Net Zero

1. Fed to the rescue
2. Solar boom
3. Climate snafu
4. Energy payback
5. Banks fire polluting clients

Climate kids take to the NYC streets.

Fed to the rescue

The US Federal Reserve’s decision to cut interest rates by half a percentage point should give a jolt to the clean-energy industry. Compared to fossil fuels, the costs of renewables projects are typically front-loaded, which makes developers highly sensitive to borrowing costs. In the 2010s, when the Fed kept rates near zero, those costs were generally very low, which was a major factor driving the speed at which the renewables industry was able to mature. But as rates have gone up in the last few years across the Western world, interest rates have become one of the clean-power sector’s biggest drags.

This week’s change will especially help residential solar companies, and some like SunRun and Enphase have already raised their profit expectations for next year, said Kevin Stevens, partner at the investment firm Energize Capital. For commercial-scale project developers with longer lead times, Stevens said, the more important question will be whether deeper cuts are forthcoming. (The Fed’s policymakers indicated they expect to cut rates by another half point before the end of this year.)

Solar boom

Global solar panel installations are on track to hit an annual record this year. Solar capacity will likely grow by 593 gigawatts this year, a 29% jump over the amount that was added last year, according to a report by the think tank Ember.

More than half of those panels will be installed in China. Pakistan, India, and Saudi Arabia are also witnessing explosive solar growth, driven by plummeting costs and government decarbonization incentives. But maintaining the pace will require that panel manufacturers find new ways to protect their margins, and that grids and utility-scale storage expand significantly.

Climate change is an enemy no military is prepared to face

We think Western democracies are immune from climate violence. They’re not.

A lot of the risk in richer countries depends on climate crises elsewhere. But from within the West as well, we can see the makings of significant climate-related chaos. Europe and the United States already experience more crime during periods of the kind of extreme weather that climate change makes much more likely. Plenty of our own economic sectors could take major, possibly existential hits—to uncertain societal effect. And though the green transition may be an economic boon overall, it will not be possible without generating losers at home. The fact that those losses are unevenly distributed is already providing rich pickings for demagogic politicians.

In this chaotic, potentially more violent world one might imagine that we will have greater need of militaries. Early evidence certainly seems to bear that out, with troops from scores of nations now called upon to help during natural disasters, and security officials girding themselves for extra climate-related challenges. “I think it’s pretty clear that even modest sea level rise will trouble North America and Europe no end,” said James Woolsey, who directed the CIA during the Clinton administration. “People who don’t get this should read more.”

For a start, they will be called upon to help tackle climate change fallout. In many countries, they already are. In the United States, members of the National Guard devoted 172,000 days to fighting fires in 2021, about 10 times more than they did in 2019. In Switzerland, soldiers have airlifted water to cows high up in the Alps over several recent summers, their ordinarily plentiful watering holes scorched into nothingness. The Swedish air force actually has bombed forest fires into quiescence. (Like blowing out candles on a cake, the shock waves can douse flames.)

In conversation with strategic planners from a dozen different militaries, many have come across as deeply ambivalent about these new responsibilities. In 2022, Slovenia delivered a timely reminder of the difficulty that smaller states might experience in marrying new duties to their core missions. With the country riven by wildfires and much of the military deployed to fight them, the government canceled a $300-million-plus deal to retool its forces with armored personnel carriers, a deal that policymakers had deemed necessary in light of its newly threatened near-neighborhood. But, as the challenge mounts, militaries are unlikely to have much choice. “The reality is that this is just a big part of national security,” said Woolsey.

Nights of Net Zero: Powering the Future

David Hardy, Group EVP and CEO Americas, Ørsted and Kathleen Barrón, EVP and Chief Strategy Officer, Constellation join Semafor on Monday, Sep. 23 to discuss the most efficient ways the energy sector can meet the moment and maintain clean, reliable energy. Networking reception to follow. Request Invitation.

The Next 3 Billion

President Julius Maada Bio, Sierra Leone and Mcebisi Jonas, Chairman, MTN Group will join the stage at The Next 3 Billion summit on Tuesday, Sep. 24 — the premier US convening dedicated to unlocking one of the biggest social and economic opportunities of our time: connecting the unconnected. Request invitation.

Nights of Net Zero: Climate Innovations

Tom Steyer, Co-Executive Chair, Galvanize Climate Solutions, Mary de Wysocki, SVP and Chief Sustainability Officer at Cisco, and Heather Zichal, Global Head of Sustainability, JPMorgan Chase join Semafor on Wednesday, Sep. 25 for an evening of forward-looking discussions on climate finance and AI’s role in advancing low-carbon technologies. This discussion is followed by a networking reception. Request Invitation.

Net Zero Climate Week happy hour!

Join Tim McDonnell and Prashant Rao for a casual off-the-record happy hour to round off Climate Week on the evening of Thursday, Sep. 26. RSVP here.

Energy payback

The amount of new aid funding the European Union will make available to repair energy systems and build renewables in Ukraine. The money comes from frozen Russian assets held by the EU, said European Commission President Ursula von der Leyen, “because it is only right that Russia pays for the destruction it cost.” A report this week from the International Energy Agency warned that the coming winter in Ukraine was likely to be the most severe, in terms of blackouts and possible heating shortages, since Russia’s full-scale invasion, and that Kyiv may need to import natural gas from Europe to make up for domestic production shortages. Meanwhile, Russia is forging ahead with the buildout of its “shadow fleet” of LNG tankers to evade Western sanctions.

Bank prepares to fire polluting clients

The Dutch bank ING will soon begin dropping high-carbon clients that don’t demonstrate progress toward decarbonization, chief executive Steven van Rijswijk said. That’s a step that most banks haven’t been willing to take; even those with net zero targets for their loan books often say they want to invest more in high-carbon sectors, to help finance those industries’ emissions-reductions activities. But because banks are hard-wired to keep clients, there’s little accountability to keep “transition finance” from slipping into greenwashing. For van Rijswijk, the decision to strike a harder line with climate laggards was still ultimately about protecting the bank’s margins, he told the Financial Times: “There are companies in there who have more imminent financial risks because their assets might be stranded.”

If anything, van Rijswijk’s position is becoming rarer on Wall Street, as pressure from anti-ESG politicians causes a growing number to walk away from stringent climate targets. Climate advocates shouldn’t count on Wall Street to decarbonize the economy, a report from the Institute of International Finance, a trade group, warned: “Expecting banks collectively to rapidly reallocate their portfolios may not be compatible with maintaining a profitable, diversified business model.”

New Energy

• Lawsuits are coming thick and fast for the US offshore wind industry, and some are succeeding in scuttling major projects.

Fossil Fuels

• Record-breaking US oil production has “been good for the American consumer and good for national security,” top White House climate official John Podesta said.
• Electrification of oil and gas drilling operations has the potential to cut the industry’s upstream emissions 80%, according to Rystad Energy.
• Oil and gas companies are increasing their spending on ads that run during sporting events.

Finance

• The global green bond market, which has grown to more than $3 trillion, does little to actually cut emissions, a study found, with less than 2% of US green bonds going to support genuine new decarbonization efforts.
• Facebook owner Meta will spend up to $16 million on carbon offset credits in Latin America, mostly from forest restoration projects in the Amazon.

Tech

• Holcim, one of the world’s largest concrete manufacturers, bought a stake in the low-carbon cement startup Sublime Systems.

Politics & Policy

• Inflation Reduction Act tax credits for clean energy would be a primary target of the next Congress if Republicans maintain a majority in the House, Speaker Mike Johnson said. Separately, former Vice President Al Gore issued a similar warning that a Donald Trump victory “would be very bad” for the energy transition.

EVs

• EU officials pushed off a vote on whether to impose tariffs on China-made EVs.
• Commercial trucks are overtaking passenger vehicles as the main source of transportation-related emissions, BloombergNEF said, and zero-emission models accounted for just 1.5% of global truck sales in 2024.

Food & Agriculture

• A consumer protection lawsuit accused Tyson Foods of greenwashing its beef products by over-relying on dubious carbon offsets to reach net zero.

Kamea Ozane, 11-year-old climate activist from Sulphur, Louisiana.

• AI startup aimed at demystifying the world of public policy secures new funding.
• The late GOP push to deny Kamala Harris a Nebraska electoral vote.
• CERN to expel hundreds of Russian scientists.