Transition Finance Weekly - 2/20/2025
Climate Disclosure Win, Insurance Savings, Trump Cuts Hit Home in Alabama
1. California Climate Disclosure Law Survives First Court Challenge
The judge rejected the Chamber’s constitutional claims.
California’s landmark corporate climate disclosure laws, SB 253 and 261, just survived their first legal test. A federal judge dismissed claims by the U.S. Chamber of Commerce that requiring emissions reporting would “shame” companies unconstitutionally.
These bills were the first of their kind, mandating that businesses in California disclose their Scope 3 emissions and mitigation plans. The ruling confirms the judge’s reading that the law is intended to enforce transparency and accountability for their emissions, not regulate emissions standards.
This is encouraging for states like Colorado that are considering climate transparency legislation, and an example of the leadership role that states will play as the federal government pauses the legal defense of the SEC climate disclosure rule.
2. Paradise’s Blueprint for Building Back Better
A wildfire-devastated community has rebuilt with resilience in mind – in a win-win for homeowners and insurers.
After the 2018 Camp Fire destroyed the California town of Paradise, the community rebuilt with climate resilience in mind. The town’s fire-resistant building codes required new homes to meet the scientifically designed Wildfire Prepared Home Standards, reducing future risks.
As wildfires become more frequent, this community-wide fireproofing model should guide rebuilding efforts across the country, including in Los Angeles. Skipping fire safety measures to rush construction is short-sighted; rebuilding quickly won’t matter if people lose their homes again after the next fire.
Climate-safe building codes also cut insurance costs. Mercury Insurance already offers cheaper policies for homes that meet resiliency standards, and other insurers may soon follow suit. Rather than hiking rates – State Farm has proposed a 22% hike for homeowners and 38% for renters, over the objections of California Insurance Commissioner Ricardo Lara – insurers should be pushing for homeowners to build back better.
Paradise homeowner Casey Taylor: "That's the message we're trying to make sure that the L.A. people hear when they rebuild. You have to rebuild resilient with hardened structures if you're ever gonna think about being insured."
3. Zeldin Wants to Kill the Greenhouse Gas Reduction Fund
The attempt to claw back $20 billion in obligated funds may not survive court challenge.
The IRA’s Greenhouse Gas Reduction Fund (GGRF) invested $20 billion through green banks and nonprofits to support clean energy projects across the U.S. But Trump, in his ongoing quest to roll back energy policy 40 years, is directing his EPA chief Lee Zeldin to claw back funds — even though the money’s been contractually obligated and disbursed.
Zeldin claims the fund was a “rush job” with “reduced oversight.” But that’s an opinion, not fact. GGRF dollars went through a rigorous democratic process to be disbursed, and are already making projects possible on the ground. It’s already funded a $31 million commercial solar project in Arkansas, a $250 million push to electrify California port trucks, and energy efficiency and school bus electrification in Maine.
Semafor’s Tim McDonnell: “In the Trump administration, it’s hard to imagine a more glaring target, so the GGRF was always at risk. But ending the program could also undermine the administration’s promise to cut household energy bills.”
4. Trump Funding Freeze Hits Low-Income Energy Assistance in Alabama
2,000 households face higher bills and energy shutoffs.
Low-income communities and areas relying on clean energy for economic development are the hardest hit by Trump’s push to claw back IRA funds, and vulnerable people are already paying the price: 2,000 low-income Alabamians will see their energy costs go up $100 more next month.
Huntsville Utilities confirmed the funding freeze on Community Action Agency aid, pursuant to Trump’s (likely illegal) executive order, will mean immediate rate increases, and lead to power disconnection for people who can’t afford them.
5. The Green Energy Transition is Here
And there’s no stopping it.
Politicians can’t overrule the laws of physics. The numbers don’t lie. And if federal support dries up, the states and the market will work to fill the gap, because clean energy is the future – and increasingly, the present:
1,480 GW of zero-carbon power is ready for transmission access in the U.S., including 1,086 GW of solar and 366 GW of wind, compared to just 79 GW of natural gas.
Heat pumps outsold gas furnaces in the U.S. last year, a major sign of the shift toward electrification.
25 governors signed on to install 20 million energy-efficient heat pumps by 2030, and some states are mandating that heat pumps make up 65% of heating and cooling sales by the end of the decade. San Francisco is barring new gas furnaces after 2028.
Homeowners are wild about heat pumps, and state incentives are helping: “I love this thing. From beginning to end I was really pleased…. [The heat pump] keeps the room really nice and warm. We’re also happy with the cost. We got a rebate for the installation of it which helped to convince us to get it done. I would recommend this to everyone.”
We Have Enough Power for 100 GW of Data Centers — Without Fossil Fuels
A new and detailed Duke University study debunks claims that AI will overwhelm the grid without fossil fuel expansion: the grid already has enough capacity to handle 100 GW of new data centers. The key: more efficiency and better planning.
In an extended Bluesky thread, Tyler Norris, a co-author, summarizes how data centers can optimize their energy use and work within existing grid capacity by tapping on-site generators, timeshifting and siteshifting, and making brief, targeted consumption reductions to manage peak load.
“The grid is already built for extremes,” he notes, “but sits underutilized most of the year.”