Transition Finance Weekly - December 13, 2024
Town Sues Duke Energy, Michigan’s Lame Duck, Wash. State Investigates Anti-ESG Impacts
JUST IN: This week the Ohio Legislature passed a strict anti-ESG bill barring public pension funds and other state agencies from using environmental criteria in investment decisions. Senate Bill 6 now goes to Gov. Mike DeWine.
Pleiades Strategy’s Frances Sawyer: “To do right by Ohio’s retirees, pension fund managers must consider all potential risks. This bill limits their ability to do so and prevents them from upholding their fiduciary duty to protect the hard earned retirement savings of the teachers, firefighters, sanitation workers, and all the public employees who keep states running.”
1. Republicans Who Fought the IRA Now Celebrate the Energy Transition
GOP politicians are happy to take credit for clean energy’s economic benefits.
Governor Greg Abbott took to X to amplify a Fast Company report on the growth of clean energy in Texas, bragging that “Texas is leading the way with our all-of-the-above energy strategy, with more solar and wind jobs than any other state.”
With Abbott at the helm, Texas has repeatedly attempted to undermine the energy transition, protected fossil fuel companies from regulation and financial consequences, and vilified investors who make rational, climate-aware decisions. But the economic benefits of clean energy in places like Texas are so obvious that even GOP politicians can’t pretend they don’t exist.
Most IRA funding, including for clean energy, is going to GOP congressional districts, and many of their representatives are happy to take credit for the money despite deriding it and voting against it. The jobs and economic activity IRA funding has created may insulate it against being wholly eliminated after Congress turns over.
2. UAW Wants Action During Michigan Lame Duck Session
Fain calls for worker protections, healthcare, water infrastructure, and more.
UAW President Shawn Fain wants Michigan Democrats to act quickly during the lame duck session to protect living wages, healthcare, and retirement benefits before Republicans take over the Michigan House in January.
In a letter to legislators, Fain called on lawmakers to support specific policies, including privacy protections for reproductive health data, income-based water affordability, and unemployment insurance reforms.
Meanwhile, the legislature has prioritized corporate tax breaks for data centers — without any cost protections for ratepayers, any guarantees data centers will comply with Michigan’s 100% clean commitment, or any water efficiency requirements. The chamber is also considering bills on carbon capture and transportation via pipelines, which can pose serious health risks to communities. The pipeline bill lacks any requirements for testing or specific response plans in cases of leaks, which are life-threatening.
Fain: “With over 300,000 active and retired members, the UAW is Michigan’s largest union. We fight for the working class, and we strongly encourage our legislators to do the same by taking urgent action to pass legislation that helps working families and our communities.”
3. North Carolina Town Sues Duke Energy Over Climate Change
Carrboro turns to the courts to recover the costs of climate damage.
The town of Carrboro, North Carolina, is suing power giant Duke Energy over the climate impacts of its coal plants, which have triggered catastrophic damage from climate-driven flooding as well as higher town costs for electricity and road maintenance.
Duke Energy, which serves weather-battered Florida and North Carolina, is America’s third largest CO2 emitter, even larger than ExxonMobil. The town says Duke Energy has known about the effects of climate change since 1968 but for years funded climate disinformation by front groups — like a 1991 ad asking, “How much are you willing to pay to solve a problem that may not exist?”
Several states have sued oil companies for exacerbating the climate crisis, but utility companies like Duke have flown under the radar – until now.
Mayor Barbara Foushee: “Somebody has to speak truth to power about this issue with Duke Energy Corporation and so it is us.”
4. California Funds Wildfire Mitigation as Fires Rage in Malibu
Wildfire programs are the first beneficiary of the California Climate Catalyst Revolving Fund.
To jumpstart wildfire resilience for homeowners, and to help keep insurers from leaving the state, California’s public Infrastructure and Economic Development Bank will provide $25 million for adaptation and mitigation in wildfire-prone areas.
Globally, natural disaster catastrophe insurance losses topped $135 billion in 2024, with two-thirds of global losses in the United States. California is one the states with the heaviest burdens, largely due to wildfires and storm-driven flooding that insurers claim is driving them out of markets and sending premiums higher. Resilience programs can cut the risk, and the losses, over time.
Wildfire resilience investments cannot be scaled fast enough: just this week, fires in Malibu have blazed across 4000 acres, burning homes and triggering thousands of evacuations.
The Bond Buyer’s Keely Webster: “The revolving fund commitment will provide the public investment needed to accelerate projects and promote innovation in wildfire threat reduction, while building key partnerships with private capital to promote the state’s goals, according to IBank officials.”
5. LNG Terminals Put Climate Goals at Risk
New LNG projects could produce 10 gigatons of emissions by 2030.
A $200 billion wave of new gas projects could lead to a “climate bomb” equivalent to releasing the annual emissions of all the world’s operating coal power plants, says a new report. Developers project 156 new LNG terminal projects worldwide by 2030, including 63 export terminals and 93 import terminals.
New LNG investment is terrible from an emissions and climate justice standpoint. More infrastructure means more fracking, with methane leaks likely at every processing stage, worsening the climate crisis. Communities near terminals have a higher cancer risk and other pollution-related health impacts, with Louisiana — where 9 new terminals are receiving $21 billion in tax breaks — particularly hard-hit. And once new facilities are built, they can remain in operation for decades.
The Department of Energy said Wednesday that it would not approve two export terminals until the environmental reviews were completed, but gas exports are a key element of Trump’s energy plans and would likely see a reversal of any delays to export projects.
LNG terminals have significant municipal finance impacts too. For example, in Louisiana, Venture Global alone has seen $21 billion in tax breaks from local parishes.
SPOTLIGHT: Washington State Treasurer’s Office Drops Long-Awaited ESG Report
Washington’s legislatively mandated ESG report details the impact of pro- and anti-ESG laws nationwide. It builds on findings by Pleiades that hundreds of bills have been introduced in a coordinated right-wing attempt to shield fossil fuel industries and politically punish climate-aware investment managers — which have cost taxpayers and pensionholders hundreds of millions of dollars.
The report notes that in a practice that could be called “green hushing,” companies are continuing to invest in green energy and sustainability, but have become less likely to disclose it.
A key takeaway: “anti-ESG laws have local impacts in the states-of-origin by reducing projected public pension returns and increasing municipal borrowing costs, and chilling impacts on corporate transparency, stewardship, and accountability in financial markets from anti-ESG legislation.”