Transition Finance Weekly - 2/27/2025
States Protect Retirees, Polluters Pay, Trump Targets CA Clean Air
1. State Policymakers Speak Out on Defending Retirees From Politicized Attacks
We listened in on this week’s Americans for Financial Reform/Horizon Project “State Pension Power” webinar on how states can protect retirees and the public from anti-ESG assaults, and we took down some of the juiciest quotes for you:
On anti-ESG: “It's a coalition of some politicians, some industry people and some movement activists. But it all boils down to folks… trying to protect their interests and a lot of them revolve around the oil and gas industry.” – Minnesota AG Keith Ellison
On the anti-ESG legal strategy: “[T]hey're saying that ESG may be an illegal conspiracy prohibited under antitrust law. This is not true. Don't let them intimidate you. Antitrust law does not prohibit businesses or individuals from exercising their First Amendment right to work together to influence legislative or regulatory policy.” – Minnesota AG Keith Ellison
On climate risk: “I would maintain, to be a good fiduciary you have to take all different types of risk into account, and climate risk is just one of many types of risks.” — American Federation of Teachers President Randi Weingarten
On investment managers’ fiduciary duty: “Who’s Congress to tell a teacher who has worked 30 years teaching kindergarten what she should do? She elected us to be on this board. We’re fiduciaries. We have a responsibility.” – Minnesota AG Keith Ellison
On the critical importance of the issue: “[T]he stakes are high, and there’s a lot for state policymakers and pension officials to do to both protect public pensions and also to use state pension power to grow a strong economy for retirees, workers, and the public.” — AFR’s Natalia Renta
On the economic impact of the IRA: “[W]e know Arizona, of all the states in the union, has benefited from the IRA. We've seen incredible growth in jobs in the clean energy economy. We need to ensure that growth is consistent and strong, and that we set a stable message out to the companies that we work with.” — Arizona State Sen. Lauren Kuby
2. States Move to Place the Blame Where It Belongs: On Polluters
New state legislative proposals push fossil fuel companies to pay for climate disasters.
A new bill introduced by California State Sen. Scott Wiener aims to hold fossil fuel companies financially accountable for the rising costs of climate-fueled disasters. The Affordable Insurance and Climate Recovery Act (SB 222) would allow victims of wildfires, floods, and other climate-driven catastrophes to sue fossil fuel companies for damages and allow insurers to exercise the right of subrogation to recoup costs from climate-driven disasters, shifting the burden off homeowners and taxpayers and onto the fossil fuel companies that have exacerbated climate risk. State Sen. Chris Lee has introduced a similar bill in Hawaii (SB 1166), which would also allow individuals to sue fossil fuel companies and was approved by committee on Wednesday.
And in several states, including New York, climate “superfund” legislation has passed or is being considered to assess polluters for their contributions to past emissions. In California this week, lawmakers also in Sacramento introduced the “Make Polluters Pay Climate Superfund Act” (SB 684), which would create a fund to help defray the escalating costs of community resilience and climate-ready infrastructure.
Public support is overwhelming: polling shows 60% of Californians support making polluters carry the burden of rising insurance costs, and a “climate superfund” approach has supermajority support nationwide. These efforts come as fossil fuel companies continue to rake in record profits while communities struggle with skyrocketing insurance premiums and disaster recovery costs.
Pleiades’ Frances Sawyer in Pluribus News: “There’s a real accountability there that states are recognizing, that the climate has changed, that polluters are accountable for that pollution. They should be held accountable to help pay for those damages.”
3. New Jersey Introduces Major Climate Disclosure Law
States press forward for corporate climate transparency, even if the Trump administration tries to kill it.
New Jersey has introduced the Climate Corporate Data Accountability Act (S4117), which would require large companies to report Scope 1, 2, and 3 emissions — similar to laws passed in California and under consideration in New York. The New Jersey bill goes beyond the SEC’s proposed regulations (which required only Scope 1 and 2 disclosures) — which in any case are likely to die under the Trump SEC.
So far, California’s disclosure law is surviving a First Amendment challenge in federal court – the judge said if companies “want to avoid liability, all they must do is make disclosures in accordance with the legislation, not reduce their emissions.”
States are picking up the slack as a hostile federal government drops pursuit of climate transparency. And economically significant states like these three have the leverage to follow through on their requirements — and make sure companies don’t avoid disclosing the true impact of their operations.
4. Trump Administration Targets California’s Clean Air Leadership — Again
Three key emissions waivers are now under review, threatening progress nationwide.
The Trump administration is moving to revoke California’s waivers under the Clean Air Act, which allow the state to set stricter vehicle emissions standards — rules that 16 other states and D.C. also follow. These waivers have historically pushed the entire car and truck market toward cleaner vehicles, since California and the states that follow its lead represent such a large share of U.S. sales. They are why Angelenos can see the mountains most days.
Trump fought these rules during his first term; this time, his administration is using the Congressional Review Act (CRA) as a new tool to challenge them. California withdrew additional clean air regulations targeting diesel trucks and trains after Biden’s EPA failed to approve them before the transition, making clear that the federal government’s hostility to climate action is already impacting state policy.
5. FERC Gives PJM the Green Light to Prioritize Natural Gas Over Renewables
Hundreds of clean energy projects are stalled — while fossil fuel plants jump the line.
In a decision that defies both climate realities and logic, the Federal Energy Regulatory Commission (FERC) just approved a plan by PJM Interconnection — the nation’s largest regional transmission organization (RTO) — to fast-track natural gas projects ahead of renewables.
PJM’s waitlist for new energy projects is already hundreds long, and most of them are renewable. But under this new rule, large fossil fuel plants will be prioritized, and renewable generation and battery storage projects will see further delays. This isn’t the first time PJM has made spurious reliability arguments to promote fossil fuel generation, and they’ve blocked and outright rejected renewable projects, too.
Other grid operators don’t exactly have sterling climate records, but at least most of them are engaging with the opportunity renewable energy presents; PJM is just throwing up its hands and sticking with legacy generation. Their scoring system is biased in favor of the largest projects — even though renewable projects are faster and cheaper to bring online than gas turbine plants and nuclear energy, which are subject to frequent construction delays and cost overruns.
FERC Commissioner Judy Chang, dissenting: “PJM’s filing presents a risk of the worst of both worlds: it compromises the Commission’s open access principles with no guarantee it will resolve PJM’s reliability issue.”