• Markets: It was a new week but not a new narrative for investors yesterday with stocks falling as bond yields and oil prices rose. Companies with an AI connection, like chipmakers Nvidia, AMD, and Intel, took a hit amid calls from CEOs of the companies making the models to slow down development (more on that below).

CHANGE IS IN THE AIR

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Reports early yesterday speculated that the Trump administration would roll back carbon pollution standards for fossil fuel-fired power plants…and it turns out that where there’s smoke, there’s fire. With the G20 energy summit in Houston as a backdrop, the EPA announced the controversial moves later in the day, saying the changes will save the energy industry more than $300 billion and “unleash” American energy.

What’s changing:

• Essentially, all Obama and Biden-era climate-protection measures that required gas plants to burn cleaner fuels and coal plants to capture most of their emissions by 2039 will be eliminated. These changes will take effect shortly after the agency officially publishes them.
• In a separate rule proposed yesterday, the EPA will also argue that greenhouse gases do not endanger human health or the environment. This could prevent future administrations from reinstituting the restrictions.

The science: If the US power sector were a country, it would be the world’s sixth-largest greenhouse gas emitter, according to an NYU analysis of 2022 emissions data. The regulations being wiped away could prevent ~30,000 deaths, according to Associated Press research. Even a partial unraveling, per the AP, would lead to more smog, mercury, and lead in the air (though some restrictions on mercury and other contaminants will remain in place even if all the climate rules go).

With great power…

…comes great (or at least more) AI data centers. Coal plants said that capturing and storing carbon underground, as required by the EPA’s old regulations, was so cost-prohibitive that they had to close. Since 2010, 330 coal plants have retired and another 60 have announced plans to shut down by 2031, according to the Sierra Club.

Making it cheaper to use fossil fuels coincides with the push from the tech sector to build more data centers that have been straining grids and driving up energy prices for consumers.

Looking ahead…The new rules are expected to face legal challenges from environmental groups hoping to block them.—DL

      

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