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For the first time in four years, drought is nowhere to be found.
The 2020s got off to a parched, smoky start in the West. But after three years of unrelenting drought, 2023 brought the region some relief.
Thanks to a very snowy winter followed by a very rainy spring, the worst of the Western drought receded rapidly in the early months of this year, data from the U.S. Drought Monitor shows. The extent bottomed out in the early summer, when only one-sixth of the West was experiencing any level of drought at all. It’s crept upward since then to about 45% of the region, but still — that’s the lowest drought level the contiguous Western states have seen at this time of year since 2019.
Most remarkable, in some ways, has been California’s transformation. After years with far too little precipitation, in 2023 California often received far too much. A spate of atmospheric rivers early in the year dumped inches of rain on its lower elevations and feet of snow in its mountains. In April, Hurricane Hilary smashed rainfall records across the southern part of the state.
Two years ago this week, 100% of California was drought-stricken; early this fall, the last patches disappeared (though a small but declining percentage of the state is still considered “abnormally dry”). This is the first time drought has been absent from California since 2019. The most recent time before that was 2011. Before that, it was 2006.
Meanwhile, the uptick in Western drought since summer has been most severe in Arizona and New Mexico, where the vast majority of places are drier than usual and conditions in some areas are becoming more severe. Temperatures in Phoenix rose above 110 degrees Fahrenheit on a record 55 different days between June and September, including an historic 31-day streak that baked the city for almost all of July, the Arizona Republic reported. While the wet winter replenished some of the Colorado River’s dwindling water supply, the temporary boost wasn’t enough to avert imminent cutbacks among the Southwestern states that depend on it.
This precipitation rebound won’t last, of course. The above-average mountain snowpack that piled up from heavy winter snows and kept streams flowing through the spring and into the summer is long gone now. And the decline this year in infernos terrorizing the West is almost certainly a blip in the trend toward ever more devastating fire years, The Washington Post reported last week. If historic patterns hold true, there might not be another fire season this quiet for decades.
“We have just had a respite,” Tonya Graham, the mayor of Ashland, Ore., told the Post. “We have had a little bit of breathing space in this trajectory that is taking us toward higher wildfire and smoke risk and more extreme temperatures.”
But that rest doesn’t look to be over for everyone just yet. Snowpack is already starting to accumulate again. And the National Weather Service forecasts that at least in California and neighboring states, there’s a good chance precipitation will stay higher than normal through the winter.
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Add it to the evidence that China’s greenhouse gas emissions may be peaking, if they haven’t already.
Exactly where China is in its energy transition remains somewhat fuzzy. Has the world’s largest emitter of greenhouse gases already hit peak emissions? Will it in 2025? That remains to be seen. But its import data for this year suggests an economy that’s in a rapid transition.
According to government trade data, in the first fourth months of this year, China imported $12.1 billion of coal, $100.4 billion of crude oil, and $18 billion of natural gas. In terms of value, that’s a 27% year over year decline in coal, a 8.5% decline in oil, and a 15.7% decline in natural gas. In terms of volume, it was a 5.3% decline, a slight 0.5% increase, and a 9.2% decline, respectively.
“Fossil fuel demand still trends down,” Lauri Myllyvirta, the co-founder of the Centre for Research on Energy and Clean Air, wrote on X in response to the news.
Morgan Stanley analysts predicted Friday in a note to clients that this “weak downstream demand” for coal in China would “continue to hinder coal import volume.”
Another piece of China’s emissions and coal usage puzzle came from Indonesia, which is a major coal exporter. Citing data from trade data service Kpler, Reuters reported Friday that Indonesia’s thermal coal exports “have dropped to their lowest in three years” thanks to “weak demand in China and India,” the world’s two biggest coal importers. Indonesia’s thermal coal exports dropped 12% annually to 150 million tons in the first third of the year, Reuters reported.
China’s official goal is to hit peak emissions by 2030 and reach “carbon neutrality” by 2060. The country’s electricity grid is largely fueled by coal (with hydropower coming in at number two), as is its prolific production of steel and cement, which is energy and, specifically, coal-intensive. For a few years in the 2010s, more cement was poured in China than in the whole 20th century in the United States. China also accounts for about half of the world’s steel production.
At the same time, China’s electricity demand growth is being largely met by renewables, implying that China can expand its economy without its economy-wide, annual emissions going up. This is in part due to a massive deployment of renewables. In 2023, China installed enough non-carbon-emitting electricity generation to meet the total electricity demand of all of France.
China’s productive capacity has shifted in a way that’s less carbon intensive, experts on the Chinese energy system and economy have told Heatmap. The economy isshifting more toward manufacturing and away from the steel-and-cement intensive breakneck urbanization of the past few decades, thanks to a dramatically slowing homebuilding sector.
Chinese urban residential construction was using almost 300 million tons of steel per year at its peak in 2019, according to research by the Reserve Bank of Australia, about a third of the country’s total steel usage. (Steel consumption for residential construction would fall by about half by 2023.) By contrast, the whole United States economy consumes less than 100 million tons of steel per year.
To the extent the overall Chinese economy slows down due to the trade war with the United States, coal usage — and thus greenhouse gas emissions — would slow as well. Although that hasn’t happened yet — China also released export data on Friday that showed sustained growth, in spite of the tariff barriers thrown up by the Trump administration.
The nonprofit laid off 36 employees, or 28% of its headcount.
The Trump administration’s funding freeze has hit the leading electrification nonprofit Rewiring America, which announced Thursday that it will be cutting its workforce by 28%, or 36 employees. In a letter to the team, the organization’s cofounder and CEO Ari Matusiak placed the blame squarely on the Trump administration’s attempts to claw back billions in funding allocated through the Greenhouse Gas Reduction Fund.
“The volatility we face is not something we created: it is being directed at us,” Matusiak wrote in his public letter to employees. Along with a group of four other housing, climate, and community organizations, collectively known as Power Forward Communities, Rewiring America was the recipient of a $2 billion GGRF grant last April to help decarbonize American homes.
Now, the future of that funding is being held up in court. GGRF funds have been frozen since mid-February as Lee Zeldin’s Environmental Protection Agency has tried to rescind $20 billion of the program’s $27 billion total funding, an effort that a federal judge blocked in March. While that judge, Tanya S. Chutkan, called the EPA’s actions “arbitrary and capricious,” for now the money remains locked up in a Citibank account. This has wreaked havoc on organizations such as Rewiring America, which structured projects and staffing decisions around the grants.
“Since February, we have been unable to access our competitively and lawfully awarded grant dollars,” Matusiak wrote in a LinkedIn post on Thursday. “We have been the subject of baseless and defamatory attacks. We are facing purposeful volatility designed to prevent us from fulfilling our obligations and from delivering lower energy costs and cheaper electricity to millions of American households across the country.”
Matusiak wrote that while “Rewiring America is not going anywhere,” the organization is planning to address said volatility by tightening its focus on working with states to lower electricity costs, building a digital marketplace for households to access electric upgrades, and courting investment from third parties such as hyperscale cloud service providers, utilities, and manufacturers. Matusiak also said Rewiring America will be restructured “into a tighter formation,” such that it can continue to operate even if the GGRF funding never comes through.
Power Forward Communities is also continuing to fight for its money in court. Right there with it are the Climate United Fund and the Coalition for Green Capital, which were awarded nearly $7 billion and $5 billion, respectively, through the GGRF.
What specific teams within Rewiring America are being hit by these layoffs isn’t yet clear, though presumably everyone let go has already been notified. As the announcement went live Thursday afternoon, it stated that employees “will receive an email within the next few minutes informing you of whether your role has been impacted.”
“These are volatile and challenging times,” Matusiak wrote on LinkedIn. “It remains on all of us to create a better world we can all share. More so than ever.”
The company managed to put a positive spin on tariffs.
The residential solar company Sunrun is, like much of the rest of the clean energy business, getting hit by tariffs. The company told investors in its first quarter earnings report Tuesday that about half its supply of solar modules comes from overseas, and thus is subject to import taxes. It’s trying to secure more modules domestically “as availability increases,” Sunrun said, but “costs are higher and availability limited near-term.”
“We do not directly import any solar equipment from China, although producers in China are important for various upstream components used by our suppliers,” Sunrun chief executive Mary Powell said on the call, indicating that having an entirely-China-free supply chain is likely impossible in the renewable energy industry.
Hardware makes up about a third of the company’s costs, according to Powell. “This cost will increase from tariffs,” she said, although some advance purchasing done before the end of last year will help mitigate that. All told, tariffs could lower the company’s cash generation by $100 million to $200 million, chief financial officer Danny Abajian said.
But — and here’s where things get interesting — the company also offered a positive spin on tariffs.
In a slide presentation to investors, the company said that “sustained, severe tariffs may drive the country to a recession.” Sounds bad, right?
But no, not for Sunrun. A recession could mean “lower long term interest rates,” which, since the company relies heavily on securitizing solar leases and benefits from lower interest rates, could round in the company’s favor.
In its annual report released in February, the company mentioned that “higher rates increase our cost of capital and decrease the amount of capital available to us to finance the deployment of new solar energy systems.” On Wednesday, the company estimated that a 10% tariff, which is the baseline rate in the Trump “Liberation Day” tariffs, could be offset with a half percentage point decline in the company’s cost of capital, although it didn’t provide any further details behind the calculation.
Even in the absence of interest rate relief, a recession could still be okay for Sunrun.
“Historically, recessions have driven more demand for our products,” the company said in its presentation, arguing that because their solar systems offer savings compared to utility rates, they become more attractive when households get more money conscious.
Sunrun shares are up almost 10% today, as the company showed more growth than expected.
For what it’s worth, the much-ballyhooed decline in long-term interest rates as a result of Trump’s tariffs hasn’t actually happened, at least not yet. The Federal Reserve on Wednesday decided to keep the federal funds rate at 4.5%, the third time in a row the board of governors have chosen to maintain the status quo. The yield on 10-year treasuries, often used as a benchmark for interest rates, is up slightly since “Liberation Day” on April 2 and sits today at 4.34%, compared to 4.19% before Trump’s tariffs announcements.