Axed EPA Resilience Grants Revealed, SEC Abandons Own Climate Disclosure Rule, Wildfire Satellites, and More

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Senate Democrats Slam EPA’s US$1.7bn Climate Grant Cuts as ‘Illegal Clawbacks’

Senate Democrats are demanding the US Environmental Protection Agency (EPA) reinstate millions of dollars in grants for community resilience and climate adaptation projects that were axed by Administrator Lee Zeldin.

Senators Sheldon Whitehouse and Lisa Blunt Rochester say Zeldin unlawfully terminated over 400 federal grants, amounting to some US$1.7bn in total funds, most of which were authorized by Congress as part of former President Biden’s Inflation Reduction Act. Zeldin first announced cancelling the grants on March 10 as part of an effort to — in his words — “rein in wasteful federal spending”.

The list of grants, shared by the lawmakers, includes dozens focused on community resilience and climate adaptation. They include a near US$20mn award for climate-safe housing programs in Philadelphia, Pennsylvania, and over US$11mn for building climate-resilient green infrastructure in Presidio, Texas. Red and blue states alike are represented on the list. A state authority in Louisiana, for instance, was slated to receive US$1mn to pilot insurance solutions that “increase equitable disaster response”, and Butte County in Montana US$20mn for a dedicated resilience hub, which would have provided clean-air shelter for residents during wildfires and other disasters.

Senate Democrats accuse the EPA of willfully violating federal appropriations law, court orders, and its own contract by attempting to void the grants. “The vast majority of the grants were made using Congressionally appropriated funds under a statutory mandate,” the Senators argued in a statement. “Any attempt to withhold the funds violates the Impoundment Control Act and Congress’s constitutional Article I spending authority.” They are demanding that Zeldin and the EPA provide documents related to what they call “the illegal clawbacks” by today (March 31).

In Brief

European Union investors — including Axa Group, Generali, and Fidelity International — have pressed lawmakers to make the bloc’s Sustainable Taxonomy voluntary, arguing that compliance costs are burdensome for limited investor benefit. In feedback to the European Commission’s consultation on streamlining the classification system, which undergirds EU sustainable finance and reporting rules, Axa wrote that the Taxonomy as a reporting tool “has limited value for companies.” Peer insurer Generali wrote that additional changes to the regulation are merited to “to provide clarity and further simplification in terms of implementation.” Other companies say that existing sustainability reporting already provides sufficient transparency and that Taxonomy criteria should be further simplified beyond what the Commission has proposed or scrapped. (European Commission) 

The World Bank has approved a US$500mn program to help Peru modernize its economy and strengthen resilience to climate shocks. The initiative supports reforms in disaster risk management, territorial planning, and renewable energy, while also backing sectors important to the country’s overall adaptation — like water and sanitation. (World Bank Group)

Poor water management by countries may undermine their sovereign credit ratings, research by Moody’s suggests — especially in emerging economies. Governments that do not provide adequate water access and sanitation infrastructure risk impeding economic growth, forcing public spending higher, and spurring social unrest and health and environmental threats. Water management is becoming more challenging because of climate change, which is changing rainfall patterns and leading to more frequent and prolonged droughts in many parts of the world. Countries including India, Pakistan, and Zambia are among the sovereigns identified as most exposed to water stress and water management issues because of their difficulty providing clean and safe water to citizens, and the thirst of a few water-intensive industries critical to their economies — like agriculture. (Moody’s)

Asset owners are outpacing investment managers on identifying climate risks and opportunities to their portfolios, according to a data analysis by the UN-backed Principles for Responsible Investment (PRI). More than a third of asset owners consider climate risks and opportunities beyond their standard planning horizon, compared to 24% of investment managers, while 58% use climate scenario analysis to inform their strategies, compared to 29% of investment managers. The PRI reviewed data from over 3,000 signatories to its principles for the analysis. (PRI) 

SEC Drops Defense of Climate Disclosure Rule

The US Securities and Exchange Commission (SEC) withdrew from the legal defense of its own climate risk disclosure rule on Thursday, in a major reversal for corporate environmental regulation. 

The rule, adopted in March 2024, would have required public companies to report on their climate-related risks and opportunities, including their physical risk exposure and adaptation options. The rule was passed by then-Chair Gary Gensler, who led the Democratic majority on the Commission under President Biden.

Under current Acting Chair Mark Uyeda, a Republican, the SEC has taken steps to dismantle the rule. It had been challenged only a few days after its approval last March by the US Chamber of Commerce and other industry groups, who claimed the rule represented an SEC effort to “micromanage” firms. Litigation was paused in February on the request of Uyeda. 

By abandoning its legal defense, the SEC is likely preparing the ground for a full rescission of the rule in the coming weeks. At present, there are three SEC Commissioners — Republicans Uyeda and Hester Peirce and Democrat Caroline Crenshaw. The Republican members initially opposed the climate rules when they were first brought to a vote last year.

In a dissenting statement on the abandonment of the legal defense, Crenshaw said the Commission was trying to unpick the regulation by unlawful means: “The Administrative Procedure Act (APA) governs the process by which we make rules. The APA prescribes a careful, considered framework that applies both to the promulgation of new rules and the rescission of existing ones. There are no backdoors or shortcuts. But that is exactly what the Commission attempts today,” she wrote.

Advocacy groups blasted the SEC’s decision. Ben Cushing, director of environmental group the Sierra Club’s sustainable finance campaign, said it represented a “dangerous retreat from investor protection” that would “leave investors in the dark at exactly the moment when transparency and action are most needed.”

In Brief

For the first time in 11 years, the US Annual Threat Assessment did not cite climate change as a risk to the nation. The omission in the report, which is compiled by the country’s intelligence community, drew sharp criticism from Senator Angus King of Maine during a Senate Intelligence Committee hearing last Tuesday. King said: “Every single one of these reports that we have had has mentioned global climate change as a significant national security threat except this one. Has something happened? Has global climate change been solved? Why is that not in this report, and who made the decision that it should not be in the report, when it’s been in every one of the 11 prior reports?” In response, Director of National Intelligence Tulsi Gabbard said that the Threat Assessment “focused very directly on the threats that we deem most critical to the United States and our national security.” The 2024 edition of the report referenced “climate” nine times. One mention read: “accelerating effects of climate change are placing more of the world’s population, particularly in low- and middle-income countries, at greater risk from extreme weather, food and water insecurity, and humanitarian disasters, fueling migration flows and increasing the risks of future pandemics as pathogens exploit the changing environment.”  (PBS NewsHour)

California’s firefighting agency has released updated wildfire hazard maps showing a 168% increase in high-risk zones since 2011. Now some 3,626 square miles, covering 3.7 million residents, are deemed to be at “high” or “very high” risk of conflagration. The increase is due to greater wildfire risk driven by climate change, improvements to fire modeling, and a recent change in the law that forces the agency to illustrate a wider range of at-risk areas. Properties in high-risk zones are subject to stricter building codes, vegetation clearance rules, and real estate disclosure requirements. (CalMatters)

California Governor Gavin Newsom signed a new executive order to accelerate post-wildfire recovery in areas of Los Angeles. The order fast-tracks the rebuilding and undergrounding of critical utility infrastructure, which should bolster community resilience and reduce future wildfire risk. Utilities are expected to deliver plans for safer electric systems by the end of this month. (Governor Gavin Newsom)

The UK Government has pledged to build or repair more than 1,000 flood defense schemes across the country over the next two years in order to protect homes and businesses from more frequent and intense inundations. £2.7bn (US$3.4bn) is being invested as part of the scheme, with £430mn (US$556mn) this year alone going toward new construction. Flood schemes due to receive funds this year include the North Portsea Island Coastal Flood and Erosion Risk Management Scheme in Hampshire, which aims to protect over 1,000 homes, and Preston and South Ribble Flood Risk Management Scheme in Lancashire, which should safeguard over 1,500. (UK Government)

OroraTech Launches First Wildfire Satellite Constellation

Thermal intelligence tech company OroraTech launched what it claims to be the world’s first dedicated wildfire satellite constellation on Thursday. 

The eight-strong array of devices are designed to deliver real-time fire detection, including during the traditionally challenging afternoon and nighttime hours when firefighters need the most support. By tapping into the constellation, OroraTech clients can benefit from faster wildfire alerts and the ability to spot fires as small as 4m x 4m. 

The satellites were built with space-based data company Spire Global and launched by New Zealand-based Rocket Lab. Ororatech now has a network of over 25 satellites in orbit providing wildfire detection and mapping services.

Advanced wildfire detection and analytics are increasingly in demand from governments and businesses. In February, the Government of Canada announced a CAD$72mn (US$50mn) investment in a dedicated wildfire satellite constellation, to be constructed by Spire Global Canada and OroraTech. The satellites are slated for launch in 2029.

In Brief

The Government of Cyprus is subsidizing hotel-based desalination plants amid fears that a prolonged drought and low dam reserves could hamper water access ahead of the country’s tourism season. The government is also investing €8mn (US$8.7mn) to fix leaky pipe infrastructure, which can contribute to water losses of up to 40%, according to the country’s agriculture and environment minister. (Associated Press)

RESEARCH

Climate risk and response: Generating an industry-informed, future-focused, research agenda (Sage Journals)

Cruel Summer (and Autumn): Humid heat trends, extremes, and mechanisms in the Southeast United States (International Journal of Climatology)

Abrupt sea level rise and Earth’s gradual pole shift reveal permanent hydrological regime changes in the 21st century (Science)

Disproportionately large impacts of wildland-urban interface fire emissions on global air quality and human health (Science Advances)

Does climate change risk impact insurance credit risk? Cross country evidence (Business Strategy and the Environment)

Extreme heat, hospital crowding, and the hidden health costs of climate change (Centre for Economic Policy Research)

State of the climate in Latin America and the Caribbean 2024 (World Meteorological Organization)

Thanks for reading!

Louie Woodall
Editor