told a summit of regional officials, according to Reuters. The prime minister said that despite being pleased with recent action by the US and Australia, he was “commitment-fatigued and…pledge-fatigued”, adding that rich nations had still not met a promise to provide $100bn in climate finance to developing countries by 2020, the newswire continues. According to the Miami Herald, Davis added that the threat to Caribbean nations by climate change is “existential”, adding that “this is the front lines”.

Comment.

Labour has a plan to freeze bills and secure Britain’s energy supply. Why doesn’t the government?
Ed Miliband, The Guardian Read Article

Labour’s shadow climate minister Ed Miliband has penned an article for the Guardian in which he takes aim at the Conservative government for failing to sufficiently tackle the energy and cost-of-living crisis that is currently gripping the UK. “Unlike the Conservatives, Labour is not willing to stand by and allow that social catastrophe to happen. This is why Labour has proposed to freeze energy prices,” he writes, describing a suite of policies outlined the previous day by Labour leader Sir Keir Starmer. Miliband says that the government has “opted to let families and businesses pay unsustainably high energy bills ​while oil and gas companies enjoy huge and unexpected profits”, stating that, as chancellor, Rishi Sunak had to be “dragged kicking and screaming towards introducing a windfall tax” on energy companies. “These candidates are stuck in the dogma of the past, believing the state must stand back and let market forces run wild, whatever the consequences,” he says.

Financial Times columnist Stephen Bush writes in his Inside Politics newsletter that, as with the Liberal Democrat proposals that were previously announced, Starmer’s ideas are a “whole lot better than the thin gruel on offer from either of the Conservative leadership candidates at present”. However, he says there are “a couple of big problems with Labour’s plan”, including how to pay for it, citing Carbon Brief’s analysis that put the real cost of the plan at £73bn if extended for a year, rather than the £28.9bn for six months proposed by Starmer. The Guardian’s economics editor Larry Elliott writes that the ideas make more sense politically than economically, which he adds suits Labour fine: “Given that there is no immediate prospect of an election, Starmer will not have to implement his proposals and can say Labour’s plan is a short-term response to the cost of living crisis that is looming this winter. In that sense, politics matters more than economics”. Writing in the Evening Standard, Katy Balls – deputy political editor of the Spectator and columnist for the i newspaper – says that the Conservative’s introduction of a version of the windfall tax earlier in the year has been a gift to Labour: “Now that the Tory government has taken a Labour policy in the windfall tax, it’s hard to attack the opposition as mad or dangerous when they suggest it should be extended.”

In the Daily Telegraph, columnist Philip Johnston says that Conservative leadership hopeful Liz Truss needs to come up with better ideas to deal with the cost-of-living crisis, “not least when the Labour leader Sir Keir Starmer is proposing a freeze until the spring”. Another Daily Telegraph columnist, Ben Wright, has a piece headlined, “the long-term solution to energy security is clear – we need more gas”. In fact, the piece calls for a range of measures to help the UK cope with rising energy prices, including increasing North Sea fossil fuel production, insulating homes, encouraging investment in renewables, creating the legal framework to allow fracking and building new nuclear plants.

In a rambling article in the Daily Mail about the importance of valuing the opinions of people from the suburbs, rather than London, climate sceptic columnist Richard Littlejohn takes aim at a variety of issues he deems offensive. These include rail and teaching unions, the “so-called Conservative government” and its “deranged war on drivers”, and the “obsession with enforcing ‘net-zero’”, which he says “has exacerbated the current energy crisis”. (This is incorrect, as Carbon Brief analysis shows that 96% of the increase in household energy bills has resulted from the 11-fold increase in UK wholesale gas prices since 2019.)

The Biden climate bill: Will it save us?
Jeff Goodell, Rolling Stone Read Article

Writing in Rolling Stone, reporter Jeff Goodell reflects on the passing of the landmark Inflation Reduction Act by US president Joe Biden. “This climate deal is all about ripple effects and momentum. In theory, it works like this: subsidies and rebates will give home heat pumps the little push they need to replace gas furnaces, which in turn will reduce demand for natural gas, which will close down the fracking operations that leak methane into the atmosphere,” he explains. Goodell also notes that in theory all of this will carry over to international climate negotiations, providing the US with more authority to push other parties, such as China and the EU, to do more to cut their own emissions.

Not everyone has such glowing reflections on the new bill. Writing in the New York Times, Charles Harvey, a professor of environmental engineering at the Massachusetts Institute of Technology, and Kurt House, chief executive officer of battery metal company, KoBold Metals, say that the bill’s carbon capture and storage (CCS) subsidies are a “waste of money”. They say that CCS allows “for the continued production of oil and natural gas at a time when the world should be ending its dependence on fossil fuels”. Climate Home News has a piece by Wil Burns is professor of research in environmental policy, American University School of International Service, about why the “major technical and political hurdles” to CCS technology, noting that “up to a fifth of emissions cuts from the Inflation Reduction Act are expected to come from carbon capture technologies”.

In the Washington Post, columnist Megan McArdle writes that subsidies for electric vehicles, like the ones contained in the bill, are the “wrong way to fight climate change”. Instead, she says the focus should be on improving the nation’s charging infrastructure.

Science.

Earlier onset of North Atlantic hurricane season with warming oceans
Nature Communications Read Article

Named storms in the US have shifted two days earlier per decade since 1900, a new study finds. The authors analyse historical cyclone data from 1900 to 2020 and find a “significant” trend towards tropical cyclones developing before 1 June, which is the official start of the North Atlantic hurricane season. The paper suggests that the increase in pre-season cyclones is linked to “spring thermodynamic conditions” becoming more favourable for tropical cyclone formation. The authors say that the trend is notable because “pre-season and early-season tropical cyclones disproportionately affect populated land-masses, often producing outsized precipitation impacts”.

Institutional decarbonisation scenarios evaluated against the Paris Agreement 1.5 C goal
Nature Communications Read Article

Several “major” institutional decarbonisation scenarios are not aligned with the Paris Agreement 1.5C goal, according to a new study. The researchers assess decarbonisation scenarios from “grey” literature, including those from Shell, BP, and the International Energy Agency, and evaluate their compatibility with the Paris Agreement 1.5C limit. The study finds that, of the six scenarios assessed, only the International Energy Agency Net Zero 2050 scenario aligns with the 1.5C goal.

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