At the end of every year, I like to look back on my work and see which themes and findings are as striking now as they were months ago. I’ve chosen ten ideas – and the ten charts to go with them – that I believe capture where we are right now in our efforts to deeply decarbonize the global economy. The ten range from capital formation to corporate boardroom composition to back-testing electricity demand outlooks from seven decades ago. This week we’ve got the first five; tune in next Thursday, December 23, for the 2nd half of the list.
$1.1 Trillion of Sustainable Debt in Nine Months
Sustainable debt products – loans and bonds with proceeds targeted to positive environmental investment or to furthering company social goals – only emerged as an instrument class eight years ago. Since then, issuance has skyrocketed, exceeding $750 million in 2020. At that time, BloombergNEF expected that another year of similar growth would get the world to its first year of $1 trillion of sustainable debt issuance. That did indeed happen in 2021, but it did not take the full year, or even a full three financial quarters. By the end of September, companies, banks, and government entities had issued more than $1.1 trillion of sustainable debt.
Climate Tech Investment
Early-stage investment in climate tech companies has skyrocketed. A decade ago, climate-focused companies were able to raise a few billion dollars, max, across asset classes, deal stages, and technologies. Now, climate tech companies are raising that much in a month, and at every stage, from pre-seed funding to billion-dollar pre-IPO rounds. Through November, climate tech companies have raised more than $49 billion for early-stage activity. Seems likely that the last few weeks of investing activity will tip that over $50 billion for 2021.
Heady valuations and investor FOMO combined with the very real need to fund planetary-scale innovation provide quite a tailwind for climate tech. As readers can well imagine, 2020 was a dynamic year for the global electricity sector. Despite massive and in many cases near-immediate changes in demand due to the Covid-19 pandemic, global power generation fell only two-tenths of a percent for all of 2020. Coal- and gas-fired power, and nuclear power, all declined year on year. Renewables, meanwhile, grew. More than just growing, though – renewables were the only growth in power generation last year.
Late-stage fundraising also is on fire. What might investors do with all that capital? I suggested that they come for the tool, and stay for the network. Some of those investors who raised multi-billion dollar private equity funds are doing exactly that, starting with electric vehicles in India.
All these numbers are a sign of enthusiasm, but they’re also an implicit promise from founders to investors that their companies will grow to match expectations. Here’s hoping, for the climate’s sake, that a healthy number of highly-valued climate tech startups succeed in that.
Renewables — The Only Growing Power Generation Source
Wind generation has a 16.6% compound growth rate in the past decade; solar, a 38.8% rate. That means that generation from each technology doubles in less than five years and less than two years, respectively. If wind generation were to grow at its current 10-year rate for just one more year, it would become the single biggest source of new power generation since 2010. If solar were to grow in the same fashion, it would be the biggest contributor to power generation growth by 2023.
Renewables > Nuclear
In 1965, nuclear power generated 24 terawatt-hours a year. All wind, solar, geothermal, and biomass power plants generated 15 terawatt-hours. For four decades, the gap between nuclear and renewable generation widened. Starting in the 2000s, though, nuclear generation plateaued, and renewables kept right on increasing in a smooth, steep curve. The result: renewable power generation exceeded nuclear generation in 2020.
From a climate perspective, nuclear and renewables are not in competition. There will be enough growth in electricity demand to support significant expansion of every zero-carbon power generation technology. Some of that expansion could even come from fusion, as the investors who recently placed $1.8 billion into Commonwealth Fusion Systems hope.
Electric vehicles are now 10% of passenger car sales
In the first quarter of 2010, 395 electric vehicles total were sold worldwide. Last quarter, 1.7 million were sold, of which more than half were in Asia. That sales growth has taken EVs from 0.002% of passenger car sales to 10.8% of sales globally, and more than that in both Europe and Asia.
China’s electric vehicle sales growth in particular is extraordinary. The world’s largest car market is now nearly 20% EV sales on a monthly basis. To put its sales in perspective: U.S. buyers have picked up 2.2 million EVs to date. China’s vehicle buyers have bought more than that many EVs from February through October of this year.
Nathaniel Bullard is BloombergNEF's Chief Content Officer.
Senate Democrats will vote later Tuesday to lift the nation’s debt ceiling by $2.5 trillion, which should provide federal borrowing authority “into 2023,” well beyond the midterm elections.
The Federal Reserve is positioning to raise interest rates at least three times next year in response to high inflation.
Read the full story here.
Read the full story here.
Her family profited from partisanship. Now she’s using the gains to try to rehabilitate the centre
DECEMBER 15, 2021 by Andrew Edgecliffe-Johnson
BREAKING OVERNIGHT — The House voted 222-208 to hold MARK MEADOWS in contempt of Congress and make a criminal referral to the Department of Justice. Just two Republicans — ADAM KINZINGER (Ill.) and LIZ CHENEY (Wyo.) — voted for the resolution, seven fewer than the nine Republicans who supported the recent contempt of Congress vote regarding STEVE BANNON. More from Nicholas Wu for Congress Minutes
— Elsewhere, Fox News hosts SEAN HANNITY and LAURA INGRAHAM on Tuesday night began to address their text messages to Meadows on Jan. 6 — and their subsequent coverage of the riot. (Their critics won’t be mollified.)
SETTLING (MOST) FAMILY BUSINESS — It took them a while, but Democrats have finally dealt with most of the tricky debt and spending issues that prevented them fully focusing on the Biden legislative agenda.
The Senate passed a debt limit increase of $2.5 trillion Tuesday afternoon, and the House followed suit just after midnight. Congress should be freed from addressing the issue again until 2023.
A final vote on the long-stalled NDAA is likely in the Senate today. Congress has funded the government through mid-February. It shouldn’t exactly get a big pat on the back for doing the basics, but the three issues were all cleared with some degree of bipartisanship and less brinkmanship and drama than expected.
The next big hurdle for Democrats? JOE MANCHIN.
Marianne LeVine and Burgess Everett expertly break down Manchin’s (D-W.Va.) role as the key to moving both President JOE BIDEN’s Build Back Better and voting rights legislation:
“During Majority Leader CHUCK SCHUMER’s leadership meeting on Monday evening, Democratic senators hotly debated how to handle their two biggest unfinished tasks. Some Democrats say they should kick both issues until next year; others argue the party’s leverage over Manchin won’t improve over time and want action now. And Tuesday interviews revealed a party wrestling with how to clinch its top priorities. …
“Manchin is not yet committed to the $1.7 trillion climate and social safety net legislation, nor does he support changing the Senate rules to push through an elections bill on a simple majority. He spoke with Biden Monday about the domestic spending bill and met with a trio of Democrats Tuesday to discuss voting rights and the rules changes needed to pass it, signs that the West Virginia Democrat is still open to casting his critical vote for both measures.
“Manchin is expected to speak to Biden again soon and also discussed voting rights legislation in Tuesday’s full caucus meeting, according to attendees.”
Some key quotes:
— Sen. RAPHAEL WARNOCK (D-Ga.): “Voting rights should be the very next thing we do."
— Sen. ELIZABETH WARREN (D-Mass.): “There’s no policy reason they have to be linked, but they do come down to the same person.”
— Schumer: “There’s a strong belief in the Senate that we can restore the Senate and at the same time deal with voting rights, and that’s what we’re aiming to do.”
— Sen. BERNIE SANDERS (I-Vt.): “We want both of them, but voting rights has more of a time issue because there are states already developing their district mapping. If we don’t move quickly it could be too late.”
— Sen. CHRIS MURPHY (D-Conn.): “There’s productive conversations happening about voting rights. Nothing’s landed yet. Just like there’s productive conversations happening on Build Back Better.”
There’s no white smoke from the upper chamber yet about where Manchin will land on either issue. We’ve long been bullish that some version of the reconciliation bill will pass, even if it’s trimmed further. The odds for voting rights legislation are longer. But given Manchin’s continued reluctance to come around on either front after months and months of talks, the possibility that Democrats will fail to pass both bills is becoming more real.
Good Wednesday morning. Thanks for reading Playbook. Drop us a line: Rachael Bade, Eugene Daniels, Ryan Lizza, Tara Palmeri.
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FIRST IN PLAYBOOK — DOUG SOSNIK was an adviser to BILL CLINTON for six years, and for some dozen years he has written regular memos about national trends that have attained something of a cult following among political junkies. We know many of our readers are fans of his wonky missives, so we’re pleased to present Sosnik’s latest memo, “A Look Ahead to the 2022 Midterm Elections and Beyond,” exclusively to the Playbook audience.
A key focus for Sosnik in determining the outcome of the midterms is where things stand in late summer of next year, when views about the economy and the direction of the country “harden” and it’s too late for the Biden administration to change them.
That gives the president just six to eight months to turn things around. Pay attention to employment numbers (June 3, July 8, Aug. 5), inflation data (June 10, July 13, Aug. 10) and the University of Michigan consumer confidence data released July 15 and Aug. 12.
Sosnik has a nice rundown and summary of what he calls the “Five Myths About American Politics in the Age Of Trump” that are well worth your time and attention:
1) DONALD TRUMP’s victory in 2016 was an aberration.
2) Demography is destiny, and that is good for the Democrats.
3) A higher turnout is always good for Democrats.
4) The Trump presidency has realigned the suburbs toward the Democratic Party.
5) Trump has pushed independents into the arms of the Democratic Party.
On the 2022 Senate races, he focuses on the fact that Democrats could be lucky that the GOP is barreling toward nominating a series of out-of-the-mainstream candidates in primaries in several key states. There’s a nice clip-and-save primary calendar to keep handy:
— Ohio (open, Portman): May 3 primary
— North Carolina (open, Burr): May 17 primary
— Pennsylvania (open, Toomey): May 17 primary
— Alabama (open, Shelby): May 24 primary
— Georgia (Warnock): May 24 primary/June 21 runoff
— Nevada (Cortez Masto): June 14 primary
— Arizona (Kelly): Aug. 2 primary
— Missouri (open, Blunt): Aug. 2 primary
— Wisconsin (Johnson): Aug. 9 primary
— New Hampshire (Hassan): Sept. 13 primary
A few more tidbits:
— On 2022 House races: “If the Republicans pick up a net of 35 seats next year — a distinct possibility — they would achieve their highest total of members in the House since 1929. However, the Republican win total could be somewhat tempered by the nationalization of our politics, in addition to their unexpected success in the 2020 House elections when they picked up a net of 14 seats.”
— On 2022 governor’s races: “If the Republicans pick up any of the presidential battleground states in the industrial Midwest (Michigan, Pennsylvania, Wisconsin), they will take total control of government in these states and, with this power, they could determine the voting procedures and counts in the next presidential election.” Read the whole thing
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