News: Axios Generate: Biden's Cabinet picks — 2020's record heat

Friday, January 8, 2021

Axios Generate: Biden's Cabinet picks — 2020's record heat — Apple's car

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By Ben Geman ·Jan 08, 2021

Good morning. Today's Smart Brevity count: 1,255 words, 5 minutes.

🎶 And this weekend brings the birthday of Steely Dan's Donald Fagen, whose exquisite craftsmanship animates today's intro tune...

1 big thing: Energy implications of Biden's latest Cabinet picks

Photos of Biden's Labor, Commerce and Justice picks

Marty Walsh, Gina Raimondo, Merrick Garland (from l to r). Getty Images photos: Paul Morigi, Paul Marotta, and Chip Somodevilla

President-elect Biden's final burst of Cabinet picks could have important roles to play in the new administration's climate change and energy agenda.

Driving the news: Biden plans to nominate Rhode Island Gov. Gina Raimondo for Commerce, Boston Mayor Marty Walsh for Labor, and Judge Merrick Garland for attorney general.

Why it matters: Biden's team is planning a whole-of-government push that extends well beyond the EPA and the Interior and Energy departments, which are the agencies most closely involved with energy and climate policy.

The Commerce Department's activities include trade missions that aim to link U.S. firms with markets abroad.

Biden's transition team yesterday said Raimondo would position the U.S. as an "exporter of 21st century products and leader in the clean energy economy."
Advice for how to bolster Commerce's role is already pouring in. For instance, the group Evergreen Action last night called for Commerce to take a more muscular role in boosting domestic manufacturing of materials needed for low-carbon energy projects.

Commerce also works with the Office of the U.S. Trade Representative on trade policy.

Biden's platform says future trade agreements should be conditioned on parties meeting their pledges under the Paris climate deal.
Biden also wants "carbon adjustment fees or quotas on carbon-intensive goods from countries that are failing to meet their climate and environmental obligations." This is a longstanding idea to prevent domestic emissions restrictions from handing a competitive advantage to other countries.
Yes, but: The details are pretty hazy right now and it's now clear how much running room Biden has without buy-in from Congress. His transition team did not provide immediate comment on that topic last night.

The Justice Department plays a vital role with EPA in bringing environmental enforcement cases via its Environment and Natural Resources Division.

Biden is also vowing to create a new "Environmental and Climate Justice Division" at DOJ that would "complement" ENRD.
It would focus on environmental justice — that is, addressing the higher pollution burdens that poor people and communities of color often face.
Also, agenda would include, per Biden's campaign platform, "strategically" supporting "ongoing plaintiff-driven climate litigation against polluters."

The Labor Department overlaps with energy via job training programs, data collection and more.

Yesterday, in announcing the Walsh pick, the transition team said he "knows that we can create good-paying union jobs by investing in clean energy."
Evergreen, the group launched by former campaign aides to Sen. Elizabeth Warren and Washington Gov. Jay Inslee, yesterday floated several ideas for Labor.
Their suggestions range from initiatives to "ease former fossil fuel workers into the clean economy" to having the agencies better track data on the socio-economic effects of climate change.

2. 2020 ties 2016 as warmest on record

Bidwell Bar Bridge surrounded by fire during the Bear fire in Oroville, Calif. on September 9, 2020.

Bidwell Bar Bridge surrounded by fire during the Bear Fire in Oroville, Calif., on Sept. 9, 2020. Photo: Josh Edelson/AFP via Getty Images

Last year tied 2016 as the warmest year ever recorded, capping the end of the warmest decade on record as well, per data released Friday by the EU's Copernicus Climate Change Service.

By the numbers: "2020 was 0.6°C warmer than the standard 1981-2010 reference period and around 1.25°C above the 1850-1900 pre-industrial period," Copernicus said in a summary of their data.

The last six years are the six warmest on record, they said.

Threat level: "It is notable that 2020 matches the 2016 record despite a cooling La Niña, whereas 2016 was a record year that began with a strong warming El Niño event," Copernicus said.

Why it matters: The latest evidence of the march of global warming comes at the beginning of what could be a critical year for climate policy in the U.S. and worldwide.

Two of the key reasons why...

In the U.S., the incoming Biden administration is vowing to begin work on a suite of domestic emissions-cutting efforts and fresh engagement with other countries, too.
Meanwhile, analysts are looking for details from China, by far the world's largest carbon emitter, about how it will meet its vague pledge last year to have its emissions peak by 2030 and reach "carbon neutrality" by 2060.

The big picture: The EU data arrives as the world is nowhere near on track for the steep emissions cuts that would be consistent with the aims of the Paris climate deal.

"[T]he world is still heading for a temperature rise in excess of 3°C this century — far beyond the Paris Agreement goals of limiting global warming to well below 2°C and pursuing 1.5°C," a major UN analysis found last month.

What's next: Copernicus is among several agencies that conduct analyses of temperature records that date back to the late 1800s. Key U.S. climate data agencies, NASA and the NOAA, will release their own data next week, per the Washington Post.

"They are expected to rank the year as either the first or second-warmest on record, due to slightly different ways of measuring global temperatures," they report.

3. Sizing up the Tesla and Bitcoin bubbles

Data: YCharts; Chart: Axios Visuals

Axios' Felix Salmon reports: The value of Tesla overtook the value of all the bitcoins in the world in early June, and has stayed ahead ever since.

The bull case for Tesla is fundamentally optimistic. It involves a real company coming to dominate the global mobility industry.

If Tesla gets big enough, and interest rates stay low for long enough, then the present value of its future profits might conceivably be even higher than the current $730 billion.

The bull case for Bitcoin is fundamentally pessimistic, or at least anarcho-libertarian.

It involves the erosion of national power, the implosion of fiat currencies, the return of double-digit (or higher) inflation, and a global rush to the perceived safety of an asset class that will always be supply constrained.

Between the lines: The two speculative bets have tracked each other closely over the past year. That's because the real driver of their prices is technical market factors.

People buy things that are going up, especially when they're feeling rich. It's called the "momentum" strategy, and it generally works very well, until it doesn't.

A message from the American Petroleum Institute

COMING SOON: State of American Energy 2021

The American Petroleum Institute will release its annual State of American Energy report, "Building The Future," Jan. 13, outlining the consequential role natural gas and oil will play in America's future, for decades to come.

Visit API.org for updates.

4. Apple and Hyundai may team up on EVs

Illustration of shaking hands surrounded by lightning symbols

Illustration: Lazaro Gamio/Axios

Hyundai is in preliminary talks with Apple about the tech giant's mysterious plan to develop self-driving electric cars, per reports in CNBC and Bloomberg.

Driving the news: "We understand that Apple is in discussion with a variety of global automakers, including Hyundai Motor. As the discussion is at its early stage, nothing has been decided," a Hyundai rep tells CNBC.

Why it matters: It's another sign that Apple, which first launched its auto tech program years ago, may indeed have products on the market later this decade.

And while the world is bursting with electric vehicle and autonomous driving startups, not to mention legacy automakers' plans, Apple's financial and engineering power would make it an important player.

Quick take: It shows how new entrants into the EV and self-driving space, even with insanely deep pockets like Apple, would benefit from working with established automakers to achieve launch velocity.

The intrigue: Hyundai, in a separate statement last night, declined to name-check Apple again.

"We've been receiving requests for potential cooperation from various companies regarding development of autonomous EVs. No decisions have been made as discussions are in early stage," the automaker said.

What they're saying: Wedbush Securities analyst Dan Ives sees a 35%–40% chance of Apple unveiling its own car by 2024.

He cited the mix of "Herculean-like auto production capabilities, battery technology ramp, financial model implications, and regulatory hurdles" involved.

5. Catch up fast: oil, hydrogen, EVs

Crude markets: "Brent oil topped $55 a barrel for the first time since February as gains in broader markets added to investor optimism already buoyed by Saudi Arabia's unilateral plan to cut output." (Bloomberg)

Finance: "South Korea-based conglomerate SK Group will take a 9.9% stake worth $1.5 billion in hydrogen fuel cell maker Plug Power Inc and form a joint venture to help provide hydrogen fuel cell products to Asian markets, the companies said." (Reuters)

Diversification: Chinese search engine giant Baidu "plans to form a company to make smart electric vehicles (EV), two sources familiar with the matter said, with manufacturing to be carried out at plants owned by automaker Geely." (Reuters)