EU Urged to Tackle Resilience Financing Challenge, Climate Risk Study Retracted, Rhizome Partners with National Grid, and More

The European Union should overhaul how climate resilience is financed in order to head off physical and economic risks, a high-level ‘Reflection Group’ of climate and financial professionals has said.

A new report issued by the European Commission-convened body urges policymakers to create “enabling conditions” for financing resilience, by establishing clearer rules for land use, setting infrastructure standards, and providing climate risk information. It also lobbies for a scale-up of joint public–private financing tools — such as blended finance, resilience bonds, and guarantees — which can absorb the early-stage risk of climate adaptation projects and potentially help crowd in institutional capital.

“Significant financing is needed to make the economy resilient; public and private sectors must join forces,” Reflection Group member and independent climate finance expert Bouke de Vries told Climate Proof.

The report stresses that Europe’s adaptation gap cannot close without making it easier for local authorities to access financing for community resilience upgrades and new infrastructure. To achieve this, it proposes a ‘Climate Resilience Project Pipeline’ to catalogue projects and standardize the contracts and economic appraisals for investments. It also recommends the EU set up a special digital platform to streamline access to public financing and guarantees for project managers.

To encourage more private capital into adaptation, regulators and competent authorities must deliver consistent, transparent guidance and standardized resilience metrics, the report says. Insurance reform is positioned as essential to this effort. Expanding natural-catastrophe coverage and offering incentives for resilient construction are highlighted as priorities. “The business case for investing in climate resilience and adaptation is stronger than many think — doing nothing will ultimately be far more expensive,” explained de Vries.

The Reflection Group’s report will inform the design of the EU-wide climate resilience and risk management initiative, which opened for public consultation on December 1.

Record-breaking floods across South and Southeast Asia have caused at least US$20bn in losses since late November, exposing how the intersection of climate change, deforestation, and underfunded resilience efforts are compounding disaster risks for some of the world’s fastest-growing economies. A rare sequence of three tropical cyclones colliding with the northeast monsoon inundated everything from farms to tourist hubs, with Sri Lanka, Thailand, Indonesia and Vietnam among the hardest hit. (Bloomberg)

The Inter-American Development Bank (IDB) greenlit a US$2bn credit line for Brazil to promote climate-resilient water and sanitation infrastructure. The financing package includes US$204mn for the city of Belo Horizonte to build extreme weather early warning systems and expand wastewater services. The money will also be used to resettle more than 6,200 residents in vulnerable areas of the city. (IDB)

UK lawmakers have opened a review of Britain’s £11.6bn (US$15.5bn) international climate finance pledge following growing criticism about how and where the money is being spent. Parliament’s International Development Committee will assess whether UK climate finance flows are actually driving resilience gains in low-income countries, after the Independent Commission for Aid Impact (ICAI) said ministers had “moved the goalposts” by reclassifying aid and Carbon Action Tracker deemed the UK’s contribution “highly insufficient.” (UK Parliament)

The Bank of England updated its supervisory framework covering banks’ and insurers’ approaches to climate-related risk management, which calls on firms to strengthen their governance arrangements, soup up their risk management practices, and advance their use of climate scenario analysis, among other things. The watchdog says the tougher regime will strengthen safety and soundness and improve financial sector resilience as climate impacts intensify. (Bank of England)

Record heat and drought delivered one of the worst UK grain harvests on record in 2025, wiping more than £800mn (US$1,066mn) from arable farmers’ revenues and intensifying concerns that climate volatility is making crop production financially untenable. Analysis from the Energy and Climate Intelligence Unit shows output of key staples fell 20% against the 10-year average, with England suffering the third catastrophic harvest since 2020. (Energy & Climate Intelligence Unit)

Global asset owners are increasingly incorporating climate risk considerations into their investment processes despite geopolitical pushback, with 85% citing climate risk as a major concern, according to a new survey from FTSE Russell. After canvassing 415 institutions, the company found that more investors than last year are ‘most concerned’ about climate risk. However, adoption of sustainable investment practices has plateaued, with 73% respondents saying they are currently implementing these, roughly the same share as in 2024 and 2023. (FTSE Russell)

The Gates Foundation and the Qatar Fund for Development launched a US$50mn, five-year partnership to scale climate-resilient agriculture initiatives across Africa and Asia. The financing package, which will also be used to support health and education development in these regions, will back projects like the development of aquaculture in Kenya and food security initiatives for thousands of smallholder farmers. (Gates Foundation)

The authors of a high-profile study estimating the global economic losses from climate change have retracted their findings after peers identified methodological flaws. The original calculations had factored into scenarios used by policymakers and financial supervisors to gauge the effects of runaway climate risks.

The paper, published in Nature in April 2024, projected a 19% hit to global income by 2050. In response to scrutiny by US and German researchers, the authors lowered this estimate to 17% this August. However, the process revealed that the issues were too fundamental to resolve through a simple amendment, leading to the study being pulled.

In a retraction note, authors Maximilian Kotz, Anders Levermann, and Leonie Wenz said their calculations were “found to be sensitive to the removal of one country, Uzbekistan, where inaccuracies were noted in the underlying economic data” for the period 1995-1999. “Furthermore, spatial auto-correlation was argued to be relevant for the uncertainty ranges,” they added.

On LinkedIn, Kotz said the furor over the paper had been a “humbling but also affirming experience.” However, he added that there is a “much wider base of evidence for large economic impacts of climate change” beyond this one study. “These policy-relevant messages from our paper remain strongly supported by the wider literature,” he wrote. Kotz and his colleagues are working on a revised version of their study for peer review.

The 2024 paper had been widely cited by institutions including the World Bank, OECD and central banks within the Network for Greening the Financial System (NGFS). In a statement, the NGFS said it had already added a disclaimer noting the controversy and stressed that its scenarios illustrate “plausible pathways,” not forecasts. It added that users of its scenarios should be aware of the retraction of the Kotz paper when interpreting and applying the outputs. 

Still, the withdrawal raises questions for regulators and investors who integrated the paper’s results into transition-planning, stress-testing and long-term risk assessments across nearly 90 countries.

The US Environmental Protection Agency (EPA) is pressing the recipients of canceled Biden-era climate grants to formally “close out” their awards — a step that would make the terminations irreversible — even as many recipients are suing to restore the funding. The Community Change Grant Program, a US$1.6bn initiative established under the 2022 Inflation Reduction Act initiative, sought to finance local efforts to clean up pollution, manage climate risks, and build resilient infrastructure. The program was scrapped by the Trump administration this year, though a raft of legal challenges from awardees and state and local governments are in process. Attorneys working for program members have asked a federal appeals court to block the EPA from conditioning expected payments to recipients on grant close-outs, arguing the agency is using overdue reimbursements as leverage while the legality of the cancellations remains unresolved. (E&E News)

North Carolina Senator Ted Budd has ended his blockade of Trump administration nominees to the Department of Homeland Security after the Federal Emergency Management Agency (FEMA) approved another tranche of disaster-recovery reimbursements tied to Hurricane Helene. The US$29mn payout comes on top of a US$155mn package granted last month. The move ends a monthslong standoff in which Budd used nomination holds to protest the slow-walking of federal funds to his storm-ravaged state. However, Budd noted that more funding has yet to be approved by the agency. (The Hill)

New York City will invest US$68mn to build Brooklyn’s first ‘Bluebelt’ in Prospect Park, aiming to curb flash flooding with nature-based solutions as heavier climate change-driven rains threaten to overwhelm the area’s aging drainage system. The Bluebelt — modeled on a similar project on Staten Island — will upgrade lake infrastructure to drain more quickly and capture storm runoff from nearby Flatbush Avenue. Design work has begun, with construction set to start in 2029 and finish by 2032. (NYC Mayor) 

The European Union agreed to postpone its anti-deforestation law for a second time, amidst mounting pushback from businesses, member states, and trading partners. The law, which forces companies to scrub commodities from their supply chains that contribute to forest destruction, had antagonized stakeholders concerned about the compliance burden as well as some non-EU countries worried about its effects on trade. Implementation is now slated for December 30, 2026 for large companies and mid-2027 for smaller operators. In addition, the due-diligence rules will be simplified, and printed products dropped from the law’s scope. (European Council)

The UK’s top science advisors urged the Prime Minister to make climate adaptation a cross-government priority to avoid escalating costs to “growth, security, and wellbeing” from climate risks. In a letter to Number 10, sent on October 28 and published online December 1, the Council for Science and Technology called for measurable adaptation targets across all departments, a government-led spatial dashboard to track climate risks and adaptation benefits, and a national strategy defining which residual risks the UK will tolerate and how they will be managed. It also urged Number 10 to lead public communication on climate impacts and the trade-offs associated with adaptation choices. (UK Council for Science and Technology)

The Thai cabinet approved the core provisions of Thailand’s first Climate Change Act, establishing a national framework for carbon pricing, emissions reporting, and climate adaptation. Among other measures, the law sets up a state Climate Fund to direct revenue from carbon taxes and credit trading into mitigation and adaptation projects, and requires public and private entities to report emissions into a new national greenhouse-gas registry. It also mandates adaptation planning at all levels of government and introduces a sustainability taxonomy to guide investment. (The Nation)

Climate adaptation tech start-up Rhizome has struck a partnership with National Grid to help the company harden its transmission networks against fast-growing wildfire threats.

Through the initiative, Rhizome — which recently closed a US$6.5mn seed round — will implement its gridFIRM platform across National Grid’s service territories. The goal is to map wildfire ignition risks across the company’s assets in Massachusetts, New York, and the UK. Rhizome’s technology will also support the utility in developing cost-effective wildfire prevention and response strategies.

“This partnership aligns perfectly with National Grid’s strategic approach to risk management, system resilience, and bill affordability,” said Casey Kirkpatrick, Director of Strategic Engineering at National Grid. “We’re committed to ensuring our system is not only efficient and reliable, but safe and resilient for each of the millions of customers depending on us for power.”

The collaboration comes as wildfire activity surges in the National Grid’s regions of operation. New York and Massachusetts saw 2,626 fires in 2024, more than double the prior year — raising reliability, safety, and cost concerns for energy providers.

On LinkedIn, Rhizome CEO Mishal Thadani said: “Approaches to mitigating utility wildfire risk and liability oftentimes skips straight to responding technologies that can stop the spread of a fire after it’s been ignited. This overlooks one of the prominent root cause[s] of an ignition in the first place –– the asset.” He added that the company’s AI-enhanced tech focuses on how assets like poles, conductors, and other hardware could fail and spark fires, helping provide utilities with the “best information on how to invest in the system to reduce that risk.”

German Earth Observation company Marble Imaging has raised a €5.3mn (US$6.2mn) seed round to advance development of its high-resolution satellite constellation. The Bremen-based start-up plans to launch its first satellite in 2026 and scale to up to 20 spacecraft by 2028, supported by more than €10mn (US$11.7mn) in earlier funding and a €3mn (US$3.5mn) anchor contract with the European Space Agency. The seed round was led by High-Tech Gründerfonds, a venture capital fund focused on deep tech and climate tech. Marble’s planned Earth Observation services include coastal hazard monitoring, wildfire mapping and disaster response, and infrastructure risk surveillance, among others. (Marble Imaging)

Sustainable Ventures and Barclays Eagle Labs have launched a new National Climate Tech Accelerator to fast-track the growth of UK climate-tech start-ups. The tie-up is offering founders a mix of commercial and technical support, Google Cloud credits, and access to national investor networks. The program combines Sustainable Ventures’ longstanding climate-tech incubation platform — which has supported more than 1,000 startups and channeled £1.2bn (US$1.6bn) in funding — with Barclays’ financial firepower. The bank has pledged to invest up to £500mn (US$666mn) in climate tech by 2027. (Sustainable Ventures)

LiveEO, another Germany-based Earth Observation start-up, has launched a new Wildfire Intelligence Suite enabling satellite-driven fuel mapping, moisture monitoring, and fire-potential tracking. The service is targeted at US utilities looking to get ahead of fast-changing ignition threats. LiveEO says the system gives operators weeks of advance warning on drying vegetation and enables coordinated prevention efforts across public and private lands. (LiveEO)

The Australian state of Victoria has launched a new Plant Protein Hub and high-tech glasshouse to speed development of protein-rich, drought- and pest-resilient pulse crops amidst tougher growing conditions caused by climate change. The facilities create a pipeline for agricultural innovations from research to commercialization, offering test kitchens, analytical labs, and collaboration spaces for start-ups, growers, and scientists. The glasshouse in particular will enable accelerated breeding and testing of varieties and management strategies for heat, disease, and pest stresses. (Agriculture Victoria)

Built environment disparities are amplified during extreme weather recovery (Nature)

Climate change and the most vulnerable populations (Nature Mental Health)

Adaptive urban economies: Evidence of intra-day temporal behavioural adaptation to extreme heat in Australian cities (npj Urban Sustainability)

State of the climate in the Arab region 2024 (World Meteorological Organization)

Duties and powers for Local Authorities in the UK to adapt to climate change (CAG Consultants)

Rethinking global soil degradation: Drivers, impacts, and solutions (Review of Geophysics)

Who bears the burden of climate inaction? (NBER Working Paper Series)

Climate change increases bilateral trade costs (Bank of England Staff Working Paper)

Thanks for reading!

Louie Woodall
Editor