By David Callaway, Callaway Climate Insights

The deadly combination of Covid and climate change has pummeled the world especially hard this month, from heat and fire on the West Coast of North America to flooding in Germany and the surging Delta variant in Indonesia and Africa. But when it comes to government spending on these issues, climate change isn’t even in the same league.

New estimates out today from the International Energy Agency in Paris show only 2% of the world’s estimated $16 trillion in emergency spending to support people and economies since the pandemic struck, or about $380 billion, has been earmarked for clean energy transitions.

The IEA released its new sustainable recovery tracker this morning along with depressing estimates of how far behind governments are in their attempts to reduce greenhouse gas emissions.

While the European Union’s new climate strategy, the Biden Administration’s budget plans, and China’s new carbon market are all signs of show, even a cursory glance at the IEA numbers shows the shortfall we will see without private investment.

Fortunately, new data solutions such as Subak announced this week, Cervest, which we wrote about two weeks ago, and improved regulations on environmental, social and governance disclosures among companies continue to push us forward.

It might seem easier some months just to short every climate-related investment, but the growing scale of the problem only means the returns on potential solutions will be that much bigger.

More insights below. . . .

Tuesday’s subscriber insights: Check your ticket; plus, bring on the batteries for U.S. energy storage

. . . . The plan by Barings Investments to create an internal carbon price on its traveling executives should bring fear and loathing to global airlines and their shareholders. Premium seats were the lifeblood of these airlines pre-Covid, but without the business traveler, they will need a new strategy. Read more here. . . .

. . . . Indonesia has begun to get serious about the geothermal assets under its archipelago, identifying more than 300 sites across its islands for possible exploration, with 24 gigawatts in energy reserves. While expensive and difficult to reach, the plan shows how geothermal is beginning to take a seat at the renewables table. Read more here. . . .

. . . . The Big Oil-backed American Petroleum Institute is, along with the individual companies, engaging in the same double-talk as the cigarette industry did before states and the federal government got tough at the end of the 20th century. How long before the API is also snuffed out? Read more here. . . .

. . . . Bring on the batteries! Energy storage in the U.S. has become a multibillion-dollar business, but one that cannot keep up with demand. How will companies and consumers benefit from the experiments in which Tesla and local governments try to reduce electricity rates by tapping into home energy-storage systems? Read more here. . . .

The facts behind the shocking news about the Amazon Basin’s decline

. . . . Even in jaded climate circles, it was shocking news last week. The Amazon Basin had hit the tipping point to become a net emitter of greenhouse gases instead of the world’s largest carbon sink. Mike Molinski takes a detailed look at the study behind the report in the journal Nature, which was the first of its kind to cover almost a decade of environmental data. With the Brazilian government stripping resources, and wildfires raging, parts of the basin are indeed contributing more carbon, but there might still be hope if the other parts can be protected. . . .

Read the full story

Editor’s picks: China’s carbon market, Unilever deal for sustainable soap, and Generate Capital raises $2 billion

China has launched the world’s largest carbon emissions-trading exchange. It’s part of the nation’s efforts to reach carbon neutrality by 2060. The scheme supports companies that are more successful in cutting pollution while penalizing heavy emitters, which will have to buy additional carbon emission permits from more efficient companies. Watch the video from the South China Morning Post.

Unilever, Arzeda team up to create more sustainable cleaning products

Unilever (UL)  has joined up with Arzeda to find new enzymes that can be used to create more sustainable cleaning and laundry products. Arzeda optimizes enzymes derived from nature to replace ingredients with a high environmental footprint. The companies said the partnership will impact many cleaning and laundry products, including Unilever’s OMO (Persil), Sunlight, and Surf. Under the agreement over the next three years, the global consumer goods company will apply Arzeda’s digital biology techniques to its own product innovations across its cleaning and laundry portfolio. Seattle-based Arzeda says that as well as exploring enzymes occurring naturally in the world, it also is able to design diverse, new versions with unique benefits that would otherwise not have been possible.

Generate Capital raises $2 billion for clean tech development

San Francisco-based Generate Capital has announced a new funding of $2 billion. A report from Fast Company says Generate calls itself a “sustainable infrastructure” company, and can be described as “a modern utility company, where the utility manages everything: solar, energy storage, building automation projects, electric vehicle fleets and charging infrastructure, wastewater and food waste, and nearly two dozen other types of projects.” According to the report, the company partners with around 40 different sustainable technology companies and project developers, providing them with capital to build, say, a solar power plant. CEO Scott Jacobs says, “Once they’re shovel ready, we buy the asset from the developer fully, and then we’re on the hook to operate it for 10, 20, 30 years.” Then it sells the service to customers like retailers, banks, or communities.

Biden set to roll back Trump rule on spotted owls

The U.S. Fish and Wildlife Service is proposing to withdraw a Trump administration rule that cut millions of acres of critical habitat protections for the northern spotted owl. The proposed new rule would reduce the species’ critical habitat protections on about 2% of the 9.6 million acres designated in 2012. The change follows the U.S Interior Department’s delay and review of a Trump administration’s Jan. 15 rollback of 3.4 million acres of designated critical habitat protections for the imperiled species in Washington, Oregon and California. Oregon Public Radio reports the last-minute move by the Trump administration allowed the Fish and Wildlife Service to reopen a public comment period in March, in which the agency received more than 2,000 comments.

Today in wildfires

. . . . As of July 20, the Fire Information for Resource Management System reported seven new large incidents in the U.S., four large fires contained, and 64 large fires uncontained. Active areas continued to be in the Western states. In the Northwest, there were 15 large uncontained fires. In Northern California, 24 new fires were reported, while four large fires remain uncontained. In the Great Basin region, 20 new fires were reported. Almost all these large fires were described by officials as exhibiting extreme fire behavior with crowning, wind-driven runs and running. Structures are threatened and area and road closures are in effect. Across the nation, the National Interagency Coordination Center reports that as of Tuesday morning, more than 1,359,080 acres had burned as a result of the 100 fire incidents currently active. So far this year, more than 34,000 fires have been reported, compared with 27,770 for the same period last year. There’s been a nearly 25% increase in the number of acres burned in the U.S., compared to last year. . . .

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