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Coal Is Hard to Quit; Google Wants to Dial Down Your Emissions
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Welcome back. "We must consign coal power to history," said Alok Sharma, the U.K. government minister overseeing the coming United Nations climate conference, last month. But just weeks before COP26 starts, a coal supply crunch is causing widespread economic disruption, a reminder for policy makers how dependent the world remains on the highly polluting energy source.
China is at the heart of the turmoil. As Beijing has sought to meet its climate targets, it allowed coal inventories to dwindle. It also halted imports of Australian coal amid a diplomatic row and has been tapping other suppliers. At home, the result has been electricity shortfalls on a scale unseen in more than a decade, and the ripples have spread abroad. In Europe, rising energy prices have hit factory output and driven bills higher. Major coal importers in Asia are jostling to secure supplies. The crunch is expected to last for months, raising fears of winter fuel shortages.
For some, resurgent coal consumption after the reopening of post-lockdown economies shows that talk about an energy transition has so far been overblown. “When economic growth gets crunched, coal demand slows and everyone thinks we’re transitioning away from coal, but as soon as growth comes back, coal use accelerates again,” said Rory Simington, analyst at energy researcher Wood Mackenzie. 🔒 Link requires WSJ subscription.
Also this week: Google Nest goes green; water fight in the Southwest; Russia's industry adapts to melting permafrost.
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COP26 Perspectives: Mike Teke
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In the runup to the COP26 conference in Glasgow, we're publishing interviews with people who can shed light on a key aspect of the climate agenda. This week: the chief executive of the company that supplies much of South Africa's coal.
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Even as banks and some global mining groups step away from coal, energy industry forecasts suggest that it will continue to be burned for decades, in part due to economic growth in the developing world. Mike Teke knows this dichotomy well. His company, Seriti Resources, became one of South Africa's leading energy suppliers by buying coal assets from Anglo American and South32.
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Mr. Teke spoke with WSJ Pro Sustainable Business about balancing the environment with economic development, China's decision to stop funding coal plants overseas, and his own worries about the impact of climate change.
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“First world economies, if they move in the direction of reducing their carbon emissions, must come to terms with the fact that...we cannot leave behind populations that still deal with poverty.”
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— Seriti Resources Chief Executive Mike Teke
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The Nest update is one of several new features Google unveiled to help users make more sustainable decisions. PHOTO: GOOGLE
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Emissions-curbing tools for Google's smart thermostat. Google said new features for its Nest smart thermostat will let users dial down their use of fossil fuels. If a homeowner chooses, the device can automatically adjust heating and cooling to favor cleaner energy. Residents might also decide to run appliances when wind and solar power is abundant. The Nest Renew service, which will be invite-only at first, is one of several sustainability features Google introduced this week. The Shopping tab in Google search will start suggesting green options when U.S. users browse energy-intensive appliances; Google Flights will display estimated carbon emissions for airplane tickets; and a
previously announced tweak that will make Google Maps recommend eco-friendly routes is being rolled out.
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Waltons push markets as solution to Colorado River crisis. The first-ever official shortage on the Colorado River has intensified a debate over how to provide water for 40 million people across the Southwest and irrigate crops. A Wall Street Journal analysis shows that a charitable foundation controlled by the Walton family, billionaire heirs to the Walmart fortune, has given about $200 million over the past decade🔒to a variety of advocacy groups, universities and media outlets involved in the river. Two federal
officials once affiliated with the foundation have been named to key Biden administration posts overseeing the river.
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Putting a monetary value on water has raised concerns among those who benefit from guaranteed access to water and those who believe markets benefit investors while hurting farmers and the poor. Walton officials say they are focused on helping farmers conserve water while continuing to grow crops.
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A gas pipeline runs through permafrost land near Pokrovsk, Russia. PHOTO: ARTHUR BONDAR FOR THE WALL STREET JOURNAL
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Melting permafrost adds risks for Russian industry. The melting of Russia's permafrost, a permanently frozen layer of soil and sediment under the earth’s surface, is both a consequence of global warming and a contributor to it, because the softening soil emits methane and carbon dioxide. As the temperature rises, some of Russia’s biggest businesses are adjusting their operations to adapt.🔒
Diamond producer Alrosa, which has most of its reserves in permafrost areas, has started shooting coolant beneath the ground to firm up its mines. Another miner, PAO Severstal, says it is building structures on stilts, to adapt to shifting ground. State-controlled energy giant Gazprom has installed 1,000 cooling units at its vast Bovanenkovskoye gas field to circulate refrigerant and keep the ground frozen.
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0.92
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Russia's average temperature increase per decade since 1976 in degrees Fahrenheit, more than double the global pace, according to government data.
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On Nov. 17 WSJ Pro will be hosting the first Sustainable Business Forum, looking at the critical issues facing business professionals as they incorporate sustainability into their strategy and operations. Discussion topics will include innovation, reporting, governance, green finance, supply chain and risk models. Register to attend here.
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Different strains of algae that come from the lab are grown outside at the Viridos headquarters in San Diego. PHOTO: ARIANA DREHSLER FOR THE WALL STREET JOURNAL
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Exxon persists with algae research. Other oil majors gave up research aimed at turning algae into transportation fuel after a flurry of investment at the start of the last decade yielded few results. Exxon is still pursuing🔒 the goal, working with Viridos, a company co-founded by genomics pioneer J. Craig Venter that wants to use gene-editing technology to increase the fat content of algal cells to produce more oil. Some scientists regard the project as a PR stunt; Exxon says it is making progress.
🎁 Newsletter extra: States call for stronger aircraft emissions standards. Several states, led by California, and the trade group International Council on Clean Transportation asked the Environmental Protection Agency to regulate aircraft carbon emissions beyond the International Civil Aviation Organization's standards, calling the U.N. body's approach a rubber stamp for existing aircraft and engines that don't cut emissions.
The group wants rules that go further, including phasing out in-service jets that don't meet stringent emissions standards, and stronger pollutant standards for new aircraft engines that are entering into service from 2030. The move follows a meeting this week at which global airlines said they would aim to hit net-zero emissions by 2050, versus a previous goal of a 50% emissions cut in that time.
—Kimberly Chin
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✍️ Feedback on this newsletter? We would love to hear from you, so please get in touch.
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Tesla Ordered to Pay More Than $130 Million in Damages to Black Former Worker
Tesla's diversity and inclusion profile is back in the spotlight following a jury ruling that it subjected an employee to a racially hostile work environment and failed to prevent racial harassment. A federal jury awarded $6.9 million in compensatory damages and $130 million in punitive damages to former elevator operator Owen Diaz, who worked at Tesla's Fremont, Calif., factory between 2015 and 2016. Tesla denied in a court filing that it was aware of the alleged discriminatory and harassing behavior and didn’t take action to protect Black employees. This isn't the first legal dispute over race-based harassment or discrimination at Tesla's Fremont plant. Former worker Melvin Berry won a $1 million judgment in
May after an arbitrator found that he was called racial slurs by his supervisors. Tesla faces similar claims in California state court, where a former assembly employee sued the company, alleging an intimidating, hostile and offensive work environment for Black workers. Tesla has denied the claims.
This is a sample of exclusive analysis of sustainability news from the Journal’s environment, social and governance (ESG) research analysts, whose work is primarily published by Dow Jones Newswires to help institutional investors and wealth managers integrate ESG factors into portfolio models, risk management programs and financial advice. The commentary by our research analysts is independent of the news coverage by reporters at the Journal. For more information about Dow Jones Newswires, click here.
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Shipping company Maersk, trading group Trafigura and cement maker Holcim are among the members of a group set up by U.S. climate envoy John Kerry aimed at cutting industrial emissions. (Bloomberg)
Hedge funds that snapped up oil and gas stocks sold by institutional investors for environmental reasons are profiting as energy prices surge. (Financial Times)
Financial risk specialists are split on whether climate risk should be seen as part of credit risk. What regulators decide could make a difference to the amount of capital they require institutions to hold as insurance. (Risk.net)
A new crop of startups are pitching services aimed at helping companies hedge extreme weather risk. (Axios)
A French startup wants to use enzymes to recycle single-use plastic. (MIT Technology Review)
Volvo Trucks received an order for 100 electric trucks from shipping firm DFDS, its biggest commercial electric truck order to date. (Reuters)
A new company wants to lay more than 2,000 miles of undersea cable to move solar-generated electricity from Morocco to the U.K. (Energy Voice)
Why using recycled plastic isn't enough on its own to stop plastic waste from piling up. (The Verge)
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We would like to hear your tips, suggestions and feedback.
This newsletter was written by Ed Ballard.
Contact the WSJ ESG research team at ESGresearch@wsj.com
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