Climate News Weekly: Kamala Harris and climate, a turning point for China, the Cape Wind accident, and more…

James Lawler: [00:00:00] Welcome to Climate News Weekly. I am here with the one and only Julio Friedman. Good to see you, Julio.

Julio Friedmann: Glad to be here, sir. It’s been a heck of a week.

James Lawler: It’s been a heck of a week. There’s a lot of news in a lot of different quarters. We’ll begin with the biggest political news of the last week, which is Kamala Harris. We want to unpack her climate position. What might be different about a Harris administration to a Biden administration when it comes to climate and energy? Julio, how would you unpack Vice President Harris’s agenda and bona fides when it comes to climate and energy?

Julio Friedmann: Sure. Let’s start by saying we don’t know that much, actually. We know a lot about what she campaigned on four years ago, but that was a different time and a different world, a different context. We do know that she has contributed substantially to this administration’s climate outcomes and goals, uh, including the tie breaking vote for the [00:01:00] IRA. She has a longstanding interest in climate, so I believe she will lean into the work for real.

A couple of things, I expect. One is that she has always been strongest in talking about climate change and energy transition when working on issues of equity and justice. This is really true to her school as Attorney General in California and others, so I expect that she will continue to champion questions and concerns of climate justice and environmental justice when thinking about the energy transition.

I do think she will also be a strong advocate in that exact same context for development in the global south, using energy transition as an opportunity to create wealth, uh, in developing countries. And I do believe that she will, even more so than President Biden, take issues of, say, human health impacts, biodiversity and stuff into the consideration of the energy transition.

The flip side of that, the president’s job looks different. She will probably still work very [00:02:00] hard to keep oil prices low. There’s, there’s a bunch of things that are different in governance than in campaigning. If she’s president, she will probably permit LNG terminals. We will have to see, but it’s an exciting time. I’m glad to have somebody of her stature and her excellence in these issues leading the ticket.

James Lawler: I think that’s a good point. There have been a lot of pundits that have tried to draw a line between Kamala Harris’s experience as California Attorney General and the kinds of things she did there and what we might expect if she were to assume the presidency. To Julio’s point, that’s a very, very different job with very, very different considerations than an Attorney General. There is a lot of work still to be done to cement the legislative achievements of the Biden administration. There’s a lot of work still to be done to realize the potential value and the gains of the IRA so we might expect her to work to really cement those gains.

Julio Friedmann: I think that, you know, [00:03:00] she may, in that exact same context, be more active on things like regulation, on things like the methane rule. I think she might be more proactive about the EPA as a granting organization. I think she might think more about the global state’s craft.

James Lawler: And Julio, actually, this sort of brings up a question in my mind, which is we were sort of gifted this amazing piece of legislation, the IRA, which has led to so much innovation and, and investment and all kinds of interesting things. Is there any roadmap for what follows? Obviously, there’s permitting reform, but do we have a manual? Like what comes next to kind of follow the stimuli that the IRA provided that might constitute a roadmap for a Harris administration? I mean, is a policy roadmap out there?

Julio Friedmann: No, the policy roadmap is not out there. And part of the reason why is that it’s less about policy right now. Implementation is prose, not poetry. Implementation is about [00:04:00] getting permits filed, getting communities to agree. It is about tradeoffs in construction and operation. That’s the hard work actually. And frankly, you don’t want to be too prescriptive about that from a policy thing because you have many, many different contexts and concerns.

I do think that in order to get that done, you do need communities to get to yes, thinking about the Harris administration as somebody who would take community issues very seriously. Maybe that’s a way to get through logjams, maybe that will increase delays. I don’t know whether it’s a plus or a minus, but I do believe there will be a lot of focus there.

James Lawler: Well, we will be tracking that and I’m sure there’ll be more, more stories to report on in the months ahead on the campaign and what that will mean for climate and energy transitions.

So moving to the other side of the world, story about China this week. The title was Why the Era of China’s Soaring Carbon Emissions Might Be Ending. And so this article was in the New York Times and reported on [00:05:00] various analysts seeing quote, promising signs from the world’s biggest emitter of greenhouse gases.

So essentially, as I understand it, Julio, the picture is that a number of factors in China have led to what might be a plateau this year in the growth of emissions. So this is not 100%, but it looks like it might be happening. It doesn’t necessarily mean, though, that emissions are about to decline. However, last year, China installed more solar panels than the United States has in its history.

It is also true, though, that the sector responsible for a third of China’s emissions, which is the housing sector, has cooled substantially. So all the supply chain emissions associated with building stuff have declined dramatically, and that’s very likely not a permanent thing. So I’m curious how you metabolize this news, and what you make of this potential plateau in China’s emissions.

Julio Friedmann: Let me start by saying [00:06:00] I look forward to having this discussion with our colleague and friend Dina Capiello, uh, who’s been in China recently. A couple of things. First of all, I like all the caveats in the title and in the story. There’s a lot of things that still have to break for China to decrease or plateau right now, some of that’s weather dependent, some of that’s LNG import dependent, some of that is supply chain dependent. Like you said, the housing market has cooled off, which has been leading to decreased emissions, that could reverse. We don’t quite know. Still it is inevitable that Chinese emissions will plateau.

James Lawler: Why is that?

Julio Friedmann: It’s going to happen this year, or it’s going to happen next year, or it’s going to happen the following year and there’s a couple of reasons why. One of them is just they’re slowing economic growth. Second is the greening of their grid. They are building enormous amounts of renewables and their coal capacity factor in the power sector is diminishing somewhat.

It’s modest, but it is diminishing. [00:07:00] The swing in that emission is hydropower. For a couple of years, they’ve had low hydropower. This year, they look like they have good hydropower. So it might mean that it may decrease or plateau in 2024. That would be awesome. And this is inevitable, Xi Jinping has committed to do this by 2030.

China often does this. Their stretch goals are very unimpressive, and then they deliver ahead of schedule. And they use that as a negotiating tactic in things like the conference of the parties at the UN. So I do think that this is inevitable. I would also reiterate what you said, a plateau is not a decrease. Other power plants still exist. If they continue to have strong economic growth, or if they have stronger economic growth than they have recently, all those plants will ramp up and there will be more emissions. It is also the case that it takes a long time for the existing assets to work their way out of the system.

So even if they have great EVs and even if they have great electrification of [00:08:00] things, the existing stocks will still exist and will still operate for a long time, whether that is trucks or planes or power plants or steel mills. Even though we should celebrate a win if China actually plateaus this year, that is not the same thing as deep, rapid reductions. That requires a completely different mindset of either early retirements of assets, carbon management, fuel switching to things like green hydrogen, it requires a really different sensibility to get deep, profound, rapid abatement.

James Lawler: Yeah, there were two little details here, which I just thought were, were interesting. So in May, China generated 53 percent of its electricity from coal, which is the lowest share since the Chinese government began publishing energy data several decades ago.

Julio Friedmann: And I would add, saying that the lowest fraction of coal in China’s grid does not mean less coal. The total abundance, the total volume, is still at record highs.

James Lawler: Yeah.

Julio Friedmann: Total emissions are about the full volume, not about the fraction. [00:09:00]

James Lawler: And the other point is that as goes China, so goes the world, right? It’s likely that the moment that China’s emissions have peaked, it’s very likely that that will be the moment that we can say the world has begun to reduce its emissions.

We are not there yet. They continue to increase year over year. Hopeful signs here, not cause for kind of standing up and declaring victory yet.

Julio Friedmann: Oh no, not at all.

James Lawler: So, moving back across the pond, this is more of a local story, but illustrative of sort of the bumps along the way. GE Vernova, Inc., which is the company that has been building the turbines that are supplying the Vineyard Wind Project, which is south of Martha’s Vineyard in Massachusetts, faced difficult questions from investors on Wednesday after a major accident shut down construction there, caused that company’s share price to decline 5%. This temporarily closed the beaches on Nantucket Island. Why do they need to close all [00:10:00] the beaches on Nantucket? Can you explain that?

Julio Friedmann: Yeah, huge pieces of plastic shrapnel were washing up on the beach.

James Lawler: Did the blade just shatter? Is that what happened or?

Julio Friedmann: Yeah, it disintegrated and large parts of it were floating up on the beaches and that’s a hazard. It’s like you don’t want swimmers to get hit by or tangled up in blade parts.

James Lawler: No, I get, no, I understand that. I did, what I didn’t understand was whether the blade just sort of fell off all in one piece. I understand now that that would not be good to encounter one of those pieces while swimming. So what’s going on here? I mean, is this sort of an accident that one might anticipate for a large-scale infrastructure project, or is this more than that, do you think, Julio? Like, does this have any greater significance than, oops, a part broke, and we’ll fix it, and we’ll, you know, how should we metabolize this?

Julio Friedmann: I think this is emblematic of what scaling up technologies looks like. Economists think about these things as sort of smooth and frictionless and, and they just grow in scale. [00:11:00] In point of fact, it is not like that. There are many challenges to companies like GE Vernova. In this case, GE was pretty transparent in recent memos. They basically said. Oops, this was a failure on our part. It was both a manufacturing failure around the glue that they used to make these really big turbines, and then a quality control failure after that.

James Lawler: Just to sort of remind everybody, and I’m quoting an article here in Bloomberg, which came out last week, Vineyard Wind is one of the industry’s marquee projects, and it became the largest operating offshore wind farm in the United States this June, 2024, when its 10th turbine started sending power to the grid. So this is a working operating offshore wind farm. At completion, it would have 62 turbines that’ll have about 800 megawatts of capacity, which is enough to power about 400, 000 homes across the East Coast. So it’s quite massive, you know, and it’s [00:12:00] going to be six times as big, assuming it all continues.

Julio Friedmann: On the long road, it does look like a bump. But in the near term, this could crater the existing projects. This could make them more expensive. It could detour investment away from offshore wind. So these little bumps end up maybe having substantial impacts in terms of timelines of Deployment. It also means that another competitor to GE might suddenly roar ahead in their own manufacturing a company like Orsted or something like that.

So I’m not cavalier about these things. The arc of history is long and bend towards deployment. Scale up is always problematic.

James Lawler: All right. So let’s talk about the next story. So this is a sort of a hopeful story. We have the bipartisan energy permitting bill, which would increase FERC’s transmission siting authority, essentially giving that federal agency more authority when it comes [00:13:00] to permitting these large scale transmission projects.

Julio Friedmann: FERC being the Federal Energy Regulatory Commission.

James Lawler: The bill was proposed by Democrat from West Virginia, Senator Joe Manchin, and Republican Senator John Barrasso from Wyoming together. And some of the key components of this bill, which make it interesting, are that number one, it would set a goal of permitting 50 gigawatts of renewable energy projects on federal land by gigawatts of offshore wind as a point of comparison.

That’s about 4 times the size of the Vineyard Wind project that we just talked about. It would require annual federal geothermal lease sales. So this is leasing land for the production of geothermal energy. And it would require neighboring transmission planning regions to draft joint interregional transmission plans and to establish rate treatments for interregional transmission planning and cost allocation. Julio, what do you make of this? How significant would this [00:14:00] bill be if it were to become law?

Julio Friedmann: Let’s start by answering the question of whether or not it will become law. Uh, given this election cycle, it seems unlikely that it would pass this Congress, maybe in a lame duck. But this kind of legislation, of course, can be evergreen, uh, it can be picked up in the next Congress.

So, it’s worth taking a look at the specifics of this legislation, because there’s a lot to like in terms of clarifying the FERC order, and what authorities do they have and not have. Trying to get the projects built for transmission and interconnection is hugely important. We’ve talked about this many times in this show.

Permitting reform is important and the fact that this is a salvo into that space, I think it should be celebrated and welcomed. One of the key aspects of it is a limit on when you can file a suit. It doesn’t limit people’s ability to sue, but it does limit the timeline. You got a small amount of time to file your grievance that will prompt more organization and prompt people to focus on what they consider to be really the most [00:15:00] egregious concerns.

So I am excited today because people claimed that this was not possible at all, and lo and behold, we have a bipartisan bill in the Senate.

James Lawler: Yeah, no, it’s, its really hopeful news, and this bill is backed by not only the American Clean Power Association, Solar Energy Industries Association, American Council on Renewable Energy, Advanced Energy United, Americans for a Clean Energy Grid, and others.

One other aspect that might be noteworthy is that costs of any transmission project would be borne by those that benefit. And this has been a sticking point in discussions of other pieces of legislation, and so this bill clarifies who can bear the costs of such improvements.

Julio Friedmann: The hardest question in the energy transition is who pays. There are people who will disagree, there’s other policy measures you can take to manage those costs, but clarifying who pays and why is again a big step forward. Also the long-term planning is a big step forward It says literally you need to make a 20 year plan, that will empower a lot of transmission build [00:16:00] out. A lot to like in this bill.

James Lawler: Yeah, and so the question of who benefits is connected to our next story in Bloomberg from this past week. The World’s Power Grids Are Failing as the Planet Warms and upgrades to infrastructure just haven’t kept pace with the increasing severity of the effects of climate change from weather to heat. You know, increasingly, it’s becoming clear that grids around the world are not up to the challenges that climate change presents. And so, weaknesses in transmission that weren’t thought to be there are showing up around the world, from Texas to Albania. Julio, any thoughts on, on this particular story?

Julio Friedmann: Well, especially in the U.S., a lot of our grid infrastructure was really built and designed in the 30s and 40s. It’s been around for a long time, and in a much cooler world. The combination of wildfires, extreme heat, extreme winds, all of these things are not what the grid was built for. That is also true in [00:17:00] other parts of the world, to a different extent.

Kind of ironically, because China’s grid is so new, they actually have a very resilient grid. People have talked for a long time about putting all of these power lines and stuff underground. That is extremely expensive, actually. It’s a factor of five or ten more money than just stringing up new lines. If we’re going to electrify everything, if we’re going to have a lot more electric vehicles and heat pumps, then we better have a modern grid, because the modern grid would be built for the modern world, and the existing one is not.

And these issues of how the heat and fires and wind are affecting the grid are profound. They are big issues. They are causing failures. They are causing blackouts. They are causing damage and we just can’t sally on as if we were just going to do business as usual. That is clearly going to fail as a strategy.

James Lawler: I mean, it’s almost impossible to overstate how acute and how devastating this can become in such a short amount of time. I mean, if you live in or around Houston, [00:18:00] you relate to this, right?

Julio Friedmann: There was this idea over the past 10 years that we wouldn’t need a big grid. That we would just have a lot of rooftop solar and that would take care of it. That is not proving true. We are building utility solar. We’re building rooftop solar too, but that’s not solving these issues. We are building offshore wind and a lot of onshore wind. We are looking at large nuclear power plants to run large data centers. We’re still wed to the grid and it’s going to expand. So these issues are going to multiply in the near future.

James Lawler: In another story, the EPA, Environmental Protection Agency, has awarded 4.3 billion dollars to fund projects in 30 states. So this money is going to go out to 25 projects that target greenhouse gas emissions from all sectors. So transportation, electric power production, commercial and residential buildings, industry, agriculture, waste materials management.

These are grants that are paid for by the 2022 [00:19:00] Inflation Reduction Act, which included 400 billion in spending tax credits to expand clean energy production. Julio, any thoughts on this story?

Julio Friedmann: So the EPA as a granting agency is kind of new. And so this is one of their first big pushes, so we’ll see how that goes. It’s noteworthy that it’s a big change. I think it’s a positive change, but we’ll see how it goes. Having worked in government giving grants, like how you do the selection, how they’re administered, this ends up being important.

Second thing, generally speaking, these are not just targeted to climate pollution. They are often associated also with other kinds of pollution control. The transportation projects are good examples of that, where part of the job here is not just building electric infrastructure. It is also reducing NOx and asthma causing chemicals. It is reducing particulates and sulfur, cleaning ports.

Oftentimes you’re getting this double benefit. A lot of the EPA programs are really sort of [00:20:00] aimed at that. Some of them are aimed at countering what we were just talking about. They’re actually about strengthening the distribution grid to make it more resilient so that disadvantaged communities have better electricity service as well as cleaner electricity service.

So in many cases, these programs at the EPA are aimed at disadvantaged communities and multiple benefits, which is good. To bring it full circle, if we actually have a Harris administration, I would predict there would be more of these kinds of things.

James Lawler: Yeah. Some of these grants are quite substantial and quite exciting. I mean, 500 million to the port of Los Angeles to reduce vehicle emissions through electrification, charging incentives, low emissions vehicles at the port, which is very important. You also have a grant to Lincoln, Nebraska, 300 million to reduce emissions from buildings, could lead to an 80 percent reduction by 2050 of all that city’s building emissions.

In the Midwest, this money is going to [00:21:00] agricultural emissions. In the Northeast, 450 million to accelerate the adoption of heat pumps, you know, air source heat pumps to reduce, uh, the energy needs of, uh, associated with heating and cooling in the Northeast. So very interesting stuff. There ends up being a lot of inertia, you know, and positive momentum kind of associated when you have kind of a slug of money like this.

Everyone becomes focused on, all right, well, what do I have to do to get those dollars? And that will survive the shorter-term changing winds and it sort of reorients people toward these new societal objectives.

Julio Friedmann: It creates both positive and negative momentum. So on a national scale, yeah, you get more cities wanting to do this. You get more asset bases like the Port of Los Angeles wanting to do more. Other places start asking themselves, how do I get some of that money? And so it does create demand for continuation of these policies. It also creates pushback in that all of these mega projects become places where people focus their contention.

And so you start getting lawsuits, you [00:22:00] start getting delays for people who want a piece of that pie and they try to force their way in to carve off a little piece. And so these things become more complicated when they’re larger too. It’s just the nature of these things. It’s neither good nor bad. I do think though that we’re going to see a demand for more of these kinds of things. And I think that we are going to see, again, these kinds of dual benefit things where you get an economic benefit, a climate benefit, and a health benefit, and a community benefit all in the same place.

I want to make sure that we mention in today’s podcast that for two days in a row this week, we have simply had the hottest temperatures in recorded history globally. We’re going to see more of that too. And we are also seeing, again, a resurgence of terrible wildfires in California and Canada that are emblematic of these kinds of circumstances. The high temperatures, changing rainfall patterns, all these sorts of things. So we have a lot to celebrate this week, there’s a lot of progress that we’re seeing, but it will continue to [00:23:00] be a team sport for everyone out there to figure out how best to contribute to the energy transition.

James Lawler: Yeah. Well, on that note, thanks so much, Julio, and that’s it for this week. Please join us next time. Thanks so much.