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With a deal on the global stocktake yet to emerge from Dubai, we asked an expert to fill us in.

This year’s United Nations Climate Change Conference, COP28, has been broadly defined by two facts. The first is that the conference is headed by the CEO of the United Arab Emirates’ state-owned oil company. The second is that this is the year of the first global stocktake, a document that should, in theory, set the world on a path to achieve the goals laid out in the Paris Agreement of 2015.
Perhaps unsurprisingly, that combination has not produced tremendous results. The latest draft of the stocktake dropped language calling for a fossil fuel phase-out. The condemnation was swift: “We will not sign our death certificate,” said the Association of Small Island States in a statement. “We think there are elements in the text that are fully unacceptable,” Spain’s environment minister said.
I was curious: How, exactly, does a global stocktake come to be? To find out, I called up Tom Evans, a policy advisor and climate negotiations specialist at the climate change think tank E3G, who is currently on the ground in Dubai. Our conversation, which has been lightly edited for length and clarity, is below.
Catch me up. How are things going on the ground?
It’s … going along. There’s a lot of discussions at the moment around the text that came out yesterday. Many, many parties are dissatisfied with the level of ambition in that text. It didn’t have the fossil fuel phaseout, it wasn’t strong enough on things like finance or adaptation, so that has triggered this big backlash. It’s all happening behind closed doors at the moment with ministers and politicians talking about the text, and the rest of us are kind of in a black box with regards to what’s going on. But it’s all really on a knife’s edge.
What is happening behind those doors, as best as you can tell?
The process is somewhat unclear. COPs don’t have any strict procedures; the presidency can choose how to do this diplomacy to get to the outcome it needs. At the moment, we’re in the phase of basically bilateral consultations being led by the UAE. The presidency is bringing people together behind the scenes. Everyone’s kind of slowly talking to each other.
What do you mean by bilateral consultations, exactly?
The UAE sitting down with a party — let’s say India, for example — and hearing their concerns and understanding what their red lines are, what they’re looking to change in the text. And then with that knowledge they’ll have another meeting, sitting down with, say, the U.S., having the same conversation and trying to map out where people sit based on these conversations.
They don’t have a big meeting room where everyone is at the table. They haven’t done a plenary yet. Last night they did a heads of delegation meeting, which brought all parties together. It was a closed meeting, and it started at 10 p.m. and finished at about 2 a.m. last night, which we hadn’t seen before.
Of course, at the same time, countries are talking to each other in different configurations. So there are different groups who will come together, such as the regional groups [who might have common goals]. And the U.S., I’m sure, is talking to China and Saudi Arabia.
The UAE has other tools at their disposal — earlier this week they hosted an informal ministerial circle where they talked about the issues together — but at the moment, they’re choosing to do this very closed or bilateral diplomacy, probably because the stakes are high and they need to act sensitively around what this next iteration of text looks like. Because an awful lot hinges upon it.
There must be some real power dynamics at play here. Are there some countries that the UAE is more inclined to listen to than others?
The UNFCCC is weird because some of the times those power dynamics are different from what you might expect. Small island states and other countries have an awful lot of power compared to [the regular UN framework], where they’re not the geopolitical shapers. But in this space, they have much more power because of their moral authority.
This word, “stocktake,” implies a kind of mathematical act. Is there an emissions reckoning happening?
Stocktake is definitely a bad name — we’ve already done a lot of the stock-taking. The past two years had the process of technical dialogues among parties and experts and non-party stakeholders, and we had reports including the IPCC which fed into that. Those conclusions were published back in September, and that report kind of tells us what we already know: Action is growing but inadequate, finance is not there at the scale needed, it’s not going to the right people in the right places at the right time. We think we know what we need to do, we just have to find the ways to do it. How do we commit [to] things here in Dubai that will bend the emissions curve and make sure that actions are implemented on the ground?
Before this COP, I had the impression that the stocktake is going to be some sort of big reckoning of past and future emissions. But it sounds like what’s happening now is similar to how past COP negotiations have gone. Is there something that makes the stocktake stand out from the agreements that were negotiated at previous COPs?
One big difference is that this is the central mechanism of the Paris Agreement, where we take stock and assess how to close gaps to meeting those goals. And that hasn’t happened in a formal way before.
The Paris Agreement was designed to have a stocktake so that we could make sure that our successive action, as the years go by, was ratcheting up, making sure that we’re not just coasting along but really delivering stronger and stronger progress. So that’s an important part of this. We are engaging with the Paris Agreement and saying, “okay, can we make sure it fulfills its goals in that formal way?”
The other part of it is that the stocktake, because it’s had this two-year process, has clearly identified the gaps. No one can deny that we’re not doing enough on finance and that adaptation is massively neglected. We’ve acknowledged that there’s been some progress on emission reductions, but it’s just an incremental push towards what's needed. Those conclusions have a certain weight that we can draw from.
What happens if there is no agreement? Is that an option?
I don’t think that is an option. No agreement would be a failure, a clear sign of an inability of the parties to rise to the challenge of what’s needed. There’s obviously a difficult question about what level of agreement is not good enough, but that’s the reason why the parties are working so hard right now to rescue this — because the deal on the table at the moment was clearly falling below that line. That’s why we saw the backlash.
The UAE certainly will be aware that that is what’s at stake. It’s their presidency, they need to deliver what they set out to do. They need to be able to show the final success. After a year of many pledges and announcements, new money, new initiatives — all of that is important, but it doesn’t count unless you negotiate this final outcome.
And every party has to agree to the final outcome?
It has to be consensus, though what exactly consensus means can be debated. Everyone would have to not object. The weird state of the UNFCCC process means that sometimes there have been things which aren’t necessarily fully agreed 100% but still reached consensus.
Consensus isn’t perfect. It’s a political call, it's not a mathematical number game where you tally up votes. For example, even this year, when the parties agreed [to] the loss and damage fund, the U.S. said in that meeting that they didn’t agree to it. But they said they weren’t in the room when consensus was reached, because the negotiator had left the room temporarily, so an agreement was reached and they approved it here in Dubai.
So there’s ways you can play with the system and survive. There have been instances in the past I’ve heard many years ago where decisions have been gaveled through despite objection because the presidency felt confident that the objections were not sufficient to obstruct the outcome.
This is the first stocktake process. Do you think part of what’s making it so hard is that there is no previous framework?
To an extent we’re creating something new, trying to do this for the first time. But I think also, it’s the politics. We are looking at the hardest issue, and for the first time in years getting on the edge of agreeing [to] something like a fossil fuel phaseout. And that brings up deep challenges for countries who are extremely dependent on fossil fuels. That’s true on all sides — not just producers, but also consumers.
We’re talking about initiating a model for the world which doesn’t have fossils in it. And that’s never been done — even in countries who have decarbonized to a great degree, they have not been able to show how that works at an international level.
So it is a huge ask, and there is no doubt that there can be challenges when trying to do that. And that’s what we’re seeing. We’re seeing the pains of trying to get something that’s useful. We’re no longer negotiating a treaty like we were in Paris. We’re no longer agreeing on a rulebook, which we did for five years up until COP26. We’re now really firmly talking about implementation. What does it mean to deliver the Paris Agreement? What does it mean to actually reduce emissions, not just pledge targets? So obviously it’s going to be a painful conversation, but it’s a difficult and important one.
Is there a misconception or something frustrating about this process that you wish people knew more about?
I think the biggest frustration is that this isn’t about just a technical exercise where you’re like, “oh, we need to phase out fossil fuels, because that's what is needed.” I mean, that’s true. But there’s a deeper question here of “how does the Paris Agreement work?”
The Paris Agreement works on the basis of a deal that if we have finance, if we have cooperation, if we have means to deliver action, [then] we can do more ambitious things, we can raise and accelerate action. That is what is at stake here. So when we’re talking about phasing out fossil fuels, we should also be asking, where’s the financial pathway to do that? When we’re talking about trying to make sure that countries have more adaptation, where is the money on the table to do that? And at the moment, we know it’s a drop in the ocean. These are the contours of the deal that we need to really examine.
And it won’t be all sealed here. It goes on and on until COP30 and after that. But the global stocktake is, I think, like a marriage vow renewal. You need to kind of renew the trust and the faith that that deal, that system’s working. And right now it’s looking like maybe a shaky marriage.
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On ‘precariously low’ oil stockpiles, China’s ammonia milestone, and a PFAS destroyer
Current conditions: The wildfires in France and Europe are slowing, but three firefighters have died and the looming heat wave could bring yet more disaster • New York and New Jersey are facing flash floods as a storm system makes its way across the Northeast United States • Days of thunderstorms are causing floods across Vientiane, Laos’ sprawling capital.
Last month, I toured Commonwealth Fusion Systems’ headquarters in small-town central Massachusetts. The place was abuzz in activity. On the factory floor side, workers were assembling the magnets needed to ultimately form the torus-shaped reactor — think a giant doughnut with an interior that curves like the core of an apple — called the tokamak. On the actual reactor side, SPARC — the prototype that CFS expects will make history next year as the first private enterprise and only tokamak to ever generate more energy that it took to start the fusion reaction — was starting to look like a functional machine from my view on a second-story walkway overlooking the sterile assembly room. The old joke that fusion is the energy source of tomorrow — and always will be — certainly didn’t ring as funny now. I’ll tell you who isn’t laughing: All the new investors that just poured another $1 billion into CFS. The company announced its latest funding round early this morning, which brings the startup’s total fundraising since its launch as a spinout from the Massachusetts Institute of Technology in 2018 to $4 billion. CFS now accounts for 30% of all the private capital that has flowed into fusion. What distinguishes this round, my colleague Katie Brigham wrote, is that the money is coming from a bunch of institutional investors, such as pension funds and sovereign wealth funds, rather than venture capitalists. On a call with reporters this week, CFS’s newly-named chief financial officer, Lorence Kim, said it’s the first-time institutional investors comprised the majority of the new funding. When I asked the company’s spokeswoman for a percentage estimate breaking down the new versus old investors in this round, she declined to comment. Kim cautioned that the funding isn’t the kind of capital you raise before launching on a stock market. But his hire is notable. The former Goldman Sachs banker famously helped take the pharmaceutical giant Moderna public and held the top financial role through the start of the Covid-19 pandemic.
Meanwhile, a federal Superfund site at a facility in Kentucky once used to enrich uranium for atomic bombs is being transformed into a data center. On Wednesday, the Department of Energy announced a deal between investment giant Brookfield, utility behemoth NextEra Energy, and three local power providers to redevelop portions of the Paducah site into a $100 billion data center campus. “By transforming former DOE sites into engines of innovation and economic growth, we can revitalize communities with increased tax revenue and thousands of jobs, while also strengthening America’s energy security,” Secretary of Energy Chris Wright said in a press release.
The Federal Reserve held the country’s benchmark interest rate steady at Wednesday’s meeting of the U.S. central bank’s top brass. But three bank presidents voted to increase rates as renewed fighting in Iran sent energy prices upward. The dissent “underscored officials’ fraying patience with looking past another price shock on the heels of tariff-related increases last year and with robust demand stemming from the artificial-intelligence buildout,” The Wall Street Journal reported. That is, of course, bad news for renewables and other clean energy developers who rely on cheap upfront money to build, as my colleague Matthew Zeitlin has written.
But there are potentially bigger problems afoot for American energy consumers. U.S. crude stockpiles fell sharply last week as American refineries ramped up production to seize on surging fuel prices as fighting erupted in Iran. The stocks have now reached “precariously low” levels, analysts told the Financial Times, meaning there’s far less cushion if the war worsens the supply shock.
Last month, the energy team at the liberal policy shop Third Way assembled 100 swing voters from across the country to talk about the data centers that poll after poll shows are becoming less and less popular, to put it mildly. The conclusion of the discussions was this: “America’s opposition to data centers has less to do with their feelings about artificial intelligence and more to do with their anger and distrust of large corporations and government.” The findings, shared with me exclusively in advance, showed that most participants were open to a new data center if they believed it would come with tangible benefits for their communities. While some investors, such as “Shark Tank” star Kevin O’Leary, have tried to present those offerings, “the trust isn’t there.” While Emily Becker, the director of Communications for Third Way’s Climate and Energy Program, told me she was “not surprised by how much opposition there was, what was heartening is people understood that benefits were possible. They just didn’t think they would receive them.”
Speaking of data centers and the public trust: NV Energy has accused one of the biggest developers of data centers in Nevada of attempting to illegally bypass state regulators to determine through private arbitration how and when the Berkshire Hathaway-owned utility should provide power to its operations. The lawsuit, filed Friday in Washoe County’s Second Judicial District Court, alleges that the developer, Tract, is trying to skirt the usual process by which the state Public Utilities Commission determines what share of the utility’s electricity should go to the large power user. Tract, according to the complaint, “wants NV Energy to reserve and provide enormous amounts of power for Tract's private development while shifting the infrastructure and energy costs to Nevada families, small businesses, and existing customers who did not cause them.” Sorting out those questions through arbitration would help to “keep these issues hidden” from state regulators and the public, NV Energy said, according to The Nevada Independent.
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When the Biden administration attempted to overhaul regulations on electrical transformers to make the key grid components more efficient, the proposal drew fierce bipartisan pushback amid a years-long nationwide shortage of the equipment. Ultimately, the Biden administration backed down and changed the proposal after receiving public comments. That would have seemed to provide some certainty for factories. But just two years after the final rule won acclaim from across the industry, the Trump administration is now considering revising the requirements for rules set to take effect in 2029. “We’re not aware of anyone asking for this,” Andrew deLaski, executive director of the Appliance Standards Awareness Project, told Utility Dive. The group supported the 2024 transformer rule and other stricter efficiency requirements DOE finalized during the Biden administration.
China has signaled it’s planning to take on what Bloomberg described as a bigger role in steering global negotiations over climate change. The 15th five-year plan published Monday by the Ministry of Ecology and Environment and other key agencies outlines how Beijing “will constructively lead the multilateral governance process to address climate change” and states that “China’s influence, guiding capacity, shaping power, and moral appeal in global climate governance will be significantly enhanced” through the end of the decade. Beijing is already looking to increase how much renewable energy it consumes, as I told you last week.
As you may recall, China is going all in on figuring out how to make green hydrogen work, especially now that the People’s Republic is throwing everything at the wall to diversify its domestic supply of fuels as the Iran War chokes off its regular supply of hydrocarbons. One of the trickier questions with green hydrogen is how to ship the world’s small molecules without leaks. A popular solution is to convert the hydrogen into green ammonia. On Tuesday, SPIC Green Energy announced the successful loading of 3,750 metric tons of green ammonia produced in Jilin Province onto a vessel at the Lianyungang Port in Jiangsu Province and shipped to South Korea. “The shipment represents the world’s largest single-batch delivery of green ammonia,” analyst Jian Wu wrote in his China Hydrogen Bulletin newsletter. “It marks China’s transition from technical demonstration to large-scale international commercial delivery.”
A company promising to put an expiration date on so-called forever chemicals just raised a bunch of money to bring its technology to market. Claros Technologies is developing a proprietary system that can break down the per- and polyfluoroalkyl substances, or PFAS, contaminating millions of Americans’ drinking water systems. This week, the startup closed a $55 million Series B financing round. “Over the past year, Claros has crossed the threshold from breakthrough technology to successful commercial reality,” CEO Michelle Bellanca said in a statement.
Risk-averse but deep-pocked institutional investors join the party.
When the Fusion Industry Association surveyed the sector earlier this month, it found that the industry’s 56 active companies had collectively raised more than $14.2 billion over the past five years. But an ever-larger share of that money is ending up in the hands of one startup: Commonwealth Fusion Systems.
With its latest $1 billion funding round, announced today, the MIT spinout now accounts for nearly 30% of all capital in the industry. The new financing, led by a wave of institutional investors entering the sector for the first time, will support construction of the company’s first commercial power plant in Chesterfield County, Virginia, which CEO Bob Mumgaard says is on track to come online in the early 2030s.
In a media briefing, Mumgaard noted that this latest raise marks “the largest single funding round among fusion energy companies since our last large round of $1.8 billion in 2021.” It brings the total capital raised by CFS to an even $4 billion as the company races to complete construction of SPARC, its demo reactor. If all goes according to plan, it should begin operating sometime next year, proving out the physics and engineering approach underpinning ARC, the planned commercial plant.
The new financing deviates from the typical venture capital round, as it brings in a broad but unnamed mix of “large pension funds, sovereign wealth funds, infrastructure funds doing project finance, and industrial corporates.” These risk-averse investors would typically steer clear of expensive, first-of-a-kind facilities, demonstrating the degree to which CFS has succeeded in building confidence in an industry long critiqued for overpromising and underdelivering.
The company credits the trust it built to its extensive peer-reviewed research as well as its decision to build a tokamak — widely regarded as the most mature fusion reactor design. “I don’t think there’s any other company that’s been as transparent and open with their physics and how it actually works,” Katie Rae, CEO and managing partner at Engine Ventures, told me. Rae has participated in every one of CFS’s funding rounds, and while she says her firm has evaluated virtually every startup in the sector, the company remains its only fusion investment.
But even flush with institutional capital, Mumgaard is clear that the company will need billions more to fully finance ARC and the numerous reactors to follow. It’s unclear where exactly that money will come from, though he’s pushing for government involvement. Alongside the Fusion Industry Association, Mumgaard is advocating for a one-time, roughly $10 billion federal infusion of cash into the broader industry to expand public-private partnerships, build shared research infrastructure, and help finance first-of-a-kind plants in an effort to keep pace with China’s rapidly growing fusion program.
According to reporting from Politico, a Department of Energy official told CFS and other fusion companies that such a level of federal funding is “unrealistic in this environment.” But though insiders argue it’s what the industry needs to scale, Rae says CFS doesn’t depend on it. “I think it is the right kind of investment to make, but we didn’t count on it from an investor perspective,” she told me.
One obvious alternative is the public markets. The IPO window for climate tech has reopened, with geothermal giant Fervo and nuclear fission startup X-energy both completing successful public offerings in recent months. SPACs have also made a comeback, as numerous nuclear companies are opting for this faster, though riskier, path to the public markets. But CFS’s newly appointed CFO, Lorence Kim, said during the briefing that this latest round proves “that the private markets have a lot of capital to deploy toward our mission.” Whether an IPO is in the company’s near future remains an open question, though he cautioned against interpreting his hiring as any indication of “IPO prep in a specific way.”
For what it’s worth though, Kim has taken another high-profile, pre-revenue startup public before: Moderna. As CFO from 2014 to 2020, he helped the company scale its mRNA platform and lead its blockbuster $600 million IPO in late 2018 — the largest ever in the biotech industry at the time. Notably, this all happened before Moderna had an approved product or the Covid pandemic made its signature vaccine a household name, similar to where Commonwealth finds itself today.
“Moderna was in this moment in time where the science worked, and the strategy was focused on execution and scale and deploying capital in a way that could enable real impact on the world,” Kim explained. CFS is now at the same juncture, he said. “And so in the same way that Moderna industrialized mRNA and made it inevitable and made it ubiquitous, it was really clear to me that CFS could do the same for fusion.”
Of course, CFS is not alone in its confidence — other fusion companies are equally bullish on their own approach. Take Inertia Enterprises, a Lawrence Livermore National Laboratory spinout, which last week unveiled its own commercial roadmap for a laser-driven fusion reactor. The company emphasized it’s the only one to have definitively demonstrated the viability of its underlying physics in a real-world experiment, rather than through theoretical work or simulations.
Or take Helion, which has raised $1.5 billion and secured a highly ambitious power purchase agreement with Microsoft to supply electricity to the tech giant by 2028. Or Pacific Fusion, which netted a staggering $900 million Series A to be doled out in milestone-based tranches. There are dozens of others — many with hundreds of millions in funding — pursuing a range of approaches that some of the field’s brightest minds consider technically feasible.
But when I mused to Rae about how exciting it is that institutional investors now appear willing to back an industry once viewed as bordering on science fiction, she was quick to correct me.
“They’re willing to bet on Commonwealth Fusion — that’s what you mean.”
At least one hyperscaler’s big bets seem to be paying off.
This is an edition of Heatmap Daily, an evening review of the day’s news written by our executive editor. Sign up for it here.
Good evening. Let’s start with the news. Meta and Microsoft released their most recent quarterly earnings this evening, and Wall Street was watching to figure out if their enormous AI spending plans are paying off. We were watching because those proposals are shaping one of the most important energy stories today: the data center boom and the sharp return of electricity demand.
The returns were … mixed. Meta missed analysts’ estimates, and its profit fell 14% from the same quarter a year earlier. It increased the lower bound of how much it plans to spend on capital expenditures such as data centers this year, from $125 billion to $130 billion, but left the upper bound of $145 billion unchanged.
Microsoft, meanwhile, said its AI investments are starting to pay off. Revenue at its cloud business, which uses its data center space, increased by 43%, more than analysts expected. It spent $41 billion on capital expenses in the three months ending in June.
Meta’s stock was down 7% in after-hours trading, while Microsoft is up 8%. When Heatmap surveyed climate insiders last year, they ranked Microsoft as among the most decarbonization-friendly hyperscaler and Meta as among the worst.
Permitting odds up — thanks to Shift Key?
I do not regularly follow such things, but this afternoon I was told that the Kalshi market for “Will permitting reform become law this year?” surged to 77% today after trading for days around 50%:
I have no idea why it budged today, but perhaps what moved the market was our new episode of the Shift Key podcast (Apple, Spotify). On today’s show, I spoke with Daniel Palken, a former Capitol Hill policy staffer now at Arnold Ventures, about the current state of permitting reform negotiations in Congress. While we don’t know the exact shape of a deal yet, permitting reform is likely to be the biggest new policy for clean energy that we could get by the end of the year.
Daniel is a fantastic guide to the negotiations, and if you’re curious about the policy at all, I recommend that you listen. Here are few of my takeaways from the conversation:
1. A permitting reform deal will probably have six buckets.
They are (1) changes to the National Environmental Policy Act and the judicial review process that environmental studies face after completion; (2) reforms to the transmission process; (3) changes to the Clean Water Act; (4) a deal to make it harder for presidents to yank permits from approved projects; (5) changes to the National Historic Preservation Act, and (6) “everything else,” a grab bag of smaller fixes including to geothermal energy.
2. Wonky committee politics are shaping the deal.
The National Historic Preservation Act, for instance, is an archeological law that hasn’t been in the mix for previous reform proposals. It’s up for discussion now because Senator Mike Lee of Utah chairs the Senate Energy and Natural Resources Committee — and the NHPA is the major environmental bill under his jurisdiction. Likewise, observers think that a permitting deal has a much better shot of passing during this Congress (as compared to next year) because of an expected series of changes to committee chairs.
3. It’s way, way better to hook data centers to the power grid than run them off behind-the-meter power plants — even if they run off 100% natural gas.
Any permitting reform proposal will seek to expand the transmission system. That could have big benefits for the emissions intensity of data centers. Why? I’ll let Daniel explain:
If you look at the data centers that are hooking up off grid — when they’re not using repurposed jet engines, they’re using 20% thermally efficient gas plants. Whereas if you’re hooked up to the grid, there’s really two types of gas plants that live on the grid. There’s like 60% efficient combined-cycle gas turbines, which are most of the gas power that’s generated, and then there’s peaker [plants], which have low efficiency, but are run at capacity factors of like 5% — so from an emissions perspective, they don’t matter all that much.
So even if solar and wind didn’t exist at all, and nuclear didn’t exist, and hydro didn’t exist, it would still be a much, much cleaner option [to connect data centers to the power grid]. Like we’re talking factors of three in efficiency to connect your data center to the grid if it was purely powered by gas, which is, I think, an important point to understand.
I thought that was an interesting point, and while I’d seen some of those ideas in isolation, I’d never seen them laid out in one place. (And even if grid-scale gas plants are much more efficient than behind-the-meter plants, it’s still even better to power data centers with solar, batteries, and other clean firm power plants — which is also easier when they’re hooked up to the grid.)
I’ll stop glossing the episode and just link to it one more time. Thanks for reading.