He Recent Supreme Court ruling Limiting the ability of the Environmental Protection Agency to strictly regulate emissions from power plants could increase corporate risks related to climate change and undermine corporate solvency, according to debt rating agency Moody’s Investor Service .
“For carbon-intensive sectors, a backward transition increases the spectrum of more disruptive climate policies,” Moody’s said in a research note on Tuesday.
“The ruling is a major setback for the US administration’s plan to reduce net greenhouse gas emissions from the entire economy to zero by 2050 to achieve the goals of the Agreement. of Paris, “Moody’s researchers said. Beyond that, however, the decision affects the solvency of companies that are likely to prolong their use of fossil fuels and suffer more climate impacts, Moody’s found.
Damage from major weather and climate disasters has cost the US nearly $ 2 trillion over the past four decades, with the impact of these incidents increasing in recent years due to man-made climate change. The Supreme Court ruling means the U.S. will fight even harder to achieve the goals of the Paris Agreement, causing long-term problems, according to the Moody’s report.
The ruling “increases the risks of a backward and more disorderly transition to a low-carbon economy, with far-reaching negative credit implications in all sectors,” the agency said.
Because the ruling is likely to delay the transition from fossil fuels, companies from multiple industries could face “higher mitigation costs,” he added.
Experts have it warned that the Supreme Court ruling could also harm human health as well as the environment. But companies are also facing risks, with a study that found U.S. companies could lose $ 520 billion in 22 industries as the climate changes, due to impacts such as property damageloss of coastal areas due to rising waters and deaths due to high temperatures.
Although the Moody’s report did not detail specific forecasts on the financial impact of the Supreme Court’s decision, it noted that the ruling “will have little immediate effect on the credit quality of regulated utility companies in the United States.” . This is because the EPA case comes from former President Obama’s clean energy plan, which was never officially implemented, as it faced legal challenges and was back under the Trump administration.
“As such, the ruling does not repeal or restore any regulations,” Moody’s noted. “However, without more aggressive federal regulations, the pace of the transition [away from fossil fuels] it may not be enough to achieve the goals of the Paris Agreement. “
- In:
- Climate change
- United States Supreme Court
Add Comment