California Attorney General Rebuts Claims Against Climate Risk Assessments
In a significant move, California Attorney General Rob Bonta and a coalition of 20 attorneys general have taken a stand against assertions that climate and energy transition risks are no longer pressing concerns. This initiative follows a contentious debate spurred by a letter from Republican attorneys general challenging the downgrade of credit ratings by major agencies due to climate change impacts.
OAKLAND — Last week, Attorney General Bonta and his colleagues addressed a letter to the Securities and Exchange Commission (SEC), countering an earlier communication from a group of Republican attorneys general. The April 22 letter criticized the nation’s leading credit rating agencies for allegedly downgrading the credit ratings of companies and governments based on climate-related financial risks, expressing concern about potential harm to the fossil fuel industry. The coalition of 20 attorneys general argues that the April 22 letter misrepresents the status of climate initiatives and appears to pressure rating agencies into neglecting crucial risk factors in their assessments.
“From rising sea levels to extreme weather, we know that the climate crisis presents increasing risks to companies and jurisdictions across this country. These risks must be acknowledged — not hidden away because the Trump Administration decides climate change is not convenient to its agenda,” said Attorney General Bonta. “Yet, Republican attorneys general are actively challenging the use of independent, third-party analysis of financial risk based on their own anti-sustainability agendas. I joined a coalition of 20 attorneys general in correcting the record: Climate change is real and both global and state economies are full speed ahead on planning for it — even if the Trump Administration is not. Americans must have accurate information to be able to make informed investment decisions based on our climate reality and risks.”
Highlighting the financial implications of climate change, Bonta and other attorneys general stress that environmental factors, including climate risks, are crucial in credit risk assessments. Over the past decade, the U.S. has faced 192 severe weather events, causing $1.5 trillion in damages, underscoring the financial vulnerabilities linked to climate change.
The April 22 Letter
The Republican attorneys general’s April 22 letter, originating from states with significant oil and gas interests, contends that credit rating downgrades were unwarranted for companies within the oil and gas sector. It argues that energy transition risks have diminished due to recent policy shifts. The letter also questions whether California maintains its stance on climate change as an urgent issue. However, the coalition challenges this, emphasizing that credit assessments should remain factual and free from political influences.
Response from the Coalition of Attorneys General
In their recent correspondence, the attorneys general counter the April 22 letter’s claims:
Ignoring Financial Risks of Climate Change: The coalition underscores the reality of climate change, supported by scientific consensus and widespread public backing for climate policies. Ignoring climate impacts overlooks significant financial risks, particularly for the fossil fuel industry and its stakeholders, due to natural disasters and changing weather patterns.
Mischaracterizing Climate Initiatives: Despite federal policy shifts favoring fossil fuels, global efforts to combat climate change remain robust. Notably, 194 countries have ratified the Paris Agreement, committing to limit global temperature increases. Countries like the United Kingdom and China have set ambitious targets for emissions reductions and increased electric vehicle adoption.
California continues its proactive approach, pursuing ambitious goals for emissions reductions and carbon neutrality. Key initiatives include:
- The 100 Percent Clean Energy Act targets 60% renewable energy by 2030 and 100% by 2045.
- The Cap and Invest program sets a declining cap on greenhouse gas emissions, funding projects that protect public health and the environment.
- The Low Carbon Fuel Standard aims for a 30% reduction in carbon intensity of transportation fuels by 2030 and 90% by 2045.
- Comprehensive carbon management, including geologic storage and carbon sequestration initiatives.
Attorney General Bonta’s letter is supported by counterparts from New York, Colorado, Connecticut, the District of Columbia, Delaware, Hawaii, Illinois, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, Virginia, Washington, and Wisconsin.
Original Story at oag.ca.gov