Friday, January 3, 2025

What to watch in climate this year

Plus, banks quit a major climate group |
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Bloomberg
Siobhan Wagner for Green Daily

With many of us back at work and ready to start a new year, today's newsletter looks at how energy markets, consumer spending and diplomacy will shape the future of the planet in 2025. You can find our full list of predictions on Bloomberg.com.

Also, we're keeping up with an ongoing story on the Net-Zero Banking Alliance, a major climate-banking group that has seen a series of defections over the past week. For unlimited access to climate and energy news, please subscribe

What to watch in 2025

By Siobhan Wagner

From record solar installations to rising electric vehicle sales, the world is in many ways ramping up the fight against global warming. 

Yet there are coal-black swans waiting to disrupt the green transition this year. From the US to Japan, power demand is expected to significantly increase as data centers demand more electricity for artificial intelligence. This is forcing some utilities to rethink the phase-out dates of their fossil-fuel power stations. (It's also causing nuclear energy to have a revival too.) 

All of this is happening as President-elect Donald Trump prepares to take office. Trump has already promised to end what he calls Washington's "green new scam." On day one he's pledged to scrap offshore wind projects, which would be another blow to an industry plagued by bottlenecks. He's also vowed to abandon the Paris Agreement, which calls for nations to limit global warming to ideally 1.5C before the end of the century. 

Even before Trump enters the White House, the planet is showing worrying vital signs with scientists virtually certain 2024 was the warmest year on record and the first in which global temperature rise exceeded 1.5C

What more can we expect in 2025? Our reporters and editors, along with BloombergNEF analysts, have selected trends that will shape the future of the planet this year. You can find all of them here, but we've included some below.  

Solar Installation Rate Slows in 2025

The solar market grew by 35% in 2024, but BloombergNEF expects global installations to only increase by 11% this year. As solar makes up a bigger proportion of countries' electricity mix, networks will struggle to integrate surplus daytime power into their grids. Still, solar will remain the largest source of new generation added to grids around the world in 2025.

– Jenny Chase and Lara Hayim, solar analysts at BloombergNEF

Solar panels at Cleve Hill Solar Park near Faversham, UK. Photographer: Chris Ratcliffe/Bloomberg

Oil Markets Reckon With Chinese EV Success

Electric vehicle fever has cooled in some parts of the world. Not so much in China, which BloombergNEF forecasts will represent 65% of all EVs sold globally this year. The shift to electric led the nation's top oil company to move up its forecast for peak demand by five years to 2025, and analysts expect a steep decline after. That's bad news for OPEC, as China has accounted for more than half of global consumption growth this century.

– Dan Murtaugh, reporter covering energy in China at Bloomberg News

Long-Unloved Nuclear Comes Back

Nuclear power is having a revival. In Europe, concern about global warming and the security of energy supplies amid Russia's war in Ukraine has sparked renewed interest in the energy released by splitting atoms. In the US, giant tech companies have been turning to nuclear as a climate-friendly power source. Expect to hear more news about restarting some of the big nuclear plants that have closed, and more interest in the next generation of reactors that are still under development but are expected to be smaller and easier to install.

– Jonathan Tirone and Will Wade, covering power and renewables at Bloomberg News 

Constellation Energy Corp., the owner of the shuttered Three Mile Island nuclear plant, will invest $1.6 billion to revive it, agreeing to sell all the output to Microsoft Corp. Photographer: Heather Khalifa/Bloomberg

The Arctic Moves Up the Priority List 

Global warming is accelerating at the top of the planet. Scientists will continue to track the Arctic's diminishing role as a shield against climate change as feedback loops caused by disappearing sea ice, thawing permafrost and underground wildfires turn parts of this once pristine region into a carbon source. Meanwhile, the Arctic will get busier. From new sea routes, to oil and gas deposits, to tourism, non-Arctic states including China will be keen to unlock more of the region's economic potential. At the same time, tensions between Russia and the seven NATO countries that make up the rest of the Arctic are boosting its strategic security value. Oh, and Trump wants to buy Greenland.

– Danielle Bochove, senior reporter covering climate and the Arctic at Bloomberg News

The Era of PFAS-Free Clothing Emerges

Starting Jan. 1, businesses in California and New York are banned from selling new raincoats, shirts and other everyday apparel with intentionally added per- or poly-fluorinated chemicals, or PFAS for short. California's ban also covers linens and some other textiles. There's growing evidence linking these so-called forever chemicals to cancer and other health problems. In response to the two US state bans, some companies including outdoor gear and apparel maker Patagonia, Inc. have updated their products globally, meaning consumers everywhere stand to benefit. 

– Zahra Hirji, reporter covering greener living at Bloomberg News

What do we expect for offset markets or COP30 negotiations in 2025? Read all 15 predictions on Bloomberg.com. 

Also on our radar 

By Saijel Kishan and Alastair Marsh

Morgan Stanley has terminated its membership of a major climate-banking group, joining a wave of Wall Street firms that recently quit a global alliance intended to aid the reduction of greenhouse-gas emissions.

Morgan Stanley is leaving the Net-Zero Banking Alliance, the lender said on Thursday. Citigroup Inc. and Bank of America Corp. said earlier this week that they were doing the same.

The defections are playing out against a tense political backdrop in the US, as the country's biggest financial firms find themselves the targets of Republican campaigns that have characterized net zero groups as climate cartels.

The House judiciary committee, chaired by Ohio Republican Jim Jordan (pictured), singled out groups including Climate Action 100+ and the Glasgow Financial Alliance for Net Zero for leading what they described as a climate crusade. Photographer: Graeme Sloan/Bloomberg

Other banks that have recently quit NZBA include Goldman Sachs Group Inc. and Wells Fargo & Co. All said they remain committed to their own net zero emissions goals and to helping clients reduce their carbon footprints.

NZBA had been one of a number of finance-industry groups affiliated with the Glasgow Financial Alliance for Net Zero

The Glasgow Financial Alliance for Net Zero, which was established in 2021 and operates as an umbrella group for numerous industry-specific climate alliances, ended 2024 by changing its relationship with those sub groups, according to a person familiar with the decision who declined to be identified. In practice, it means companies will be able to draw on GFANZ for guidance and assistance, but won't need to align their operations with the goals of the Paris climate agreement, the person said.

Read the full story on Bloomberg.com.  

(The NZBA had been part of the Glasgow Financial Alliance for Net Zero, which is co-chaired by Mark Carney, who is chair of Bloomberg Inc. and a former Bank of England governor, and Michael R. Bloomberg, the founder of Bloomberg News parent Bloomberg LP.)

More from Green

President Joe Biden is preparing to issue a decree permanently banning new offshore oil and gas development in some US coastal waters, locking in difficult-to-revoke protections during his final weeks in the White House.

Biden is set within days to issue the executive order barring the sale of new drilling rights in portions of the country's outer continental shelf, according to people familiar with the effort who asked not to be named because the decision isn't public.

The move is certain to complicate President-elect Donald Trump's ambitions to drive more domestic energy production. Unlike other executive actions that can be easily undone, Biden's planned declaration is rooted in a 72-year-old law that gives the White House wide discretion to permanently protect US waters from oil and gas leasing without explicitly empowering presidents to revoke the designations.

US President Joe Biden  Photographer: Will Oliver/EPA

Worth a listen

Science fiction writer Kim Stanley Robinson imagines the future for a living. And the future is very much upon us. Robinson's seminal 2020 novel Ministry for the Future opens in the year 2025. Robinson tells Akshat Rathi about how our real-life climate politics stack up against what he imagined for this era. They also discuss the dangers of science-fiction thinking in politics and why, for all his admiration of science and technology, Robinson remains so enamored with the unglamorous workings of a body like the United Nations. Listen now, and subscribe on Apple, Spotify, or YouTube to get new episodes of Zero every Thursday.

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