Singh’s Secretive Company Attracts Scrutiny: Green Summit Update
(Bloomberg) -- Top executives, policy makers and investors gathered this week for the two-day Bloomberg Green Summit. The virtual event focused on the core issues of climate change.
Today’s lineup included Canadian Prime Minister Justin Trudeau, former Bank of England Governor Mark Carney and QuantumScape Corp. co-founder Jagdeep Singh. The discussions centered on topics ranging from reducing emissions to real estate and batteries.
The conference started Monday with speakers such as former U.S. Vice President Al Gore, who said the global fight against climate change is accelerating and reaching a “political tipping point right now.” It ended Tuesday with the interview with Singh.
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QuantumScape Attracts Short Seller Scrutiny (2:10 p.m. NY)
QuantumScape Corp. Chief Executive Officer Jagdeep Singh said much of the company’s future success depends on its ability to protect its battery technology and retain top talent.
“The reason for secrecy is because it takes a lot of time and energy to work on these new materials,” Singh said. “I don’t have a problem with secrecy. What I have a problem with is, if you’re going to be secret, then you shouldn’t make claims.”
And, Singh added that “if you’re going to make claims about your performance, you have to show the data that supports those claims.”
Scorpion Capital, a short seller, issued a report almost two weeks ago calling QuantumScape a “scam.” Singh said the firm’s allegations are unfounded.
Many of the salient issues raised by Scorpion -- such as the difficulty of finding new industry-grade materials, showing test results from small batteries, or not subjecting the battery to independent evaluation -- have been reviewed in the past.
The Scorpion report was “full of lies, misinformation and innuendo,” Singh said.
Heat Stress Threatens 2.5 Million Jobs in Latin America and Caribbean (1:15 p.m. NY)
As many as 2.5 million jobs may be lost in Latin America and the Caribbean by 2030 because of heat-related stresses, said Andrea Meza Murillo, Costa Rica’s environment and energy minister.
“It’s a critical situation where we are,” she said. The planet needs to see ambition on the environmental front and the biggest emitters need to take urgent steps to reduce greenhouse gas emissions, she said.
Central America is subject to hurricanes, while heat waves brought have ravaged regions across the world.
Still, Murillo said she is optimistic that initiatives are underway to try and address climate change, not just by environmental agencies but by all parts of governments. Systemic approaches will help catalyze action, she said.
Former Goldman Exec’s Winning Strategy: Leave Fossil Fuels Years Ago (12:45 p.m. NY)
Bob Litterman, chairman of Kepos Capital’s risk committee and a former Goldman Sachs Group Inc. executive and financial economist, saw markets entering a long, slow endgame for coal, tar sands, oil, and gas many years ago, and did the logical thing. He started to pull out.
“That has been a winning strategy for many, many years now,” he said. Today, it’s too late to divest from many assets because they’ve already basically become stranded. “It’s played out. It’s hard to worry about coal, because there’s hardly any valuation in coal.”
He also has advocated in Washington and beyond for widespread carbon pricing, an approach that he says falls out of a basic tenet in economics: Incentives change behavior. As co-chair of the Climate Leadership Council, Litterman has helped propose a carbon-pricing plan that he said appeals to an enormous audience, from environmentalists to major oil producers.
“And the sad thing is, we can’t get any support from our friends on the Republican side of the aisle for this,” he said. “I don’t know why we can’t find Republicans.”
Last year, Litterman led a Commodities Futures Trading Commission advisory subcommittee on climate-related market risks. The first of more than 50 recommendations were to implement economy-wide carbon pricing.
He has long favored carbon pricing because it falls out of a basic tenet in economics: Prices change behavior. Gasoline taxes are currently the closest the U.S. comes to levying a price on carbon. They’re not designed to do that, and do it very poorly. Those levies, and supports for both renewable and fossil-fuel energy, leave the U.S. with “total incentives to reduce emissions” of about $18 a metric ton, which is “much too low,” Litterman said.
“Today, I would say, it might not be 10 times, but on that order of magnitude for sure,” he said.
Biden Aide Says U.S. ‘Coming From a Place of Humility’ on Environment (12:25 a.m. NY)
A key climate aide to President Joe Biden vowed a “durable” U.S. response to climate change.
Melanie Nakagawa, a senior adviser at the U.S. National Security Council, said the U.S. is “coming from a place of humility,” after rejoining international efforts to combat climate change, which had been abandoned under the country’s previous administration.
The Biden Administration laid out new climate goals last week for the U.S., including cutting in half the country’s emissions by 2030.
“We have a durable plan,” said Nakagawa, who described a “whole of government” approach being taken by the U.S. to lower its emissions. “We’re really here to really focus on how do we bring others to the table with us.”
Former Irish Leader Prods Nations for Detailed Goals, Accountability (11:55 a.m. NY)
Former Ireland President Mary Robinson said nations need to think more about their roles in fighting global warming.
All governments should commit to a long-term goal of net-zero emissions by 2050, “and then work backwards to 2030, and then work backwards from 2030 to 2025, to now, to say exactly what they would do in terms of reducing emissions,” she said.
Rich countries have a critical responsibility to help finance clean growth and adaptation in developing nations, because they “built their economies on fossil fuels, and benefited from that, and must now help the developing countries not to go there,” Robinson said.
She has pushed for corporations to take on “their appropriate responsibility” for climate change, and months before the Paris Agreement helped launch the B Team, a group of executives eying climate action with ambition — and without greenwashing, she said.
“I’ve watched them push each other since then, with peer pressure,” Robinson said. “There have been hiccups on the way, but they’re still very committed.”
By contrast, fossil-fuel companies “spend more on advertising than they spend on the green work they’re doing,” she said.
Robinson’s summit appearance was a live recording of the climate-policy podcast, “A Matter of Degrees,” which is hosted by Leah Stokes, assistant professor of political science at the University of California, Santa Barbara, and Katharine Wilkinson, an author, strategist, and educator.
Robinson has a podcast of her own, called “Mothers of Invention,” which carries the tagline “Climate change is a manmade problem with a feminist solution,” although she is quick to caveat that women contributed to the problem and men can be a part of the solution. The work grew out of a decade-old push to raise the voices and profiles of women in international policy debates.
“I saw the difference it made,” she said.
City Officials Back Government Climate-Change Efforts -- And Want Even More (11:20 a.m. NY)
City officials from Paris, Phoenix and Charlotte, North Carolina, said they’re supportive of national government efforts to combat climate -- and are hoping for more.
“As leaders in our own entities, it is very important to be joined by the federal government,” said Vi Lyles, mayor of Charlotte, which has adopted goals to dramatically cut its emissions. “To have support that’s financial as well as policy-based is essential to an urban community.”
Célia Blauel, the deputy mayor of Paris, meanwhile, said national governments should step up even more. The city is “happy that they join us, even if local authorities feel like this isn’t enough right now,” said Blauel, who added that the national efforts still are not enough right now.
EU Must Be Strong on Human Rights in China, Timmermans Says (10:45 a.m. NY)
The European Union will continue to push China to tackle human-rights abuses in Xinjiang, China, said Frans Timmermans, the European Commission’s first vice president.
Beijing has been accused by some governments of abuses against Uyghur Muslims that include forced labor. Factories in Xinjiang produce almost half of the world’s polysilicon, a key component in solar panels.
“One thing I know for sure is if you’re not clear about this, if you’re weak about this, nobody will respect you,” Timmermans said. “Nobody in China, nobody elsewhere.”
This position may lead to “tensions with China, but that’s part of where we are internationally,” he said, adding that having the U.S. government again embracing multilateralism under President Joe Biden will be a “game changer” in efforts to improve the situation.
Timmermans is in charge of orchestrating the Green Deal -- a package of policies designed to deliver a climate-aligned recovery from the pandemic. He said the biggest threat to the program is if the average person gets hit financially.
The EU’s executive arm is mulling the creation of an additional system of pollution-cutting incentives known as emissions trading for buildings and road transport. Timmermans hinted drivers and homeowners wouldn’t be on the hook to pay these charges.
“We need to make sure that the tax shift is not just about taxing emissions more, it’s also about making sure that this burden is shared in an equitable way across society,” he said. “One of the biggest threats to the European Green Deal is that the effects of our measures would be too harsh on people who have very little money to spend.”
Timmermans said he doesn’t expect the EU to implement a ban on new cars with internal-combustion engines, even though some member states, including France, have done so. He added that the shift to zero-emissions vehicles is happening much quicker than many expected.
“We have to be careful on the government side that we don’t create a barrier by not providing the right infrastructure for our citizens to be able to just afford electric mobility or even to be able to move around adequately with electric mobility,” he said.
Enel’s Starace Sees Cities in Emerging Markets as Big Opportunity (10:40 a.m. NY)
Emerging markets are the next big opportunity for sustainable investors, Enel SpA Chief Executive Officer Francesco Starace said.
“In emerging markets, everything is needed,” he said. “Emerging markets are increasingly metropolitan monsters and what happens in cities shapes climate more than we think.”
Even if cities in emerging markets are populated with people whose buying power is currently low, that will change over the next two decades, Starace said. These cities are where wealth will be created going forward and being there now to help fix problems will deliver rewards in the future, he said.
“It’s a huge task but a great opportunity,” Starace said. “Emerging markets are an incredible source of opportunities for sustainable finance.”
Carney Says Banks Will Be Judged on Decarbonization Efforts (9:45 a.m. NY)
The financial-services sector will play a crucial role in facilitating the transition to a world of net-zero emissions, but the industry also must ensure that its carbon footprint is decreasing, said Mark Carney, United Nations special envoy for climate action and finance.
“Part of your job is to judge which companies are going to decarbonize and whether to back those companies with investments or loans, but you too will be judged and you need to get your own house in order,” said Carney, who’s also vice chair and head of impact investing at Brookfield Asset Management and former governor of the Bank of England.
He said the Glasgow Financial Alliance for Net Zero, an initiative he spearheaded that brings together more than 40 global banks including Morgan Stanley and Citigroup Inc., is committed to reducing pollution from investment and financing portfolios. The initiative is part of the UN’s Race to Zero campaign and is considered “the gold standard” for net-zero commitments.
Carney said COP26, a climate change conference scheduled for November in Glasgow, will be a crucial moment to assess the private sector’s involvement in the low-carbon transition. An analysis of emissions reductions by governments also will make it a milestone event, he said.
“The objective for Glasgow, first and foremost, is to keep the one and a half degree temperature rise within reach,” he said.
Trudeau Says Canada Will Meet Emissions Goal (9 a.m. NY)
Justin Trudeau defended Canada’s climate record against criticism its emissions targets aren’t ambitious enough, arguing his government’s carbon tax represents a more concrete plan.
The prime minister vowed the country will be able to reach its new goal of reducing emissions by between 40% and 45% of 2005 levels by 2030 -- despite missing previous targets. Central to that plan is a carbon tax, which got a major boost last month when it was upheld by a 6-3 majority at the Supreme Court of Canada, effectively settling years of heated political debate.
“The fact that we have one of the realest prices on pollution of all our peer countries and that we are at the same time an exporter of energy and a producer of energy -- that is a challenge that not all other countries have,” Trudeau said.
Trudeau has been facing increased scrutiny since the release of data two weeks ago showing Canada is the only country in the Group of Seven to see its harmful emissions rise between 2015 and 2019.
Trudeau said Joe Biden’s arrival to the White House means the U.S. and Canada are more aligned on climate policy, even if friction remains over specific projects like Enbridge Inc.’s existing Line 5 conduit under the Great Lakes. A cross-border plan that cuts across all sectors of the economy is critical for both countries, the prime minister said.
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