Net Zero

Tempered expectations

Ford is cutting about 1,400 workers from its U.S. assembly lines for the F-150 Lightning, following a plan it announced in December to cut production expectations for that vehicle in half. Automakers are expecting a slow year for EV sales growth as tax credits dry up and interest rates remain high, and are scaling back production accordingly. Their EV price-cutting war is now reaching Europe, where Tesla this week cut €5,000 off the price of some models in Germany. In Europe, Tesla is focused on competition from China’s BYD. But it’s under pressure in the U.S. too: Hyundai and Kia are catching up to its EV sales, with a strategy that hinges on popular SUV/sedan crossover models.

Life after ‘Chevron’

The U.S. Supreme Court seems likely to restrict or toss out a 40-year legal precedent that shields many key environmental and climate policies from being rolled back. If it does, it will hand Donald Trump a major, delayed victory from his first term — and make it easier for a potential second Trump administration to dismantle President Joe Biden’s climate agenda.

Justices heard arguments this week in a pair of lawsuits against the government challenging “Chevron deference,” which requires judges to defer to the expertise of federal agencies in cases where there is an ambiguity in the law during a dispute.

But in Wednesday’s hearing, the court’s conservative majority contested that concept, arguing that it hands too much power to bureaucrats and inevitably leads to damaging policy reversals every time the White House changes parties. A decision on the doctrine’s fate is expected by July.

If the court overturns Chevron — which takes its name from a 1984 dispute between the oil major and an environmental group over vague language in air-pollution regulations — it would be open season for fossil-fuel trade groups and others to pick apart Biden’s climate regulations, even if he wins a second term. And it would put a chilling effect on future regulations, as agency staff will be forced to tread more cautiously, with the expectation of having their work picked apart by judges.

Slippery oil stats

Growth in barrels per day of oil demand in 2024 above 2023 levels, according to a forecast from the International Energy Agency. That’s slightly higher than the agency’s last forecast, but still about half of last year’s growth rate, which the IEA blames on EV adoption, higher vehicle efficiency standards, and low economic growth worldwide. Oil demand will peak by 2030, the IEA predicts. OPEC is more bullish; its new demand growth forecast is half a million barrels higher than IEAs, and it expects demand to grow well into the 2040s.

Gambling on disasters

2023 was a record-breaking year for catastrophe bonds, which insurers are increasingly relying on to cover the costs of insuring climate-vulnerable markets. Global “cat bond” issuance last year reached $15 billion, according to Swiss Re. This growing market — a sign that climate disasters are making insurers more desperate for new sources of cash — presents a lucrative opportunity for risk-tolerant investors, who stand to lose their investment if disasters exceed certain pre-set limits. 2023 was a relatively mild year for hurricanes, and Fermat Capital Management, a hedge fund that’s the world’s top investor in cat bonds, turned a 20% gain on its portfolio this year, Bloomberg reported.

Whither climate voters?

Could Donald Trump’s opposition to climate policy cost him re-election? A new study suggests it just might.

In an analysis of polling data from the 2016 and 2020 presidential elections, University of Colorado political scientist Matthew Burgess found that the importance voters ascribed to climate change was one of the strongest predictive factors of who they voted for, with higher concern favoring Democrats. Concern among Republicans, except among the most conservative, increased between the two elections. All else being equal, if the 2020 Republican candidate (Trump) had demonstrated more concern about climate change, he might have gained a 3% shift in the popular vote margin, which would have been enough to hand him the election, Burgess concludes. As it was, of the 2020 Republican voters for whom climate change was “very important,” about one-third voted for Biden. That’s only about 3.5% of total Republican voters, but in a close election that’s enough to matter, Burgess said. This year, “[climate] does seem likely to hurt him again,” he told me.

One problem with this theory is that although two-thirds of Americans view addressing climate change as important, only about 10% rank it as their top concern, and only a minority are willing to accept costs — higher electricity rates, for example — that may stem from climate policy. As the political columnist Matt Yglesias observed recently, support for climate policy may be “a mile wide and an inch deep,” which suggests it may be a risky issue for Biden to focus his re-election campaign on.

The key for capturing more of the borderline Republican climate voters, Burgess said, is a narrower message: They’re turned off by arguments about social justice, and motivated by climate policies that are “economically beneficial and sensitive to voters’ pocketbook concerns about inflation and energy prices; and framed in optimistic (as opposed to histrionic or millenarian), patriotic, and unifying ways.”

For the general election, the biggest challenge for Democrats is to get voters for whom climate is a top priority to actually turn up to the polls, said Nathaniel Stinnett, executive director of the nonprofit Environmental Voter Project: “We’ve seen in our research that low-propensity voters are more likely to prioritize climate change than consistent voters, which reveals there’s a significant amount of potential political power in the climate movement that just hasn’t been activated yet.”

New Energy

• In 2023, Amazon was the world’s top corporate buyer of renewable energy for the fourth year in a row. Its portfolio has enough wind and solar to power 7.2 million U.S. homes, the company said, and puts it on track to power 100% of its operations with renewables by 2025.
• The Pentagon is getting rooftop solar panels. The building, one of the world’s largest, is also installing heat pumps; the Defense Department expects the measures to save it $1.36 million a year on energy costs.
• The new market for trading U.S. clean energy tax credits has already topped $9 billion, according to the Treasury Department. At least 1,000 clean energy projects nationwide have or are preparing to sell their tax credits to investors, opening the floodgates to a new form of financing.

Finance

• Europe’s turbulent electricity market has minted a generation of speculators who are making billions trading short-term power contracts. “It’s ridiculous the amount of money they are making,” one consultant told Bloomberg.

Tech

• The world’s largest oil tanker company plans to add 120 low-emissions vessels to its fleet. Once built, Euronav’s 60 small compressed-hydrogen-powered ships and 60 ammonia-powered larger ships could be the world’s largest green fleet.

Politics & Policy

• The European Parliament approved a ban on the use of marketing terms like “climate neutral” that are based on carbon offsets. It also puts restrictions on a broad range of green marketing claims, requiring them to be vetted by designated third parties.

Batteries & Minerals

• U.S. mining firm Ablemarle, the world’s top producer of lithium, will cut $500 million in capital spending and lay off an unspecified number of workers due to a recent plunge in lithium prices. Although demand for the EV battery mineral is projected to surge, for now the market is oversupplied.

Climate Impacts

• The Greenland ice sheet is losing 30 million metric tons of mass per hour, a study this week found. That’s 20% faster than scientists previously predicted, and has contributed about half an inch to global sea levels since 1992.

Personnel

• Leading climate scientist Michael Mann is finally getting his day in court in a decade-old defamation trial. Hearings began this week in a lawsuit Mann brought in 2012 against conservative bloggers who had called him “fraudulent” and compared him to a child molester.
• Shell is cutting hundreds of jobs, concentrated in its low-carbon division. CEO Wael Sawan has promised to be “ruthless” in streamlining the company.

Joel Meyers, executive chairman of AccuWeather. His new book Invisible Iceberg charts how extreme weather shaped the course of human history.

Semafor’s 2024 World Economy Summit, on April 17-18, will feature conversations with global policymakers and power brokers in Washington, against the backdrop of the IMF and World Bank meetings.

Chaired by former U.S. Commerce Secretary Penny Pritzker and Carlyle Group co-founder David Rubenstein, and in partnership with BCG, the summit will feature 150 speakers across two days and three different stages, including the Gallup Great Hall. Join Semafor for conversations with the people shaping the global economy.

• House Speaker Mike Johnson talks like a lawyer. That might be a problem.
• Kenyan president’s war with judges emboldens his allies to defy courts.
• Path forward for U.S. aid to Israel grows more complicated.