Axios Generate: The coalition pushing Biden on emissions cuts

Plus: New energy VC action and Japan's Fukushima plans | Tuesday, April 13, 2021

Open in app View in browser   Presented By Cognite   Generate By Ben Geman ·Apr 13, 2021 Good morning. Today's Smart Brevity count is 1,194 words, 4.5 minutes. Situational awareness: Japan's government plans to release more than 1 million metric tons of contaminated water from the destroyed Fukushima nuclear plant into the Pacific Ocean following a treatment process. Read more. 📱Happy 1st birthday to the Axios app! Download it for the cleanest, fastest way to get Axios on your phone. 🎶 And speaking of happy birthdays, the great Al Green is 75 today, so he's got this edition's intro tune...     1 big thing: Biden under pressure to set tough emissions target Illustration: Sarah Grillo/Axios   Axios' Andrew Freedman reports...In the run-up to the White House's virtual climate summit on April 22-23, environmental groups and now major corporations are jointly calling for at least a 50% cut in U.S. greenhouse gas emissions by 2030, when compared to 2005 levels. Why it matters: The 2030 targets are needed because the world is on course to sail above the warming targets set in place by the Paris Agreement, resulting in potentially catastrophic climate impacts. These include the loss of much of the world's coral reefs and the melting of some of the planet's largest ice sheets. Driving the news: On Tuesday, a coalition of more than 300 businesses, investment funds and utilities representing about 6 million workers in the U.S. released a letter calling for the administration to commit to reducing emissions to "at least 50% below 2005 levels by 2030" in its next Nationally Determined Contribution under the agreement. That new target is slated to be unveiled either at or just before the White House summit. Between the lines: In addition to jump-starting a clean energy economy, the business leaders of companies including SalesForce, Microsoft, Google, Walmart, Biogen, HP, Johnson & Johnson and McDonald's state that such a 2030 commitment would "inspire other industrialized nations to set bold targets of their own." It would push companies to set their own new goals as well, they said. The letter is unusual — these companies are taking a public stance on what is usually behind-the-scenes policy work. It's no accident that it comes ahead of the virtual summit, which is designed to build momentum ahead of major U.N. climate talks in Glasgow in November.  Threat level: While the Paris climate agreement calls for limiting global warming to "well below 2 degrees Celsius" (3.6 Fahrenheit), the world is currently on course to warm by more than 3 degrees (5.4 degrees) by 2100 relative to preindustrial levels. John Kerry, President Biden's special envoy for climate change, said earlier this month he's working to keep the more ambitious 1.5-degree target viable. State of play: With the upcoming summit, the Biden administration is seeking to lead by example and urge other countries to commit to more stringent emissions cuts in the near term. Environmental groups like the Natural Resources Defense Council and the Environmental Defense Fund have published reports identifying a 50% emissions cut as a feasible, but ambitious target. Read more     2. BlackRock and Temasek launch new climate funds Asset management giants BlackRock and Temasek have created a new investment entity to stake companies capable of scaling up the deployment of climate-friendly technologies. Why it matters: Decarbonization Partners is the latest sign of how finance giants — under pressure from activists but also seeing a big market — are steering more capital into clean energy tech and companies. How it works: The companies said the partnership will launch multiple late-stage VC and early-growth private equity funds. They're together providing a joint $600 million in initial capital and, along with other investors, hope to raise $1 billion for their first fund. They're targeting companies with "proven, next-generation renewable and mobility technology," as well as tech that helps decarbonize buildings and manufacturing. Via Bloomberg, the aim is to eventually manage billions of dollars across multiple funds. Catch up fast: It's the latest of several recent BlackRock moves to bolster its low-carbon energy investments and offerings. Last week BlackRock announced the $4.8 billion close of its latest renewable power fund, claiming commitments from over 100 institutional investors. Yes, but: BlackRock and the financial sector more broadly remain under pressure from activists to take stronger steps on fossil fuels. The umbrella group BlackRock's Big Problem is calling on BlackRock to take an aggressive posture in upcoming shareholder votes at major oil and power companies. However, the group praised BlackRock's new hiring of climate finance and diplomacy veteran Paul Bodnar as its new head of sustainable investing.     3. A new clean energy VC firm arrives in Texas Illustration: Sarah Grillo/Axios   A new Houston-based VC firm called Energy Transition Ventures emerged from stealth mode this morning and plans to reach $75 million for its first fund. Why it matters: It's another sign of how Texas, the nation's largest oil-producing state, is increasingly becoming a hub for clean energy innovation. ETV says it's the "first venture fund in Texas exclusively dedicated to investing in energy transition technologies." The big picture: ETV will target early-stage North American startups focused on distributed energy, electrification, mobility and resource efficiency. "Texas is the energy capital of the world, and outside of corporate venture capital, there are not many venture funds in the state," co-founder Craig Lawrence said in a release. Lawrence said he expects the portfolio to include Texas-based companies. "Texas is in the early days of building an energy-transition startup ecosystem, and we plan to be a central part of growing that sector," he tells Axios. Details: The "anchor" investment is from two subsidiaries of Korean conglomerate GS Group, including its California-based GS Futures VC arm. The new firm is headed by energy VC and startup veterans. Lawrence was with Accel Partners during the first clean tech boom and also brings solar sector experience. Neal Dikeman has worked for Shell's corporate VC arm, helped launch the Bay Area firm Jane Capital and has co-founded several startups. What we're watching: Lawrence tells Axios the firm plans to work with the energy transition efforts of major oil-and-gas companies and other Texas energy firms. "We will bring them startups that may be relevant to their businesses, and co-invest in startups with them when it makes sense," he said.     A message from Cognite Data is the sustainable secret to a more profitable energy industry     The Biden administration is proposing policies to transform the U.S. energy industry. But high-level discussions can overlook the role industrial data and technology will play to help companies succeed. As energy players map out their future, knowing what to do with their data will be vital.     4. Chart of the day: private equity's renewable investment Data: PitchBook; Chart: Axios Visuals Private equity investments in U.S. renewables hit a record $23.7 billion last year, per a new report on deals from American Investment Council, which is the industry's lobbying and advocacy arm. Where it stands: "PE invests in renewable energy in two major ways: buying and expanding established power generators and increasing their production over the long term, and financing development costs for new renewable power companies," it states. The report says several things are driving the increase, including renewables' cost competitiveness and investors in PE firms steering more capital into ESG. By the numbers: The report, using PitchBook data, also notes that private equity firms invested over $11 billion last year in other clean tech applications, like energy conservation and water purification. The big picture: AIC said the report is part of a regular series examining growing areas of investment. But it comes amid increased interest in the financial sector's role in accelerating low-carbon energy deployment — and criticism of its fossil investments. As we noted last week, activists have recently been increasing pressure on private equity heavyweights to decarbonize their portfolios.     5. Catch up fast: international edition Electricity: "Emissions from the power sector in Europe's 10 largest economies fell by 7% in the year through March 31, with the biggest losses coinciding with coal power plant closures." (Bloomberg) Aviation: "A French initiative to ban commercial air travel on some domestic routes could prove to be an example for other countries seeking to make flying cleaner." (Bloomberg) Disclosure: "New Zealand has become the first country to introduce a law that will require banks, insurers and investment managers to report the impacts of climate change on their business, minister for climate change James Shaw said on Tuesday." (Reuters) Markets: "One of China's largest car makers, Zhejiang Geely Holding Group Co., is making plans to tap into the surging market for SPACs." (Wall Street Journal)     A message from Cognite Data is the sustainable secret to a more profitable energy industry     The Biden administration is proposing policies to transform the U.S. energy industry. But high-level discussions can overlook the role industrial data and technology will play to help companies succeed. As energy players map out their future, knowing what to do with their data will be vital.     Axios thanks our partners for supporting our newsletters. Sponsorship has no influence on editorial content. Axios, 3100 Clarendon B‌lvd, Suite 1300, Arlington VA 22201   You received this email because you signed up for newsletters from Axios. Change your preferences or unsubscribe here.   Was this email forwarded to you? Sign up now to get Axios in your inbox.   Follow Axios on social media: