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Goodhart’s Law tells us that “when a measure becomes a target, it ceases to be a good measure.” The disagreements climate diplomats were having last week highlight why.
Last week, climate negotiators sparred in Bonn, Germany, over a New Collective Quantified Goal on climate finance. The NCQG, as it’s labeled, is a new target for how much money governments must mobilize to meet global climate investment needs consistent with goals set down in the United Nations’ landmark 2015 Paris Agreement. Reaching a consensus on the NCQG is the biggest item on negotiators’ plates between Bonn and COP29, the annual United Nations-led conference on climate change, happening this fall in Baku, Azerbaijan. But, true to Goodhart, the global climate targets negotiators are deadlocked over are not good measurements of progress, let alone ones that developed countries measured up to.
In 2009, at COP15 in Copenhagen, developed countries set a goal of mobilizing $100 billion annually for climate investments in developing countries by 2020. In 2015, as part of the Paris Agreement, the world’s climate diplomats agreed to set an updated goal — the NCQG — before 2025. In the interim, developed countries achieved their original goal, although years later than planned and amidst allegations that some of their grants and loans were merely existing sources of development financing dressed up as climate finance. That there is no fixed definition of the term “climate finance” makes the $100 billion target doubly fuzzy: Upon closer inspection, some spending classified as climate finance doesn’t really seem like it should count, while other spending seems to have circled back to donor country governments, consultants, and nonprofits.
Despite these measurement issues, negotiators at Bonn pressed for an ambitious updated target. There was consensus that the NCQG could not be less than $100 billion annually — but that is where agreement ended. While negotiators from developing countries ― particularly those from African and Asian governments ― called for an NCQG as high as $1.4 trillion annually over the next five years, developed country negotiators refused to commit to a figure, choosing instead to argue over which countries should be expected to pay. Held up over this disagreement, Bonn ended without a resolution even on what a range of possible NCQGs could look like.
Whatever its size, this target means nothing without a plan to deliver it. What’s more, the back-and-forth over the size of the bill and who foots it took up so much time last week that two other long-standing debates were neglected: The first over what type of financing the NCQG should prioritize ― a measurement issue ― and the second about the obstacles (or “disenablers,” as negotiators called them) in the way of achieving that level of financing — a target issue.
As to the type of financing, the share of total official development assistance sent from G7 governments and the European Union to African countries is at its lowest in 50 years, making it possible to conclude, as did an EU negotiator at Bonn, that “public resources alone will not suffice” to meet the NCQG. The growing scale of the climate challenge, weighed against this apparent (if arguably self-imposed) inadequate public spending by developed countries, has prompted policymakers to advocate for greater private-sector involvement in meeting global climate finance targets. The United States in particular has placed heavy emphasis on the need to “mobilize private capital.” This agenda has prompted Global North governments and the World Bank to attract private investors to decarbonization projects in developing countries.
Developing country negotiators and civil society advocates, meanwhile, have long criticized the fact that the majority of the climate financing we know about has come in the form of loans and not grants, and that most of the loans ― some of the ones from the public sector and all of the private loans ― are issued on market-rate rather than “concessional” terms. In other words, all this so-called help places an undue burden on the balance sheets of developing countries, especially as global interest rates stay high.
Some negotiators are looking to incorporate these arguments into the NCQG as a measure of the quality of the financing developing countries receive. And this is where the conversation around the obstacles begins.
One can argue that loans of any kind are better than nothing at all; long-term investments require long-term debt financing. But market-rate loans in the Global South carry prohibitively high interest rates, reflecting the greater risks that private investors think they face when investing. The International Energy Agency confirms that “the cost of capital for a typical solar PV plant in 2021 was between two‐ and three‐times higher in emerging and developing economies than in advanced economies and China.” While policymakers, particularly at the World Bank, are developing tools to “derisk” these investments such that they can be profitable at market interest rates, it’s still not clear that private sector creditors will respond with enthusiasm. Under these conditions, many climate-vulnerable communities are liable to be locked out of capital markets.
Debt, after all, is not inherently bad. High debt-to-GDP ratios don’t mean anything in and of themselves — indeed, taking on debt to finance crucial investments can (and should!) be prosperity-enhancing and increase a country’s future borrowing capacity.
But today’s global economic system is structured in such a way that debt places a needlessly heavy burden on developing countries, contributing to a “crowding out of crucial development spending,” per findings of the UN Development Programme. Almost 40% of developing countries are setting aside over 10% of their governments’ total revenues to cover interest payments; 62% of developing countries’ external public debt is owed to private creditors (again, at market rates). And these figures don’t include the debt that individual firms take on to finance, say, energy infrastructure. Even that requires the governments of developing countries and development banks to derisk low-return projects across much of the Global South, a process which can plant “budgetary time bombs” on those governments’ balance sheets. Where decarbonization is concerned, private balance sheets are also public liabilities.
Developing country governments and firms also face interest rate and foreign exchange shocks, as higher U.S. interest rates and the concomitant threat of currency depreciation strain their abilities to service external debts. The perverse effect is to prioritize hoarding dollars earned through exports as potential shock absorbers rather than channel them toward domestic investment goals. Loans become a millstone around a government’s policy goals, rather than a measurement of its ambitions.
These liquidity risks loom over climate-vulnerable countries. Take Egypt, where this summer is expected to be brutally hot enough to force its government to import more grain and more gas ― putting increased pressure on the already-volatile Egyptian pound ― and to seriously threaten labor productivity. Egypt’s latest Nationally Determined Contribution, its national climate plan, states that it needs approximately $35 billion per year between now and 2030 to meet its climate targets. Yet the International Monetary Fund expects Egypt to spend $50 billion a year on interest payments in that same period, all while Egypt’s recent bailout agreement with the IMF commits to “put debt firmly on a downward path.”
This debt-climate nexus or climate risk doom loop, exemplifies why developing country negotiators and civil society advocates have hesitated to embrace loan-based climate finance. Debt today need not “crowd out” debt-financed climate spending tomorrow. But that’s exactly what’s happening.
So where does that leave us? For all diplomats’ focus on the NCQG target, how they measure it does matter. As it stands, $100 million of climate finance in the form of market-rate loans to developing countries might seriously threaten their debt sustainability. But developed countries, the multilateral development banks, and the International Monetary Fund can change the nature of debt finance. They can commit to making debt easier to bear by offering lower interest rates and extending loan terms. They can issue more of this concessional debt, of course, displacing the panoply of private lenders that currently play in sovereign bond markets. They can reform their lending standards such that they no longer penalize borrowers for carrying high debt-to-GDP ratios when huge debt-financed investment is precisely what staving off climate change requires. And they can set up dollar swap lines to provide developing countries with the resources to manage interest rate and currency value shocks.
These strategies, if fleshed out in practical detail, can sidestep fickle private investors, contribute to an investment-friendly reform of the global macroeconomic architecture, and kickstart a virtuous cycle of green development around the world. That’s the target. Can we measure up to it?
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On environmental justice grants, melting glaciers, and Amazon’s carbon credits
Current conditions: Severe thunderstorms are expected across the Mississippi Valley this weekend • Storm Martinho pushed Portugal’s wind power generation to “historic maximums” • It’s 62 degrees Fahrenheit, cloudy, and very quiet at Heathrow Airport outside London, where a large fire at an electricity substation forced the international travel hub to close.
President Trump invoked emergency powers Thursday to expand production of critical minerals and reduce the nation’s reliance on other countries. The executive order relies on the Defense Production Act, which “grants the president powers to ensure the nation’s defense by expanding and expediting the supply of materials and services from the domestic industrial base.”
Former President Biden invoked the act several times during his term, once to accelerate domestic clean energy production, and another time to boost mining and critical minerals for the nation’s large-capacity battery supply chain. Trump’s order calls for identifying “priority projects” for which permits can be expedited, and directs the Department of the Interior to prioritize mineral production and mining as the “primary land uses” of federal lands that are known to contain minerals.
Critical minerals are used in all kinds of clean tech, including solar panels, EV batteries, and wind turbines. Trump’s executive order doesn’t mention these technologies, but says “transportation, infrastructure, defense capabilities, and the next generation of technology rely upon a secure, predictable, and affordable supply of minerals.”
Anonymous current and former staffers at the Environmental Protection Agency have penned an open letter to the American people, slamming the Trump administration’s attacks on climate grants awarded to nonprofits under the Inflation Reduction Act’s Greenhouse Gas Reduction Fund. The letter, published in Environmental Health News, focuses mostly on the grants that were supposed to go toward environmental justice programs, but have since been frozen under the current administration. For example, Climate United was awarded nearly $7 billion to finance clean energy projects in rural, Tribal, and low-income communities.
“It is a waste of taxpayer dollars for the U.S. government to cancel its agreements with grantees and contractors,” the letter states. “It is fraud for the U.S. government to delay payments for services already received. And it is an abuse of power for the Trump administration to block the IRA laws that were mandated by Congress.”
The lives of 2 billion people, or about a quarter of the human population, are threatened by melting glaciers due to climate change. That’s according to UNESCO’s new World Water Development Report, released to correspond with the UN’s first World Day for Glaciers. “As the world warms, glaciers are melting faster than ever, making the water cycle more unpredictable and extreme,” the report says. “And because of glacial retreat, floods, droughts, landslides, and sea-level rise are intensifying, with devastating consequences for people and nature.” Some key stats about the state of the world’s glaciers:
In case you missed it: Amazon has started selling “high-integrity science-based carbon credits” to its suppliers and business customers, as well as companies that have committed to being net-zero by 2040 in line with Amazon’s Climate Pledge, to help them offset their greenhouse gas emissions.
“The voluntary carbon market has been challenged with issues of transparency, credibility, and the availability of high-quality carbon credits, which has led to skepticism about nature and technological carbon removal as an effective tool to combat climate change,” said Kara Hurst, chief sustainability officer at Amazon. “However, the science is clear: We must halt and reverse deforestation and restore millions of miles of forests to slow the worst effects of climate change. We’re using our size and high vetting standards to help promote additional investments in nature, and we are excited to share this new opportunity with companies who are also committed to the difficult work of decarbonizing their operations.”
The Bureau of Land Management is close to approving the environmental review for a transmission line that would connect to BluEarth Renewables’ Lucky Star wind project, Heatmap’s Jael Holzman reports in The Fight. “This is a huge deal,” she says. “For the last two months it has seemed like nothing wind-related could be approved by the Trump administration. But that may be about to change.”
BLM sent local officials an email March 6 with a draft environmental assessment for the transmission line, which is required for the federal government to approve its right-of-way under the National Environmental Policy Act. According to the draft, the entirety of the wind project is sited on private property and “no longer will require access to BLM-administered land.”
The email suggests this draft environmental assessment may soon be available for public comment. BLM’s web page for the transmission line now states an approval granting right-of-way may come as soon as May. BLM last week did something similar with a transmission line that would go to a solar project proposed entirely on private lands. Holzman wonders: “Could private lands become the workaround du jour under Trump?”
Saudi Aramco, the world’s largest oil producer, this week launched a pilot direct air capture unit capable of removing 12 tons of carbon dioxide per year. In 2023 alone, the company’s Scope 1 and Scope 2 emissions totalled 72.6 million metric tons of carbon dioxide equivalent.
If you live in Illinois or Massachusetts, you may yet get your robust electric vehicle infrastructure.
Robust incentive programs to build out electric vehicle charging stations are alive and well — in Illinois, at least. ComEd, a utility provider for the Chicago area, is pushing forward with $100 million worth of rebates to spur the installation of EV chargers in homes, businesses, and public locations around the Windy City. The program follows up a similar $87 million investment a year ago.
Federal dollars, once the most visible source of financial incentives for EVs and EV infrastructure, are critically endangered. Automakers and EV shoppers fear the Trump administration will attack tax credits for purchasing or leasing EVs. Executive orders have already suspended the $5 billion National Electric Vehicle Infrastructure Formula Program, a.k.a. NEVI, which was set up to funnel money to states to build chargers along heavily trafficked corridors. With federal support frozen, it’s increasingly up to the automakers, utilities, and the states — the ones with EV-friendly regimes, at least — to pick up the slack.
Illinois’ investment has been four years in the making. In 2021, the state established an initiative to have a million EVs on its roads by 2030, and ComEd’s new program is a direct outgrowth. The new $100 million investment includes $53 million in rebates for business and public sector EV fleet purchases, $38 million for upgrades necessary to install public and private Level 2 and Level 3 chargers, stations for non-residential customers, and $9 million to residential customers who buy and install home chargers, with rebates of up to $3,750 per charger.
Massachusetts passed similar, sweeping legislation last November. Its bill was aimed to “accelerate clean energy development, improve energy affordability, create an equitable infrastructure siting process, allow for multistate clean energy procurements, promote non-gas heating, expand access to electric vehicles and create jobs and support workers throughout the energy transition.” Amid that list of hifalutin ambition, the state included something interesting and forward-looking: a pilot program of 100 bidirectional chargers meant to demonstrate the power of vehicle-to-grid, vehicle-to-home, and other two-way charging integrations that could help make the grid of the future more resilient.
Many states, blue ones especially, have had EV charging rebates in places for years. Now, with evaporating federal funding for EVs, they have to take over as the primary benefactor for businesses and residents looking to electrify, as well as a financial level to help states reach their public targets for electrification.
Illinois, for example, saw nearly 29,000 more EVs added to its roads in 2024 than 2023, but that growth rate was actually slower than the previous year, which mirrors the national narrative of EV sales continuing to grow, but more slowly than before. In the time of hostile federal government, the state’s goal of jumping from about 130,000 EVs now to a million in 2030 may be out of reach. But making it more affordable for residents and small businesses to take the leap should send the numbers in the right direction, as will a state-backed attempt to create more public EV chargers.
The private sector is trying to juice charger expansion, too. Federal funding or not, the car companies need a robust nationwide charging network to boost public confidence as they roll out more electric offerings. Ionna — the charging station partnership funded by the likes of Hyundai, BMW, General Motors, Honda, Kia, Mercedes-Benz, Stellantis, and Toyota — is opening new chargers at Sheetz gas stations. It promises to open 1,000 new charging bays this year and 30,000 by 2030.
Hyundai, being the number two EV company in America behind much-maligned Tesla, has plenty at stake with this and similar ventures. No surprise, then, that its spokesperson told Automotive Dive that Ionna doesn’t rely on federal dollars and will press on regardless of what happens in Washington. Regardless of the prevailing winds in D.C., Hyundai/Kia is motivated to support a growing national network to boost the sales of models on the market like the Hyundai Ioniq5 and Kia EV6, as well as the company’s many new EVs in the pipeline. They’re not alone. Mercedes-Benz, for example, is building a small supply of branded high-power charging stations so its EV drivers can refill their batteries in Mercedes luxury.
The fate of the federal NEVI dollars is still up in the air. The clearinghouse on this funding shows a state-by-state patchwork. More than a dozen states have some NEVI-funded chargers operational, but a few have gotten no further than having their plans for fiscal year 2024 approved. Only Rhode Island has fully built out its planned network. It’s possible that monies already allocated will go out, despite the administration’s attempt to kill the program.
In the meantime, Tesla’s Supercharger network is still king of the hill, and with a growing number of its stations now open to EVs from other brands (and a growing number of brands building their new EVs with the Tesla NACS charging port), Superchargers will be the most convenient option for lots of electric drivers on road trips. Unless the alternatives can become far more widespread and reliable, that is.
The increasing state and private focus on building chargers is good for all EV drivers, starting with those who haven’t gone in on an electric car yet and are still worried about range or charger wait times on the road to their destination. It is also, by the way, good news for the growing number of EV folks looking to avoid Elon Musk at all cost.
From Kansas to Brooklyn, the fire is turning battery skeptics into outright opponents.
The symbol of the American battery backlash can be found in the tiny town of Halstead, Kansas.
Angry residents protesting a large storage project proposed by Boston developer Concurrent LLC have begun brandishing flashy yard signs picturing the Moss Landing battery plant blaze, all while freaking out local officials with their intensity. The modern storage project bears little if any resemblance to the Moss Landing facility, which uses older technology,, but that hasn’t calmed down anxious locals or stopped news stations from replaying footage of the blaze in their coverage of the conflict.
The city of Halstead, under pressure from these locals, is now developing a battery storage zoning ordinance – and explicitly saying this will not mean a project “has been formally approved or can be built in the city.” The backlash is now so intense that Halstead’s mayor Dennis Travis has taken to fighting back against criticism on Facebook, writing in a series of posts about individuals in his community “trying to rule by MOB mentality, pushing out false information and intimidating” volunteers working for the city. “I’m exercising MY First Amendment Right and well, if you don’t like it you can kiss my grits,” he wrote. Other posts shared information on the financial benefits of building battery storage and facts to dispel worries about battery fires. “You might want to close your eyes and wish this technology away but that is not going to happen,” another post declared. “Isn’t it better to be able to regulate it in our community?”
What’s happening in Halstead is a sign of a slow-spreading public relations wildfire that’s nudging communities that were already skeptical of battery storage over the edge into outright opposition. We’re not seeing any evidence that communities are transforming from supportive to hostile – but we are seeing new areas that were predisposed to dislike battery storage grow more aggressive and aghast at the idea of new projects.
Heatmap Pro data actually tells the story quite neatly: Halstead is located in Harvey County, a high risk area for developers that already has a restrictive ordinance banning all large-scale solar and wind development. There’s nothing about battery storage on the books yet, but our own opinion poll modeling shows that individuals in this county are more likely to oppose battery storage than renewable energy.
We’re seeing this phenomenon play out elsewhere as well. Take Fannin County, Texas, where residents have begun brandishing the example of Moss Landing to rail against an Engie battery storage project, and our modeling similarly shows an intense hostility to battery projects. The same can be said about Brooklyn, New York, where anti-battery concerns are far higher in our polling forecasts – and opposition to battery storage on the ground is gaining steam.