Climate News Weekly: Carbon market upheaval, Tropical Storm Debby, Tim Walz’s VP candidacy, and more

James Lawler: [00:00:00] Welcome to Climate News Weekly. I’m your host, James Lawler, and today I’m joined by Dina Cappiello and Julio Friedmann. We’re going to start this week’s episode with a couple of different stories on the carbon credit market. Julio, uh, where should we begin?  

Julio Friedmann: For me, the biggest story is actually the one from the Integrity Council for the Voluntary Carbon Market. 

This is a not-for-profit organization that’s come together to put some guardrails and, put some standards in place for the voluntary carbon market. And this week they basically said, hey, about a third of what’s in the market today doesn’t really qualify. It doesn’t deliver the carbon services you want. 

And specifically, this is kind of good news, bad news sort of stuff. They said renewable projects largely are not additional anymore. Putting money into carbon credits doesn’t get you more renewables so you don’t get a real environmental benefit from buying those credits, [00:01:00] which is a big change.  

Dina Capiello: That’s a huge change. I did not realize that. Can you kind of break that down for the audience? I know additionality is a little bit complicated. It’s why I’m asking if I’m right, Julio, you’re saying that historically you could buy carbon credits that would invest in a new renewable project because that actually had some benefit in terms of not contributing to the buildup of carbon dioxide in the atmosphere, but that’s no longer the case anymore. So why isn’t it?  

Julio Friedmann: Right so there’s three different services that you can get from carbon credits. And when people use the word offset, they sort of mix these services together, but I think it’s really important to keep them separate. There’s avoided emissions, there’s reduced emissions, and there’s removed emissions. 

Okay, so avoided emissions are like not chopping down a forest. or building a renewable plant that would displace a hypothetical future fossil plant. There’s reductions. An efficiency project is a reduction. Destroying methane is a reduction. Waste management is a reduction, but [00:02:00] there you’re actually taking something that emits at a certain level. 

and you’re reducing the amount of emissions from an actual physical location. Removals is actually taking CO2 out of the air and ocean. Things like planting a new forest and so what the ICVCM has just said is they said, look, we need to start differentiating these services. 15 years ago, if you were going to build a wind project in India, that project wouldn’t automatically get built. 

And so buying carbon credits gave those project developers enough money to get lift, right? That is simply not true today. An analysis has shown that almost all those projects that are being built there are being built with government subsidies or just straight up on the market. A carbon credit adding money into that project does not change any aspect of atmospheric carbon accumulation. 

Dina Capiello: So that’s a good story. The fact that these have become economical enough that they don’t need a carbon credit system to make them happen.  

Julio Friedmann: Exactly. That’s why I started by saying it’s kind of good news, kind of bad news. [00:03:00] Right? But it also means that there’s a bunch of credits out there that don’t do anything and those tend to be the cheaper credits. So, in the past, you could go on an airline like Delta or EasyJet and just pay three bucks. And say, we’ll get rid of a ton of carbon and they would not actually be getting rid of a ton of carbon, they would be avoiding an emission. And so I see this as not only a huge change in terms of these kinds of credits, but other kinds of avoided credits are also going to come under scrutiny. 

Avoiding deforestation is literally doing nothing. So can you demonstrate the carbon and climate benefit from that investment? And if you can’t, then it’s not really a carbon credit, it’s something else, right? And I should say the ICVCM does not have regulatory authority here, like there isn’t an exchange that they govern, like this is an advisory body to the world. 

What their opinion says matters a great deal and a lot of the companies that have been doing sort of big volume trading on renewable energy credits or [00:04:00] avoided deforestation credits are reimagining their business because this is going to be a big, big change. Another similar kind of story from that week was around SBTI, the Science Based Target Initiative and the key question was scope three emissions, scope three emissions being from the products that you buy or produce. In doing this, their CEO stepped down. There was backlash from the scientific committee, like the SBTI actually put out something very interesting this week on this topic. What they said is you can’t use avoided emissions, you can’t use reduced emissions to mitigate your value chain. 

But removals, we’re not telling you yet. We’re still thinking about removal, we haven’t taken those off the table. And again, it goes into this point that they are differentiating the way that you can use these services in terms of managing your own carbon intensity and footprint. 

Dina Capiello: Right.  

Julio Friedmann: So we’ll have to see what they ultimately decide. They’re talking about a November or December kind of time frame to make that removal decision.  

Dina Capiello: Yeah. 

Julio Friedmann: but i’m kind of [00:05:00] glad that they are being this clear eyed and this distinctive in the way they talk about it. 

Dina Capiello: I’ve been thinking the moral of this story is even in the carbon market, you gotta get what you pay for. So look at what you’re getting. Is it one of these categories, avoided, reduced, removed, and think carefully, make sure it’s real.  

Julio Friedmann: Right. If you’re buying a commodity in a commodity market, those are regulated. If you sell a ton of platinum, there’s a standard for what platinum looks like. If you buy a ton of timber, there’s a standard for what that timber looks like. We don’t have those standards in the carbon market, there is no exchange. There is no oversight body for these things. And so, it’s going to take a while for those standards to develop, which is part of what the ICVCM and the SBTI are trying to do.  

James Lawler: Julio, any other stories you’d like to touch on?  

Julio Friedmann: Speaking of changes in the carbon ecosystem, China has made a rather big change in the way that they have made commitments around their own abatement plans. They were on track specifically to a 2060 net [00:06:00] zero target. Historically, they have only been doing carbon intensity as the metric, but they just now have made formal reduction targets beyond just emissions intensity to total tonnage. And it’s kind of the only way that they’re going to get to where they need to go. 

Dina, you’ve just came back from China.  

Dina Capiello: I did. I spent about 12 days in Beijing where RMI has an office. So I think this is a huge move from China. Our team in China is working as energy demand increases to fulfill that with more renewable energy but as we know, coal is still expanding in China. And I just have to say, as an aside, I had never been to Asia in my life, um, China was my first and I, one of the things I was most struck by as a person who’s lived in many, many major cities in the United States was the lack of sound [00:07:00] on the streets. The penetration of electric vehicles is so noticeable that it actually affects the senses, and I was just blown away by how quiet the entire city was because there’s electric vehicles and charging stations everywhere. 

Julio Friedmann: Indeed, and but China, first of all, the scale just is astonishing, like, in every way. I’ve been to China 40 times, every time I’m like, oh, it’s just different here.  

Dina Capiello: Did you notice the silence too? Have you noticed a change in the time that you’ve been going to China?  

Julio Friedmann: So I haven’t been there in the last five or six years, so I have not seen that. 

Uh, the last time that I was there, they were having real troubles building out their charging infrastructure. That was actually a choke point. Now they’ve got that part kind of set. It was also the case that EV industry five years ago was much smaller than it is now. But even then, they were putting strong incentives in place for purchasing electric vehicles and they were putting high penalties on buying imports and ICE engines and stuff like that. 

So they were beginning [00:08:00] to make that transition. It is the case though that China still makes more than half of the world’s steel. They use more than half of the world’s coal. They are building natural gas pipelines from Russia, Kazakhstan, Turkmenistan. They are growing the fossil enterprise in the same way that they are growing the renewable enterprise. 

The thing that is kind of great about these new targets is that it actually is setting a hard cap and plans for reduction. That’s going to roll out in the 2026 five-year plan. And, you know, love or hate China, when they make a plan, they stick to it. And so these kinds of steps where they make a commitment signal a real change. 

There is no way to square the climate circle without China taking much more ambitious steps and I look at this as one of the first steps that they need to take.  

Dina Capiello: 100 percent and even as like a casual observer, well I guess not so casual because I do work for a non [00:09:00] profit devoted to the energy transition, you get that sense of that commitment. And in terms of the charging infrastructure, Julio, I have some crazy pictures I took. It’s everywhere, sometimes it’s just not fancy, like a public housing building and it’s this like smorgasbord of chargers affixed to it, charging all sorts of electric vehicles, so it just, just dawned on me that like, does this have to be as hard as we think it is? 

Julio Friedmann: The short answer is they are able to do this by literally uprooting hundreds of thousands of people and moving them forcefully. So we’re not going to quite do that either.  

Dina Capiello: We’re not going to do that.  

Julio Friedmann: Right. Uh, I remember a project in China that was built in astonishing time. It was built in three months, but the way that they did that is they called the project manager and said, you’re not going to see your family for three months, call a thousand of your friends, they’re not going to sleep for the next three months. You got to build it in that amount of time. But in the back of my mind, I’m also thinking, [00:10:00] how, what would OSHA think about that?  

Dina Capiello: Fair, fair.  

Julio Friedmann: No, so we do need to sort of balance these kinds of issues as we go forward. I do think that China holds lessons about how we could do it faster with greater ambition and how, through our system, we can reimagine the ways in which we maintain equity, in which we maintain justice, but also get to yes, and also move a bit more quickly. 

Dina Capiello: No, totally, and I really appreciate your perspective, because again, it was my first time, so I was kind of like a kid in a candy store, right? So it was just like, sensory overload, right? Well, let’s turn to our next story, because I think that you probably have something to say about this, Julio, which is this Bloomberg story, um, about an election, a Brazilian oceanographer actually, was named Secretary General of the International Seabed Authority, which is tasked with completing regulations around mining the seabed for minerals used in EV batteries. There was also a related clip [00:11:00] in The Economist talking about China and how it’s itching to mine the ocean floor. For some of the minerals that are essential for batteries.  

Julio Friedmann: Yeah. So I’m generally pleased when we see scientists elevated to positions of authority, Letitia Carvalho is no exception. In the Bloomberg story, she talks about how she wants to use the science as a neutral arbiter to these things. That’s kind of a good position to start from. Often these questions, especially in the ocean, are just fraught. People have a deep emotional attachment to the ocean. There are many things we don’t know about the seafloor. It is also the case that there probably is a useful and safe and ecological way to do these things. To be clear, we haven’t exactly found that yet. 

As people are running to get more and more of these rare earth elements, it is tempting to just say, well, we’ll just go out there and grab all of it. And Russia and China have been making [00:12:00] claims on the seabed for many, many years, so has Chile. It is my hope that Letitia Cabrillo brings a little bit of calm to what is otherwise fraught, ugly debates. 

Dina Capiello: Obviously, we’re going to need more of these minerals, but Amory Lovins, our co-founder, is of the mind that we are gonna come up with technologies that that decrease the demand for some of these minerals and the need may not be as great as we think it is currently, right? It’s going to change over time. Do we have to open up, for instance, the deep seabed for mining for these minerals? 

Is it worth, as you said and pointed out so well, the risks? You know, we don’t know a lot about the oceans yet. A lot of it is uncharted territory.  

Julio Friedmann: Yes. This is one of these things where I think Amory is probably more right than not. We are starting to get serious now about recycling these materials, whether they’re from [00:13:00] batteries or just trash heaps and going in and finding more copper or more rare earth elements, more platinum and silver, whatever it is we need. 

There are now companies that are really legitimately committed to doing this and processing facilities that are being built. At the same time, we’re seeing a bottoming out of the lithium market. People sort of made this rush to lithium and were like, we’re going to have batteries forever and like, that hasn’t panned out. 

The prices are depressed, it looks like they’re going to be depressed for a while. So people have opened lithium mines that are not exactly going to be money makers and the environmental consequences of those could be lasting. I still think we’re going to end up needing a bunch of this stuff. And it’s possible to do this in a way that is just and equitable for human systems in a place like the seabed, more so than it is in the Congo. 

We are going to have to sort of think carefully about these kinds of tradeoffs. And, uh, I would strongly push back against a rush to the seafloor but I also think that we will at some point be doing that. I hope that [00:14:00] Secretary Carvalho now will take the opportunity to say can we learn something before, during, and after so that we don’t cause unanticipated problems and minimize impact.  

Dina Capiello: Yeah, I totally agree. It’s like this balance and one thing that I love that you just pointed out is where can we go for these minerals that, that do the least harm and don’t kind of come up against populations that may have historically face more of a burden right, from some of our environmental choices.  

Julio Friedmann: Yeah. Speaking of mining, we’ve got a story here from Glencore, a commodities trading company, one of the biggest and best of all time. They were trying very much to ditch and spin off their coal business and they’ve rolled back those plans, uh, in part because their shareholders said, no, no, no coal trading is still very lucrative, we like the money that this brings in. I’m sure you have thoughts.  

Dina Capiello: I have thoughts and you know, listen, I, I’m going to quote directly from the articles. I [00:15:00] think that I was taught as a journalist, if they say it better than you can write it, quote it. But there is a quote in this article from Gary Nagel, the chief executive of Glencore, and he says. 

The ESG pendulum has swung back over the last nine to 10, 12 months. The shareholders recognize that cash is king. And I think that’s what’s happening here is it’s profit over planet and comes on the heels of other major decisions from energy majors such as Shell and BP, which recently stepped back from their efforts to kind of, uh, meet demands of environmental, social and, and government’s investors and instead, you know, double down and focus on the core oil and gas operations to boost returns. 

Julio Friedmann: The challenge that we face here is that in fact, coal use continues to grow. It’s not crazy for a company like Glencore to say, if people are going to keep using and trading coal, we should be coal [00:16:00] traders. The demand side is still up. And this is again, something which we were just talking about with China, the demand side still grows. It’s growing in India, it’s growing in Southeast Asia and so we need to be more deliberate from a policy perspective, from an international partnerships and governments perspective. If we want to decrease the demand signal for coal, we need to be really forward about swapping that out. Decoalification is hard work, so until we decoalify, we’re going to see this story again in three years time.  

Dina Capiello: Yeah. You know, we’ve talked about that internally at RMI and our bread and butter, as you know, historically has been an energy efficiency and demand side, and we’re definitely going to be doubling down this year back onto demand side because, you know, it seems that all of the attention has been on the growth on the supply side. 

Yes, it’s amazing to have a tripling of clean energy, but it seems to be so much less focus on the demand side, which I think is critical when you see headlines like [00:17:00] this one. But I think that this is a huge challenge. I know it’s one that many folks at RMI deal with every day is how do we address this when short term profits are dictating some, some of these actions over the long term benefits to the environment and to planet earth as we come out of, I’m sure you guys talked about this when I was gone, but the hottest couple of days on, on record. 

Julio Friedmann: Indeed, we did talk about that. Continued demonstration of terrible climate impacts, heat related deaths, high among them. The way that Florida is banning protections for workers from heat. You know, these kinds of things. We are in the age of consequences, and so heat is what we’re seeing this summer.  

Dina Capiello: You know, we’ve talked a lot on this show because it’s unavoidable these days about the myriad climate impacts we’re seeing. I experienced it firsthand. I had to go pick up my kids from sleepaway camp on the North Carolina coast two days early because of Hurricane Debbie, which became a tropical storm in Carolina so it’s everywhere. And I’m going [00:18:00] to Alaska in a couple of weeks where the town of Juneau right now is being flooded by a glacial lake coming from a melting glacier. So it’s everywhere.  

Julio Friedmann: Yes, it’s interestingly named the Suicide Glacier.  

Dina Capiello: Very interesting. But what I think is so interesting about this spate of clips is that Florida is banning any kind of heat standard to protect workers who have to work outside or without air conditioning. I know that the federal government under President Biden is considering it and some other states like Maryland, where I’m sitting right now, are supporting a heat standard. There’s a lot of questions about how that would work and how that would be enforced. But also there’s the larger issue, is that really solving the problem? And I would say no, it’s not. Yes, it’s protecting people, it’s a protective stance, but the root of the problem is the climatic change that’s creating these heat events. 

Um, and so it’s kind of skirting the real issue at the heart of it and speaking for me, not for [00:19:00] RMI, it just really ticks me off when states like Florida, who don’t do much on climate, if anything, then don’t also protect people from the consequences of it either. So, so that to me, I think is, is, is, it’s frustrating, to say the least. 

Julio Friedmann: From your lips to God’s ears, what am I going to say, right? 

James Lawler: Well, moving to another story this week, um, Julio, Dina, share your thoughts, if you could, on this story from the Associated Press. Energy Department awards 2. 2 billion to strengthen the electrical grid and add clean power. 

Julio Friedmann: I was delighted to see this story about the energy department awards. I got strong thoughts about this, but Dina, what’s your take?  

Dina Capiello: Listen, I mean, this is again, it’s one of those not sexy things that I know that you probably-  

Julio Friedmann: like you and me.  

Dina Capiello: Yeah, that exactly that is so necessary to get this, what we need done, done, right? Which is to get more clean energy onto [00:20:00] the grid. 

And I have to also note this New York Times graphic, which is separate, but was also super interesting about where electricity comes from in every state, which shows the shift that has happened over 2001 to 2023, um, and how it’s different depending where you are. And of course, I was biased, looked at my home state of New Jersey, which in 2001, the top use of, of electricity was from nuclear, and now we are at natural gas. 

And I think the one reflection I had on the maps, 2001, all we saw nationally, these are the colors, was coal, nuclear, and natural gas. And now we see more colors, oh, and hydroelectric. That was all in 2001, four sources, basically. And now You’re seeing the entry of a fifth, which is wind. Solar hasn’t gotten to a majority of power development, power production in any of the states, [00:21:00] but at least you’re seeing a transition and you’re also seeing a transition away from coal to natural gas and even in some cases nuclear to natural gas. So super interesting stuff, love the New York Times graphics. Shout out to the New York Times for always doing super cool graphics based on public data. So over to you Julio and what you thought about both the big time energy investment from the DOE and also the New York Times map. 

Julio Friedmann: Sure. So with respect to the DOE grants, you know, this is part of the 10 and a half billion dollars that was in the bipartisan infrastructure law and the eight projects that they selected are pretty interesting. They vary across the nation in terms of scope and scale. There’s one that I find particularly interesting, which is in my home state of California here, which is a reconductoring project. 

It is to take a hundred miles of transmission line that exists today and replace them with better conductors. And reconductoring allows you to double or triple the amount of electricity you put through existing rights of way, existing pylons. You just take one wire out, put a new wire in. [00:22:00] Reconductoring could be huge for the United States, but we won’t know until we try it. 

So let’s put some money into it. Try it once, get some data, get some measurement. And if it looks good, we can actually double or triple grid capacity without building out a bunch of new transmission lines, which then means you can avoid some of the permitting challenges. So I’m delighted to see these kinds of things coming forward. 

It proves that we need innovation in many areas, not just in technology. We need innovation, innovative governance. We need innovative policy. We need innovative business models. And this money from the bipartisan infrastructure law is chasing all of those innovation pathways.  

Dina Capiello: No, it’s great, and I love how all-encompassing it is, right? 

It’s, it’s spread out so, so intelligently and obviously by design to deal with the whole entire system, which is what we have to do to obviously address this issue. One of the other clips, I know that you want to speak to this as it’s your bailiwick, is this clip [00:23:00] about Carbon America’s Frost CC technology, which is demonstrating ultra clean carbon capture. 

Novel cryogenic carbon capture technology. It just sounds cool, right? Frost CC has successfully completed 1,000 hours of testing at the National Carbon Capture Center. It’s a lot of C’s, Julio, but I know that you can explain this to our audience about what’s so cool about this, um, and why is it significant? 

Julio Friedmann: Yes, a lot of C’s indeed, which, you know, tickles my fancy. Uh, I would not say though that this is a C change. The thing that’s distinctive about this technology compared to other technologies is what you call a phase change technology. So basically, they’re taking CO2 that’s in some concentrated stream of some kind, and they’re basically freezing it out. 

So it’s just all electricity run, there’s no chemical solvents, so it’s a completely different way of doing carbon capture than has been done in the past. Let me say that a thousand hours test [00:24:00] is a sort of minimum ante. Before anyone takes you seriously, you need a thousand hours of performance. 8, 000 hours is what a year of operation looks like, so a thousand hour test is sort of the first serious demonstration of capability. So the fact that they’ve completed this milestone is noteworthy, congrats to Carbon America for doing this, we’ll see whether or not this technology is competitive.  

Until the grid is green actually, the question is like, where are you going to get the green electrons from? How are you going to make this cost competitive? Carbon America has been in this arena for a long time. So, uh, they’re not newcomers to this space, we’ll just have to see how this plays out.  

And then we would be delinquent if we didn’t talk about Tim Walz, VP pick and what that might mean for climate. Vice President Kamala Harris has chosen for her vice president, Tim Walz from Minnesota and he’s really sort of broken through as this [00:25:00] remarkable sort of media figure, but of course he’s accomplished a great deal and many of his accomplishments are in the area of energy and climate. He’s streamlined permitting, signing legislation that makes clean energy projects easier to do. They’ve made a commitment to zero carbon electricity by 2040, it’s a very ambitious target for a state like Minnesota. He’s certainly walking the walk, uh, for a lot of this, uh, energy transition. Our current Vice President Harris has really focused on a lot of sort of justice issues, border issues, international issues, she has not made climate her marquee thing. It’s interesting that she chose a governor who’s really done a great deal in terms of climate and energy, worker protections, and all these other sorts of things. As her vice president pick. Love to get your thoughts.  

Dina Capiello: No, I think this is really interesting. And I was listening to a lot of NPR on this trip to rescue my kids from Tropical Storm Debbie. 

And one of [00:26:00] the NPR anchors talked about how Walz is really similar to Biden in the sense of what he’s done on climate in his home state. And, and most critically, how he’s talked about it in the past is really astute at the messaging and really sees this as a jobs/economic incentive story rather than the climate environmental story, and I think that that comes from his background as a person who grew up on a farm in Nebraska, who is very, very attuned to environmental changes. 

If you come from a rural area where your dependent on the land for your sustenance, one of the things that struck me about him from the early days and, and watching the coverage and watching the rallies is his very pragmatic point of view, right? Even if you look at him being a hunter who owns a gun, and it’s kind of refreshing to have this kind of middle where it’s been so polarized that you can’t even see the light between the two sides and he seems to find the light or as he would say, [00:27:00] the joy. 

Julio Friedmann: We forget actually that sometimes the work we do is joyous. It’s not just difficult or fraught or frustrating, it’s joyous too, and lovely to get that message from Governor Walz. Ultimately, I think this also reflects in some small way, perhaps in some substantial way, Kamala Harris’s own thinking about climate. I do believe that she will prove to be a leader in climate. in every real way but the fact that Tim Walz is her pick is noteworthy. We’ll see whether or not they are elected and have the chance to govern, and I’m sure we’ll report about it on a future episode.  

Dina Capiello: I am sure we will. 

James Lawler: And that’s it for this week’s episode of Climate News Weekly. Thanks for listening and hope you can join us next time.