Global Corporates Face US$1.2trn in Climate Costs, Reinsurers Back NOAA, EPA Threatens Wetlands, and More

Finance:

• Largest Companies Face US$1.2trn in Climate Shock Costs

• EPA Terminates Green Bank Funds

Policy:

• Reinsurers Advocate for NOAA

• EPA Threatens US Wetlands Protections

Tech:

• Greenhouse Gases Threaten Satellites

Research:

• Another round-up of papers and journal articles on all things climate adaptation

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Largest Companies Face US$1.2trn in Climate Shock Costs

Extreme weather and other climate impacts are projected to cost the world’s largest companies US$1.2trn every year by 2050 according to S&P Global analysis — assuming they do nothing to adapt.

Utilities are anticipated to bear the brunt, with the average company in this sector shouldering US$4.6bn in losses annually, almost five times more than firms in other industries.

The overall figure assumes global warming peaks at 2.7°C by 2100, in line with the climate scenario known as SSP2-4.5, which roughly matches the world’s current emissions trajectory. Extreme heat is the climate hazard estimated to load on the most costs, at around US$696bn a year by the 2050s. Water stress comes in second, with projected losses of US$265bn. By the 2090s, these costs could rise to US$925bn and US$300bn a year, respectively.

However, the projections assume companies do not change their financials, asset portfolios, or business models in response to climate change. S&P says that adaptation could go a long way towards lowering these costs. For example, a study last year suggested that every $1 spent on adaptation measures for commercial real estate — such as green or cool roofing — could save a building owner $7.45.

The climate loss projections cover the S&P 1200 index, a barometer of large publicly traded companies from across countries and sectors. Each company is assigned a financial impact from nine climate hazards using S&P Global Sustainable1 climate physical risk data. This impact number is the weighted average financial impact for all assets linked to the company. Costs include those stemming from higher operational expenses, business interruption, and repair needs, among others. They do not include potential losses from changing demand patterns or fluctuating revenues as climate change progresses. 

EPA Terminates Green Bank Funds

US$20bn of grants for green banks and climate resilience projects were terminated by the head of the US Environmental Protection Agency (EPA) last Tuesday, though the legality of the action is in dispute. 

Administrator Lee Zeldin cancelled all public money for the Greenhouse Gas Reduction Fund (GGRF) — a Biden-era initiative aimed at channeling billions into green projects — claiming “programmatic fraud, waste, and abuse, and misalignment with agency’s priorities.” The action further escalates a clash between the EPA and climate groups that were granted the funds last year. Awardees say they have been unable to access funds from their Citibank accounts for weeks. Two groups — Climate United and the Coalition for Green Capital (CGC) — are suing for the monies to be released.

The CGC says EPA leadership “has made baseless accusations about the Greenhouse Gas Reduction Fund” and left the nonprofit “no choice but to pursue a durable resolution through the courts.”

In a Thursday hearing on Climate United’s case against the EPA and Citibank, federal judge Tanya Chutkan told EPA lawyers that they “have to have some kind of evidence” to back up their claim that the GGRF grant somehow broke the law. “You can’t even tell me what the evidence of malfeasance is,” she added. Chutkan did not issue a ruling on Thursday, but asked Climate United to amend its lawsuit and the EPA to offer information on alleged wrongdoing by Monday.

Climate United said if the funds weren’t released by the end of last week, then award recipients may have to layoff staff and default on contracts with project partners.

In Brief

Global economic output could reduce by 15% to 34% if temperatures are allowed to rise by 3°C by 2100, according to an analysis by the Boston Consulting Group (BCG). However, investments in mitigation and adaptation of just 1-2% of total output could avoid damages of up to 27% of GDP. BCG calls for the economic case for adaptation to be made more forcefully to leaders, so that they make the investments needed this side of 2050 to protect future economic growth. (Boston Consulting Group)

Policy frameworks in Asia are blocking greater private investment in climate adaptation, according to analysis by the Asia Investor Group on Climate Change (AIGCC). Despite the region’s vulnerability to climate risks and its desperate need for adaptation finance — estimated at US$187–359bn annually — current national adaptation plans are not designed to encourage private sector spending on climate-proofing measures. The AIGCC recommends that policymakers enhance data transparency, develop clear adaptation financing strategies, and forge public-private collaborations to unlock resilience investment. (Asia Investor Group on Climate Change)

Reinsurers Advocate for NOAA

Reinsurers have urged the Trump administration to preserve climate and weather data services provided by the National Oceanic and Atmospheric Administration (NOAA), claiming the agency’s partnership with the insurance industry helps “protect American lives and property before and after a natural hazard event.”

In a letter to Commerce Secretary Howard Lutnick dated February 27, Frank Nutter —president of the Reinsurance Association of America (RAA) — pressed the government to maintain public access to five NOAA resources, including the Storm Events Database and Next Generation Weather Radar, which is used to define weather events across states, and wind and hail climatology and data.

“Perhaps no other federal entity facilitates greater economic and commercial activity than NOAA and its data sources,” wrote Nutter, making the case for these datasets to be retained.

NOAA has been roiled by mass layoffs in recent weeks ordered by the Trump administration. Roughly 10% of NOAA staff have already been fired, according to reports, with the New York Times saying agency headcount could shrink by up to 20%.

EPA Threatens US Wetlands Protections

Protections for US wetlands face rollbacks as part of a deregulatory blitz by President Trump’s Environmental Protection Agency (EPA).

Last Wednesday, EPA Administrator Lee Zeldin announced plans to redefine what wetlands, marshes, and similar ecosystems count as “waters of the United States” under the 1972 Clean Water Act. This could exempt hundreds of thousands of acres from federal regulation and open the door to increased development on formerly protected land — undermining US flood resilience in the process. 

Wetlands serve as natural flood barriers, capable of absorbing millions of liters of excess water. The EPA’s own website says wetlands in or near urban areas “are particularly valuable” given their ability to counteract “the greatly increased rate and volume of surface-water runoff from pavement and buildings.”

Zeldin says he wants the revised definition to align with the Supreme Court’s 2023 ruling in Sackett v. EPA, which narrowed Clean Water Act protections to those wetlands with a “continuous surface connection” with so-called “navigable waters” — meaning streams, oceans, rivers, and lakes. This would exempt most inland and urban wetlands from the law. Zeldin said the EPA would work with the US Army Corps of Engineers on clarifying the definition, with an eye on reducing regulation and lowering permitting costs for landowners operating on or near wetlands. 

The rulemaking proposal follows a flurry of deregulatory announcements by Zeldin, related to 31 EPA rules and actions. Significantly, this includes the 2009 “endangerment finding”, which holds that carbon dioxide pollution harms human health and welfare. Zeldin called it the “holy grail of the climate change religion.” If this were eliminated, it would remove the justification for regulating climate pollution across the US.

In Brief

Peruvian farmer Saul Luciano Lliuya is suing German energy giant RWE, claiming its emissions have contributed to glacier melt that threatens his hometown of Huaraz with flooding. Lliuya seeks €21,000 (US$23,000) toward a US$3.5mn flood defense project. A German court must first determine whether glacier melt is raising the level of Lake Palcacocha and threatening Lliuya’s home. The case is being watched closely for its potential to shape future climate litigation and corporate responsibility for adaptation costs. (Reuters)

The US Department of Defense is scrapping 91 social science-related studies, including research on climate change impacts. Defense Secretary Pete Hegseth dismissed climate-related research as “crap,” marking a shift from the previous administration’s focus on integrating climate risk into military planning. Projects on the chopping block include one study on the climate-food-urbanization nexus as a source of instability in Africa, and another on the social and institutional determinants of vulnerability and resilience to climate hazards in the African Sahel. (US Department of Defense)

US Transportation Secretary Sean Duffy rescinded two Biden-era memos on incorporating climate risk and social justice analysis into critical infrastructure projects. Duffy argued the memos imposed unnecessary burdens, conflicted with Congressional authority, and represented federal overreach. One of the memos, issued in 2023, called on the Federal Highway Administration, a unit of the Department of Transportation, to prioritize “infrastructure that is less vulnerable and more resilient to a changing climate” and address environmental impacts like storm water runoff. (Department of Transportation)

Germany’s incoming Chancellor has proposed a €500bn (US$546bn) special fund to modernize infrastructure over 12 years, with a fifth earmarked for climate action and resilience. Fund investments would be used to upgrade transport, energy grids, hospitals, and more. German utility BDEW, said the fund’s mission should be to ensure “the economy is strengthened and that climate action and resilience are reconciled.” (Clean Energy Wire)

Greenhouse Gases Threaten Satellites

Fewer low-orbiting satellites will be able to safely navigate the atmosphere because of rising climate pollution, according to a study by MIT aerospace engineers.

Their research shows that carbon dioxide and other greenhouse gases can shrink the upper atmosphere, lowering its capacity to sustain a large number of satellites without risking collisions and potentially dangerous debris falls. Some of the most popular atmospheric layers for orbital devices could see capacity reduced by 50-66%.

Today, over 10,000 satellites circle the earth in low orbit, a region encompassing up to 1,200 miles from the Earth’s surface. Many provide essential services, such as broadband access for remote areas, as well as climate and weather forecasting. However, the growing number of devices has crowded parts of the atmosphere, forcing satellite operators to run evasive maneuvers more frequently. Operators’ ability to avoid collisions will reduce as the atmosphere shrinks.  

The MIT researchers show that while greenhouse gases heat the lower atmosphere, causing global warming, they radiate heat at higher altitudes, essentially cooling the layer known as the thermosphere. This cooling forces the thermosphere to constrict, which in turn lowers “atmospheric drag”, the force that draws old satellites and orbital debris towards the Earth, where they burn up on contact with the air. Put simply, a loss of atmospheric drag means an increase in satellite collision risk. If the satellite-bearing capacity of an atmospheric layer is exceed, the researcher say “runaway instability” could occur — a sequence of in-orbit crashes that make it all but impossible for devices to operate there.

“The upper atmosphere is in a fragile state as climate change disrupts the status quo,” said lead author of the study William Parker, a graduate student in AeroAstro. “At the same time, there’s been a massive increase in the number of satellites launched, especially for delivering broadband internet from space. If we don’t manage this activity carefully and work to reduce our emissions, space could become too crowded, leading to more collisions and debris.”

In Brief

Venture capital firm Equator has raised US$55mn for an early-stage climate tech fund targeting startups in Africa. The fund aims to invest in scalable solutions across energy, agriculture, and mobility sectors — like climate insurance for extreme weather events and AI-enabled logistics tools for businesses. Investors in the fund include public financial institutions like British International Investment, Proparco, and IFC, as well as foundations and endowments like the Global Energy Alliance for People and Planet. (TechCrunch)

RESEARCH

Prioritizing involuntary immobility in climate policy and disaster planning (Nature Communications)

Adaptation gaps in airports (Nature Climate Change)

The futures of climate modeling (npj Climate and Atmospheric Science)

Large increases in public R&D investment are needed to avoid declines of US agricultural productivity (Proceedings of the National Academy of Sciences)

Guidance for integrating climate resilient water, sanitation and hygiene into NAPs and NDCs (WaterAid)

Water and climate: Rising risks for urban populations (WaterAid)

Climate change impacts leading to increased exposure to harmful toxins (European Environment Agency)

Thanks for reading!

Louie Woodall
Editor