Transition Finance Weekly - 2/6/2025
New Homes on Strip-Mined Land, Insurance in Crisis, Learning the Hard Way on Anti-ESG
1. From Coal Scars to Climate Action in Kentucky’s Appalachia
Former strip mining sites will be transformed into safe, solar-powered communities for flood-displaced residents.
In Appalachian Kentucky, scarred coal landscapes are being converted into climate-resilient neighborhoods for hundreds of climate refugee households. As floods like those from Kentucky’s 2022 disaster displaced people permanently, some are relocating to higher ground on former strip-mined and mountaintop removal (MTR) sites. These elevated areas, once symbols of environmental degradation, now offer refuge from floodwaters.
These communities will be solar-powered, slashing energy costs to just $21.50 a month compared to the regional average of $100+. It’s a bitter irony: coal companies stripped the land and left ordinary people to bear the environmental and economic fallout. Now, as climate change forces families from their homes, they’re rebuilding on the remnants of an industry that profited from their loss.
These new climate communities can be a model for resilience in the face of extreme weather.
Austyn Gaffney for the New York Times: “Kentucky’s innovative approach to climate migration… could help vulnerable families relocate, work to solve affordable housing issues in eastern Kentucky, and slow or even reverse depopulation in the region. In doing so, it could also expand the meaning of home.”
2. California’s FAIR Plan Is At the Breaking Point
The insurance crisis, wildfire edition.
Already more than 4,400 wildfire claims totaling over $900 million have been submitted to California’s FAIR plan — which has less than $400 million in reserves. So the plan is tapping into its limited reinsurance fund, which is capped at $2.6 billion. In other words, FAIR is on the brink, as recent fires push it towards insolvency and could leave thousands of survivors without the resources they desperately need to recover.
Commercial insurers are being hit similarly hard. On Tuesday, in response to disaster losses, State Farm requested permission from regulators for an emergency 22% rate hike for homeowners and a 38% rate hike for renters.
And as limited payouts prevent many people from rebuilding and the housing market starts to price in climate risk, climate change could erase $1.5 trillion in home equity over the next 30 years, according to new analysis from First Street.
ProPublica’s Abrahm Lustgarten for the New York Times: “Climate change is upending the basic assumption that Americans can continue to build wealth and financial security by owning their own home. In a sense, it is upending the American dream.”
3. In Georgia, More Fossil Fuels, Less Consumer Protection
Georgia Power leans into fossil fuels for data centers and eyes higher costs for households.
Georgia Power’s newly filed 2025 Integrated Resource Plan (IRP) is a disaster for consumers and the climate. Even though it touts plans to build an additional 1,100 MW in renewable capacity, it still shows heavy dependence on fossil fuels, including keeping 4,000 MW of coal plants online at least six years past their retirement dates and investing in more natural gas infrastructure.
What’s driving the additional load? AI data centers. And the IRP makes two unlikely assumptions: that current demand will continue and that AI won’t get more efficient. It’s Georgia Power making unrealistically conservative assumptions, and state regulators (likely) swallowing them whole.
Worse, Georgia Power’s opaque IRP process offers little room for consumer input and no apparent interest in learning from states like Virginia, which is considering legislation to set guardrails on data centers after a new JLARC study showing that the load growth will cost ratepayers and increase emissions.
4. State Legislation Spotlight: “Debanking” Laws in Florida and Tennessee
Proposals forcing banks to finance fossil fuels, hate groups, and national security risks gain ground.
So-called “debanking” bills that passed in Florida and Tennessee last session will create liability for banks by forcing them to continue to fund destructive industries and hate groups – like the hate group Alliance Defending Freedom and the Foundation for Government Accountability, which advocates for child labor.
Groups like these are pushing similar proposals in multiple states, including Idaho and Alabama (where GOP lawmakers call their debanking bill a high legislative priority). In Congress, the Senate Banking Committee held a debanking hearing on Wednesday, while the House Financial Services Subcommittee has a similar hearing planned around debanking crypto.
Their point is to force financial institutions to continue to support politically favored enterprises like debt collectors, fossil fuels, and gun manufacturers despite the objective risks. Florida’s law was even flagged as a national security risk by the Treasury Department for possibly requiring violation of the Bank Secrecy Act and anti-money laundering (BSA/AML) laws.
The Costs of Anti-ESG: States are Learning the Hard Way
Anti-ESG bills cost people real money, and states like Oklahoma and Texas are learning this the hard way — causing even GOP strongholds like Wyoming to think twice before they send their cities and counties into the red and sap pension holders’ returns.
In Oklahoma, the Energy Discrimination Elimination Act cost local governments and pension funds $180 million in just 18 months.This has prompted some legislators to consider rolling it back to prevent further budget damage and investor losses — but others want to expand it. In its current form it’s now been permanently blocked by a state court judge after a retiree sued.
In Texas, anti-ESG legislation — very similar to Oklahoma’s — has cost an estimated $660 million and 3,000 jobs.
In Wyoming this session, lawmakers heavily amended an extreme anti-ESG bill, which would have cost the state pension system $1.16 billion, after extensive opposition from within the Freedom Caucus and active anti-ESG State Treasurer Curt Meier – showing that even some GOP lawmakers understand the hefty costs of these bills.
In Idaho, where there is strong pressure for a debanking bill, an alarmed banking lobbyist said “It is simply not the case that a bank would debank or exit a customer based on their connection to a specific industry or their political affiliation…. [W]e feel like this bill goes against free market principles and invites government overreach into business….”
In Virginia, the banking industry said we should not “be moving the Bureau of Financial Institutions into a political conspiracy complaint box."