Briefing Book
Climate Finance Briefing Book
July 23, 2024
Issue Area
Climate Accountability and Risk
Overview
As the climate crisis continues, state legislators are working to hold polluters accountable and address the increased risk created by climate change. Through policies like carbon pricing, cap-and-invest, climate superfunds, and climate finance, legislators can address climate challenges while also holding polluters accountable and directing funds towards social and environmental programs. Without this type of legislation, everyday people will bear the increased burden of climate related costs instead of the corporations who did the most damage.
States like Washington and California have created economy-wide cap-and-invest programs, while others are joining regional initiatives such as RGGI (the Regional Greenhouse Gas Initiative). For climate superfunds, states like Vermont and New York, have passed legislation to allow the state to recover financial damages from fossil fuel companies for the impacts of climate change. Also, across the country, states are passing a variety of climate finance legislation to reinforce the ability for financial institutions to utilize environmental, social, and good governance (ESG) standards and shield constituents from the economic threats of climate change.
Key Facts
Pollution, like carbon dioxide and methane have a cost, causing climate related damages from more frequent and severe flooding, storms, wildfires, and more. A cap-and-invest program recognizes this reality and puts a price on pollution, shifting that cost back to corporations.
Extreme weather events cost the US $150 billion per year, due to direct impacts such as infrastructure damage, worker injuries, and agricultural losses.
The Financial Stability Oversight Council (FSOC) issued a report concluding that climate change poses an “emerging and increasing threat to U.S. financial stability,” and directed FSOC’s member regulatory agencies to institute climate financial regulations.
Jump to:
Carbon Pricing and Environmental Justice
The impacts of climate change are not evenly distributed across society with frontline communities often being hit the hardest by climate change impacts, although they have often contributed the least to the causes of climate change. It is important to design climate accountability and risk policies to support communities that will be impacted the hardest.
Cap-and-Trade
Cap-and-trade programs should be paired with mandatory pollution control regulations in order to ensure that pollution does not intensify or shift to another community.
Prioritize Impacted Communities
In order to address disproportionate pollution burdens, states must prioritize impacted communities in distributing funds from carbon pricing programs. Many states are directing a minimum of 35% of all state investments in climate and clean energy projects to communities overburdened by pollution and underserved by infrastructure.
Polluter Accountability
By holding polluters accountable to help pay for damages caused by the climate crisis, it will relieve the burden on environmental justice communities that have been dealing with these costs for decades.
Cap-and-Trade
Cap-and-trade programs should be paired with mandatory pollution control regulations in order to ensure that pollution does not intensify or shift to another community.
Prioritize Impacted Communities
In order to address disproportionate pollution burdens, states must prioritize impacted communities in distributing funds from carbon pricing programs. Many states are directing a minimum of 35% of all state investments in climate and clean energy projects to communities overburdened by pollution and underserved by infrastructure.
Polluter Accountability
By holding polluters accountable to help pay for damages caused by the climate crisis, it will relieve the burden on environmental justice communities that have been dealing with these costs for decades.
Cap-and-Trade
Cap-and-trade programs should be paired with mandatory pollution control regulations in order to ensure that pollution does not intensify or shift to another community.