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Can capitalism solve climate change? Wrong question, argues the author and journalist Akshat Rathi: In fact, you can’t solve climate change without capitalism. Look around the world, as Rathi does in his new book Climate Capitalism, and he says you’ll find companies and leaders who are proving that cutting carbon emissions is not just possible, but also profitable.
The venture capitalist Sophie Purdom, the founder of Planeteer Capital, spends her days looking for those profitable climate companies. She says that a newer, smarter generation of climate startups is on the way.
In this week’s episode, recorded earlier this month live at Princeton University, Rob and Jesse host a special in-person conversation with Rathi and Purdom. They talk about the rise of Chinese EVs, what interest rates mean for the energy transition, and the proper role of policy in decarbonizing. Shift Key is hosted by Robinson Meyer, executive editor of Heatmap, and Jesse Jenkins, a Princeton professor of energy systems engineering.
Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, or wherever you get your podcasts.
You can also add the show’s RSS feed to your podcast app to follow us directly.
Here is an excerpt from our conversation:
Robinson Meyer: I guess a question I’d have, maybe, for both of you is, how much of this is a China story? How much of the amount of progress that we’ve been able to do is actually because of Chinese industrial policies — the sheer scale of the Chinese market and the different incentives that exist on the demand side there to bring down the cost of solar, or batteries, or any of these technologies that are now the main engines of decarbonization?
Sophie Purdom: I think so much about the supply side of the market, right? Those solutions and the innovation, which then kind of ideally ports over, if you succeed, into deployment, which has its own set of challenges and concerns and capital levers and policy integrations. I’d argue that the U. S. overall sits further on the supply versus demand side, relative to a global positioning, and that China’s been playing the demand side of the game much better.
Akshat Rathi: The beauty of wanting to do this book was, to me, watching these lessons. So if you look at the solar story: invented in America; really scaled up in Europe, when Germany and Spain were providing a ton of subsidies for solar manufacturers to put rooftop solar in the early 2000s; and then really scaled up in China when they made a ton more capital available and just flooded the market, so to speak.
Take the electric vehicle story, a very different one because the new energy vehicle policy that made China the biggest maker and consumer — and now exporter — of electric cars actually takes inspiration from California’s zero emissions policy. It’s a vehicle mandate, right? So you have this policy that kind of worked in one state, forced the rest of America to think about it, but China just applied it nationwide and ran with it. So you can apply lessons from one country to another and have policies — one of those beautiful things, which, it can translate if you can tweak it to work in that political economy where it needs to operate.
Jesse Jenkins: Let’s talk a little bit more about the particular form of climate capitalism with Chinese characteristics, how this sort of worked out. There’s a couple of case studies in the book of CATL and BYD and how they have come about. One of the things I want to underscore is, we’ve talked about how American-centric we often are. We sort of think, well, we got to drive all of this. But China increasingly is the world’s biggest market for all of these solutions, right? For EVs, for solar PV. They’re also, in many cases, the world’s largest manufacturer. And the scales are just staggering.
Now, I mean, we in the U.S. deployed just shy of 40 gigawatts of solar last year, something like 36 to 38 gigawatts. China deployed 280 gigawatts. More than half of the global market for solar was in China last year. So it’s not ... They started off selling to Spain and Germany, but now, their domestic market is enormous. You can tell a very similar story about EVs, where more than half of the market for EVs is in China — increasingly, more than half of the manufacturing, and now, rapidly, exports too. So what is the flavor of the capitalism story there?
Because many of these companies are state-owned enterprises, at least partially, there’s a strong hand of industrial policy guiding where investment occurs and making it cheaper, and giving free land, and all kinds of different things there. But of course, at the end of the day, there is a lot of ... it is in many ways capitalism. There’s a lot of financial motivation that has led these companies to scale and grow.
This episode of Shift Key is sponsored by…
KORE Power provides the commercial, industrial, and utility markets with functional solutions that advance the clean energy transition worldwide. KORE Power's technology and manufacturing capabilities provide direct access to next generation battery cells, energy storage systems that scale to grid+, EV power & infrastructure, and intuitive asset management to unlock energy strategies across a myriad of applications. Explore more at korepower.com.
Watershed's climate data engine helps companies measure and reduce their emissions, turning the data they already have into an audit-ready carbon footprint backed by the latest climate science. Get the sustainability data you need in weeks, not months. Learn more at watershed.com.
Music for Shift Key is by Adam Kromelow.
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Did a battery plant disaster in California spark a PR crisis on the East Coast?
Battery fire fears are fomenting a storage backlash in New York City – and it risks turning into fresh PR hell for the industry.
Aggrieved neighbors, anti-BESS activists, and Republican politicians are galvanizing more opposition to battery storage in pockets of the five boroughs where development is actually happening, capturing rapt attention from other residents as well as members of the media. In Staten Island, a petition against a NineDot Energy battery project has received more than 1,300 signatures in a little over two months. Two weeks ago, advocates – backed by representatives of local politicians including Rep. Nicole Mallitokis – swarmed a public meeting on the project, getting a local community board to vote unanimously against the project.
According to Heatmap Pro’s proprietary modeling of local opinion around battery storage, there are likely twice as many strong opponents than strong supporters in the area:
Heatmap Pro
Yesterday, leaders in the Queens community of Hempstead enacted a year-long ban on BESS for at least a year after GOP Rep. Anthony D’Esposito, other local politicians, and a slew of aggrieved residents testified in favor of a moratorium. The day before, officials in the Long Island town of Southampton said at a public meeting they were ready to extend their battery storage ban until they enshrined a more restrictive development code – even as many energy companies testified against doing so, including NineDot and solar plus storage developer Key Capture Energy. Yonkers also recently extended its own battery moratorium.
This flurry of activity follows the Moss Landing battery plant fire in California, a rather exceptional event caused by tech that was extremely old and a battery chemistry that is no longer popular in the sector. But opponents of battery storage don’t care – they’re telling their friends to stop the community from becoming the next Moss Landing. The longer this goes on without a fulsome, strident response from the industry, the more communities may rally against them. Making matters even worse, as I explained in The Fight earlier this year, we’re seeing battery fire concerns impact solar projects too.
“This is a huge problem for solar. If [fires] start regularly happening, communities are going to say hey, you can’t put that there,” Derek Chase, CEO of battery fire smoke detection tech company OnSight Technologies, told me at Intersolar this week. “It’s going to be really detrimental.”
I’ve long worried New York City in particular may be a powder keg for the battery storage sector given its omnipresence as a popular media environment. If it happens in New York, the rest of the world learns about it.
I feel like the power of the New York media environment is not lost on Staten Island borough president Vito Fossella, a de facto leader of the anti-BESS movement in the boroughs. Last fall I interviewed Fossella, whose rhetorical strategy often leans on painting Staten Island as an overburdened community. (At least 13 battery storage projects have been in the works in Staten Island according to recent reporting. Fossella claims that is far more than any amount proposed elsewhere in the city.) He often points to battery blazes that happen elsewhere in the country, as well as fears about lithium-ion scooters that have caught fire. His goal is to enact very large setback distance requirements for battery storage, at a minimum.
“You can still put them throughout the city but you can’t put them next to people’s homes – what happens if one of these goes on fire next to a gas station,” he told me at the time, chalking the wider city government’s reluctance to capitulate on batteries to a “political problem.”
Well, I’m going to hold my breath for the real political problem in waiting – the inevitable backlash that happens when Mallitokis, D’Esposito, and others take this fight to Congress and the national stage. I bet that’s probably why American Clean Power just sent me a notice for a press briefing on battery safety next week …
And more of the week’s top conflicts around renewable energy.
1. Queen Anne’s County, Maryland – They really don’t want you to sign a solar lease out in the rural parts of this otherwise very pro-renewables state.
2. Logan County, Ohio – Staff for the Ohio Power Siting Board have recommended it reject Open Road Renewables’ Grange Solar agrivoltaics project.
3. Bandera County, Texas – On a slightly brighter note for solar, it appears that Pine Gate Renewables’ Rio Lago solar project might just be safe from county restrictions.
Here’s what else we’re watching…
In Illinois, Armoracia Solar is struggling to get necessary permits from Madison County.
In Kentucky, the mayor of Lexington is getting into a public spat with East Kentucky Power Cooperative over solar.
In Michigan, Livingston County is now backing the legal challenge to Michigan’s state permitting primacy law.
On the week’s top news around renewable energy policy.
1. IRA funding freeze update – Money is starting to get out the door, finally: the EPA unfroze most of its climate grant funding it had paused after Trump entered office.
2. Scalpel vs. sledgehammer – House Speaker Mike Johnson signaled Republicans in Congress may take a broader approach to repealing the Inflation Reduction Act than previously expected in tax talks.
3. Endangerment in danger – The EPA is reportedly urging the White House to back reversing its 2009 “endangerment” finding on air pollutants and climate change, a linchpin in the agency’s overall CO2 and climate regulatory scheme.