SCOTUS climate decision, "The Lorax," & EV prices spike to $54K
The newsletter for independent thinkers on carbon and climate.
Issue No. 128
Welcome to the latest issue of Carbon Creed - a curated newsletter for independent thinkers on carbon and climate.
Happy Independence Day and National Clean Beaches Week!
SCOTUS climate change decision: the sky has not fallen.
In light of the Supreme Court’s ruling in West Virginia v. EPA, there are two fundamental truths to understand. The first is that the planet is warming, inexorably, coming evermore dangerously close to a point of no return that threatens our way of life and the habitability of the places we call home. The second is that combatting this warming trend requires a wholesale transformation of the market, away from fossil fuels and their associated emissions, on a timeline that meets science-based targets and not the bottom lines of short-term, polluting interests.
The Supreme Court has made the market transformation necessary to combat climate change more difficult. There will be debate over the breadth or narrowness of the ruling, or the climate merits of the proposed Clean Power Plan that was the genesis of the case. But make no mistake: the opinion will take away tools that allow us to achieve our climate goals at precisely the moment when we need to be pulling every lever possible to meet the realities we face.
Market transformation (at least the good kind) means moving from producing one set of results to a future that delivers much better ones. Markets evolve over time, but they are hardwired to optimize for those benefiting the most from the existing rules. The status quo is not good at replacing itself, especially not when pitted against a timetable that is both unforgiving and existential. For that, we need systemic policy and political action. The SCOTUS decision undermines those efforts.
It also reveals the Court to be out of touch and behind the times. Out of touch because the energy transition required to meet our climate targets must be thoughtfully and systemically executed, and not adjudicated case by case. This is not about managing the emissions from specific sources. It is about creating a near-term future where a supply of clean electricity powers clean machines on the other end: a future where we have plugs and not pipes.
The Court is behind the times because the effect of its ruling will be an energy tax on American families that undermines our energy security here at home. Families today are rightly concerned about the effects of inflation: nine out of ten Americans raise it as an issue they discuss at their kitchen tables. Those conversations are largely about spiking energy bills, which are driven almost entirely by the global volatility of fossil fuels. Shifting to an energy system powered by renewables will lock in decades of abundant, cheap power that will save American families thousands of dollars per year.
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Creed Thoughts: Though this ruling is disheartening, it only further reinforces the need for Congress to pass the climate provisions necessary to help bring about a swift energy transformation. The EPA is doing exactly what it should do: leveraging its authority to drive the market transformation required to meet our climate imperative. The Court has done exactly what it should not do: impede our progress by doubling down on interests threatening our life, liberty and happiness.
While the Court has made the work harder, they are not the arbiters of the future. The people must build a beautiful, abundant, climate-safe world. And that is exactly what the people are going to do.
[This post was adapted from the original written by Ari Matusiak for Rewiring America]
We’ll keep you posted on the latest carbon policy and market insights as they happen.
If you have an opinion on any topic covered in this newsletter, please feel free to send me an email at mcleodwl@carboncreed.com.
Thank you for your viewpoint and the value of your time.
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QUOTES
Words that will inspire you…
(source: Library of Congress)
"With freedom comes responsibility."
Eleanor Roosevelt (first lady, diplomat, activist)
"For to be free is not merely to cast off one's chains, but to live in a way that respects and enhances the freedom of others."
Nelson Mandela, (activist, lawyer, politician)
BOOKS
The Lorax
by Dr. Seuss
The classic Dr. Seuss story is a fantastic introduction to learn about sustainability and environmental protection, written in a way that makes it easy to relate to and understand for both children and adults alike. First published in 1971, this beloved yet important book talks about taking the Earth and its natural resources for granted through the eyes of Once-ler and the Lorax. The Lorax is a small creature who speaks on behalf of the trees and warns Once-ler not to make ‘thneeds’, a knitted object that resembles a sweater, with the Truffula trees. Throughout this story, readers explore the concepts of greed, deforestation and other unsustainable practices that are currently driving rapid climate change. The Lorax teaches kids to treat our planet with kindness and to stand up and speak up for others through climate advocacy.
So let’s revisit The Lorax to see what lessons we can glean. Below are three standouts:
The domino effect
I’m the Lorax who speaks for the trees, which you seem to be chopping as fast as you please. But I’m also in charge of the Brown Bar-ba-loots, who played in the shade in their Bar-ba-loot suits and happily lived, eating Truffula Fruits. NOW… thanks to your hacking my trees to the ground, there’s not enough Truffula Fruit to go ’round.
And my poor Bar-ba-loots are all getting the crummies because they have gas, and no food, in their tummies! They loved living here. But I can’t let them stay. They’ll have to find food. And I hope that they may. Good luck, boys, he cried. And he sent them away.
I, the Once-ler, felt sad as I watched them all go. BUT… business is business! And business must grow regardless of crummies in tummies, you know.
The message: It’s cause and effect. The “Once-ler” – the narrator who ultimately destroyed the environment – didn’t think about how cutting down Truffala Trees would affect the animals’ environment or the food supply. He only thought about profit. If we put profit above all else, it’s going to end in tears.
‘Biggering’
What’s more, snapped the Lorax. (His dander was up.) Let me say a few words about Gluppity-Glupp. Your machinery chugs on, day and night without stop making Gluppity-Glupp. Also Schloppity-Schlopp. And what do you do with this leftover goo? I’ll show you. You dirty old Once-ler man, you!
You’re glumping the pond where the Humming-Fish hummed! No more can they hum, for their gills are all gummed. So I’m sending them off. Oh, their future is dreary. They’ll walk on their fins and get woefully weary in search of some water that isn’t so smeary.
And then I got mad. I got terribly mad. I yelled at the Lorax, Now listen here, Dad! All you do is yap-yap and say, Bad! Bad! Bad! Bad! Well, I have my rights, sir, and I’m telling you I intend to go on doing just what I do! And, for your information, you Lorax, I’m figgering on biggering and Biggering and BIGGERING and BIGGERING!! Turning MORE Truffula Trees into Thneed’s which everyone, EVERYONE, EVERYONE needs!
The message: “My rights” – that old chestnut. Dr. Seuss drives this point home with a sledgehammer: “Biggering” is not the winning formula. The message is: Be mindful of our consumption and resist greed. Bigger isn’t better. And pollution kills fish.
There’s still hope
But now, says the Once-ler, Now that you’re here, the word of the Lorax seems perfectly clear. UNLESS someone like you cares a whole awful lot, nothing is going to get better. It’s not.
SO… Catch! Calls the Once-ler. He lets something fall. It’s a Truffula Seed. It’s the last one of all! You’re in charge of the last of the Truffula Seeds. And Truffula Trees are what everyone needs. Plant a new Truffula. Treat it with care. Give it clean water. And feed it fresh air. Grow a forest. Protect it from axes that hack. Then the Lorax and all of his friends may come back.
The message: The Truffala Seed symbolizes the environment, transformation… and hope. Dr. Seuss was apparently inspired to write The Lorax because he was upset about a cypress tree being cut down in La Jolla, California. His conclusion is a call to arms – “someone like you.”
If only we’d truly heeded the Lorax’s call 50 years ago. Now, we must. We’re still in charge of the Truffula Seeds. And if we don’t “plant” them right now, there won’t be another chance in 50 years.
[This post was adapted from the original written by Michelle Lewis for Electrek]
Creed Comments: This 4th of July weekend, read this book and reflect upon the fires ravaging our forests and the tons of plastic debris polluting our oceans, and resolve to make a difference going forward.
INSIGHTS
EV prices spike as costs & demand grows
It comes as no surprise that the price of electric cars is rising. It seems the price of just about everything is rising, and ever since the COVID-19 pandemic, it also seems it's simply harder to get the things that we need and/or want, which leads to an increase in demand. As demand increases and materials are scarce or difficult to acquire, prices tend to rise. Let’s examine four trends shaping the US electric vehicle market today.
1st Gear: The Average Cost of EVs Is on the Rise
Everyone knows that electric vehicles are more expensive than their gas-powered counterparts. Thanks to increasing demand for battery-powered cars and the rising costs of the components needed to make them, many EV manufacturers are raising the prices of their cars even more.
The Wall Street Journal reports that price hikes from the likes of GM, Tesla and Ford now mean that the average price of a new EV has hit $54,000 — making it around $10,000 more than the average cost of a new gas-powered car.
According to the WSJ, carmakers have been steadily raising the prices of their EVs “partly to offset the soaring cost of materials used in their large batteries.” This has included a hike in the cost of a Hummer EV by more than $6,000 and a warning from Ford that it was no longer making a profit on sales of its Mustang Mach-E. The WSJ reports:
“The companies say they are trying to offset a recent price rise in raw materials that go into the batteries to power electric cars, by far the most expensive component of an EV. Prices for lithium, nickel and cobalt have roughly doubled since before the Covid-19 pandemic began, according to consulting firm AlixPartners LLP.”
In recent months, Tesla and Rivian have also raised the prices of their fleets of electric vehicles. This, coupled with, in some cases, phased-out EV tax credits mean that one of the biggest barriers to EV adoption seems to be getting bigger.
However, as more marques launch their battery-powered models onto the scene, competition could force prices to trend in the opposite direction. Here’s hoping the release of new models from the likes of VW, VinFast and Hyundai can help do that.
2nd Gear: Japan Wants to cut Zero-Emission Vehicle Targets
While countries around the world are targeting a shift to zero-emission vehicles like EVs, hydrogen-powered trucks or other cleaner means of power, Japan appears to be dragging its feet.
The country, which is home to automakers such as Toyota, Subaru, and Honda has reportedly lobbied its fellow G7 countries to remove targets for zero-emission vehicles from its goals to tackle climate change. As reported by Reuters:
“Japan has proposed removing a reference to a ‘collective goal of at least 50% zero-emission vehicles by 2030.’ In its place it has proposed a less concrete target of ‘significantly increasing the sale, share and uptake of zero-emission light duty vehicles recognising the range of pathways that members are adopting to approach these goals,” according to a draft of the communique reviewed by Reuters.
That all sounds pretty wishy-washy, as there’s nothing quite like replacing a hard, numerical goal with something vague like “significantly increasing” sales of zero-emission vehicles. Who defines what a significant increase looks like?
Here in the U.S., President Biden has said he wants 50% of all new vehicles sold to be zero-emission by 2030. This would see sales of such cars rise from 340,000 in 2020 to almost 9 million per year by 2030.
3rd Gear: Rising Gas Prices Aren’t to Shift Smaller cars
And it isn’t just global targets for EV adoption that could struggle to encourage people to buy battery-powered vehicles, the rising price of gas isn’t doing much to help the switch either.
Where you might expect that the current $5 per gallon average we’re facing in the U.S. might force people to reconsider their daily drivers, a new report from Automotive News says this hasn’t quite happened yet.
The report found that despite the high cost of refilling the tank on your F-150 or Suburban, drivers across the country remain tied to their larger cars. This, it says, is at odds with what happened in 2008, when fuel prices also saw a sharp rise that topped out at $4 per gallon. Back then, automakers rushed to push out more economical vehicles because of consumer demand.
But now, automakers aren’t seeing similar demand. And that, according to the report, is as a result of the increased efficiency of these larger cars in 2022 compared with 2008. According to Automotive News:
“Aside from a proliferation of electrified options, experts point to a significant improvement in the fuel economy of most internal-combustion vehicles, including large pickups and utilities. A 2022 four-wheel-drive Ford F-150, for example, is rated at 21 mpg combined, 50 percent better than a comparable 2008 model.”
As such, Automotive News reports that demand for new, gas-powered cars and trucks remains high. So much so that suppressed inventories as a result of production issues still can’t quite keep up with consumer interest.
4th Gear: Hyundai and Kia are Sweeping the EV Floor
Ford may soon need to take a leaf out of Hyundai and Kia’s playbook. That’s because the two carmakers have been sweeping up since launching their newest EVs here in the U.S.
In fact, Bloomberg reports that the Ioniq 5 from Hyundai and the EV6 from Kia were two of the best-selling electric vehicles in the US for the first five months of 2022. The two new EVs outsold everything from the Ford Mustang Mach-E to the Chevrolet Bolt and Nissan Leaf. According to Bloomberg:
“Earlier this year, the South Korean carmakers rolled out two new battery-powered cars — the Hyundai Ioniq 5 and its sibling, the Kia EV6 — which promptly tore up the sales charts, passing the Nissan Leaf, Chevrolet Bolt and every other electric vehicle on the market not made by Tesla. In the US this year through May, Hyundai and Kia sold 21,467 of these two machines, besting even the white-hot Ford Mustang Mach-E, which was snapped up by 15,718 drivers.”
Is the real key to unlocking EV volume a pair of cool-as-heck battery-powered SUVs disguised as hot hatchbacks? Who knew.
Creed Comments: $54,000 for a new EV is troubling. But discovering that 12.7% of new car buyers are financing their purchases and paying more than $1,000 a month (June 2022 data from Edmunds), was shocking.
We can all guess the reasons: inflation and limited new-vehicle supply have led to high new-car prices, which result in these higher monthly payments. But to have a car payment the size of a mortgage is ridiculous.
To deal with the high cost of new cars, shoppers are taking out longer loans and accepting higher annual percentage rates. More new car buyers (36.1 percent) are choosing longer loan terms of 73 to 84 months than the 32.8 percent who did so in June 2021.
Price is the biggest impediment to transitioning from ICE to EV cars. We need new models for pricing mobility - subscriptions may be an innovative approach. Otherwise, there is no way average people can afford the clean energy economy.
[This post was adapted from the original written by Owen Bellwood for Jalopnik]
RESOURCES
The Science of Climate Change Explained: Facts, Evidence and Proof, published by the New York Times
Currents a podcast featuring in-depth discussions with experts on clean energy and sustainability, published by Norton Rose Fulbright.
Matter of Fact, a weekly newsmagazine that focuses on socioeconomic and climate issues in America, hosted by veteran journalist Soledad O'Brien.
Advancing Inclusion Through Clean Energy Jobs a report by the Brookings Institute.
Congressional Policy Tracker a summary of current federal energy legislation.
Click Clean your favorite apps and tech company clean power rankings.
The Keeling Curve a daily record of global atmospheric CO2 concentration.
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