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Contrary to the rest of the U.S. tech industry, the market for climate mitigation solutions has boomed of late. Since 2022, U.S. solar energy capacity has grown 51%; sales of electric vehicles rose 146%; and investors have plowed $473 billion into 152 manufacturing clean energy manufacturing projects. The U.S. Energy Information Administration projects battery storage capacity will double in 2024. In 2022 alone, private investors threw more than $70 billion at startups working to decarbonize everything from cement production to aviation fuel. And this is all as the cost of solar has dropped 82% over the past decade. Globally, the world now invests almost twice as much in clean energy as it does in oil and gas.
The period has not been quite so fecund for adaptation solutions, however. Whereas mitigation technologies focus on cutting emissions, adaptation and resilience focuses on solutions that can reduce the risks and impacts of climate change. Although Bank of America analysts predicted four years ago that adaptation and resilience could become a $2 trillion market by 2026, annual investment grew just 28% in 2022 to $63 billion. In that same time, financing for mitigation technologies reached $1.2 trillion.
The main distinguishing factor between the two approaches to climate tech: Where the money is coming from. While global mitigation spending is generally shared evenly between the public and private sector, 98% of adaptation finance comes from the public sector. Without the profit motive to drive down costs, many solutions don’t make financial sense for investors. “Our targeting is better but the cost curve has not been substantially cut,” said Ali Zaidi, the president’s chief climate advisor, at the Innovations in Climate Resilience conference in April. We’ve made progress, he said, but “we haven’t cut it by a factor of four or a factor of eight — that’s the kind of progress we’ve made on mitigation technology, but not in the arena of resilience.”
Sonam Velani, co-founder of Streetlife Ventures and an early investor in adaptation solutions, told me that, “traditionally, adaptation has been seen as a government problem. But today, more and more businesses are actually coming to solve those solutions.” The new climate disclosure rules from the U.S. Securities and Exchange Commission put further pressure on companies to understand their products’ climate impact. “If you look at a lot of the climate-related disclosures that are now being required,” Velani said, “companies are actually required to understand climate risk and what impact that has on their bottom line,” and making that information public drives accountability.
In early April, a coalition consisting of the Bezos Earth Fund, the philanthropic ClimateWorks Foundation, impact-focused private equity firm the Lightsmith Group, and MSCI Sustainability Institute issued a new report called “The Unavoidable Opportunity,” aiming to understand the private sector adaptation opportunity. Jay Koh, Managing Director of the Lightsmith Group, said the title was inspired by the United Nations Intergovernmental Panel on Climate Change’s own language on adaptation. “Climate resilience investments can be made at scale,” the report determined, “including in publicly traded companies.”
MSCI said its model “builds on existing definitions and approaches to identifying adaptation companies,” including the EU’s taxonomy of sustainable economic activities, then used a large language model to scour companies’ annual reports for products and services that qualified. MSCI considered the companies adaptation and resilience investments only if they were in the business of adaptation, as opposed to simply “taking measures to make their operations more internally resilient.” By that metric, 827 companies, or more than 11% of publicly traded entities in developed markets, could be considered adaptation solutions.
All these new green opportunities didn’t sprout from thin air. The idea is to push back the “investment frontier” for adaptation — to broaden the classification beyond solely “pure play” companies focused explicitly and exclusively on climate adaptations to include those with multi-use products — and thereby bring in more capital. The same is true in the mitigation market, where examples are more plentiful. Take Siemens, for instance. The German conglomerate that sells everything from healthcare IT to dishwashers; it also happens to be a leader in offshore wind energy. Despite no mention of climate mitigation in Siemens’ mission or sustainability tagline on their homepage, they are still a key player in climate mitigation technologies.
Katie MacDonald is a co-founder of Tailwind, a research and investment firm focused on accelerating the deployment of climate adaptation and resilience solutions. She told me that “most companies don’t call what they do adaptation or resilience.” In fact, she said, “most of the companies and solutions we’ve spoken to so far don’t call themselves climate change anything — they call themselves risk management or agriculture analytics or supply chain or healthcare diagnostics.”
The MSCI report sets out a list of qualifiers to help investors better understand what adaptation is, but — crucially — stops short of saying what adaptation isn’t. Koh explains the thinking. “We think it’s very early in the development of adaptation to consider” excluding any business in particular. “If we would had said early on that decarbonization only means solar panels, then we would have never opened up our minds enough to decarbonize agriculture, transportation, and buildings.”
While climate impacts will be felt across all areas of the economy, tagging such a wide range of companies as climate adaptation solutions could leave the space vulnerable to greenwashing. The report uses pipes as an example. Pipes are critical for resilience tasks such as stormwater drainage and irrigation. But the same companies also sell pipes oil fields.
There are existing standards that can help answer these questions. The UN’s 17 Sustainable Development Goals, for example, codified in 2015 at the landmark UN Sustainable Development Summit, provided a framework for organizations to measure their contributions across climate impact areas. There are also more complex metrics such as adaptive capacity, which measures, for instance, how much excess heat a crop can withstand before its yields begin to decline.
MacDonald told me she can envision other outcome-based metrics, as well. “Whether it’s looking at reduced negative health outcomes and mortality or increased asset health and functionality, there are a myriad of ways we can measure the presence of a climate resilience benefit,” she said.
The MSCI team hopes the report’s findings can enable investors and portfolio managers to create an investing strategy that encompasses every size of company including seed, venture, growth, and listed equities. Koh emphasizes that investing in adaptation isn’t a matter of wondering what the business models will be or waiting for new startups to appear. The report shows that there’s already an identifiable set of public companies that could make up an investment strategy for your existing 401k, pension plan, or portfolio.
The point is not merely to recharacterize more investing as adaptation-related, inflating the statistics with no real change in fortune for businesses and governments attempting to fortify themselves against the climate of the future. The point is for private capital to drive demand for solutions that not only prevent immense losses but foster a higher quality of life for billions of people.
“You actually know more right now about how climate change will unfold between now and 2040 than you do about the rate of inflation, interest rates, AI, consumer behavior or the betting odds on who Taylor Swift will be dating next,” Koh told me as he walked through the report’s findings. “We think that leads to an unavoidable opportunity,” though he added a caveat: “I believe these statistics were made before Travis Kelce.”
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Look more closely at today’s inflation figures and you’ll see it.
Inflation is slowing, but electricity bills are rising. While the below-expectations inflation figure reported by the Bureau of Labor Statistics Wednesday morning — the consumer price index rose by just 0.1% in May, and 2.4% on the year — has been eagerly claimed by the Trump administration as a victory over inflation, a looming increase in electricity costs could complicate that story.
Consumer electricity prices rose 0.9% in May, and are up 4.5% in the past year. And it’s quite likely price increases will accelerate through the summer, thanks to America’s largest electricity market, PJM Interconnection. Significant hikes are expected or are already happening in many PJM states, including Maryland,New Jersey,Delaware, Pennsylvania, and Ohio with some utilities having said they would raise rates as soon as this month.
This has led to scrambling by state governments, with New Jersey announcing hundreds of millions of dollars of relief to alleviate rate increases as high as 20%. Maryland convinced one utility to spread out the increase over a few months.
While the dysfunctions of PJM are distinct and well known — new capacity additions have not matched fossil fuel retirements, leading to skyrocketing payments for those generators that can promise to be on in time of need — the overall supply and demand dynamics of the electricity industry could lead to a broader price squeeze.
“Trump and JD Vance can get off tweets about how there’s no inflation, but I don’t think they’ll feel that way in a week or two,” Skanda Amarnath, executive director of Employ America, told me.
And while the consumer price index is made up of, well, almost everything people buy, electricity price increases can have a broad effect on prices in general. “Everyone relies on energy,” Amarnath said. “Businesses that have higher costs can’t just eat it.” That means higher electricity prices may be translated into higher costs throughout the economy, a phenomenon known as “cost-push inflation.”
Aside from the particular dynamics of any one electricity market, there’s likely to be pressure on electricity prices across the country from the increased demand for energy from computing and factories. “There’s a big supply adjustment that’s going to have to happen, the data center demand dynamic is coming to roost,” Amarnath said.
Jefferies Chief U.S. Economist Thomas Simons said as much in a note to clients Wednesday. “Increased stress on the electrical grid from AI data centers, electric vehicle charging, and obligations to fund infrastructure and greenification projects have forced utilities to increase prices,” he wrote.
Of course, there’s also great uncertainty about the future path of electricity policy — namely, what happens to the Inflation Reduction Act — and what that means for prices.
The research group Energy Innovation has modeled the House reconciliation bill’s impact on the economy and the energy industry. The report finds that the bill “would dramatically slow deployment of new electricity generating capacity at a time of rapidly growing electricity demand.” That would result in higher electricity and energy prices across the board, with increases in household energy spending of around $150 per year in 2030, and more than $260 per year in 2035, due in part to a 6% increase in electricity prices by 2035.
In the near term, there’s likely not much policymakers can do about electricity prices, and therefore utility bills going up. Renewables are almost certainly the fastest way to get new electrons on the grid, but the completion of even existing projects could be thrown into doubt by the House bill’s strict “foreign entity of concern” rules, which try to extricate the renewables industry from its relationship with China.
“We’re running into a set of cost-push dynamics. It’s a hairy problem that no one is really wrapping their heads around,” Amarnath said. “It’s not really mainstream yet. It’s going to be.”
In some relief to American consumers, if not the planet, while it may be more expensive for them to cool their homes, it will be less expensive to get out of them: Gasoline prices fell 2.5% in May, according to the BLS, and are down 12% on the year.
Six months in, federal agencies are still refusing to grant crucial permits to wind developers.
Federal agencies are still refusing to process permit applications for onshore wind energy facilities nearly six months into the Trump administration, putting billions in energy infrastructure investments at risk.
On Trump’s first day in office, he issued two executive orders threatening the wind energy industry – one halting solar and wind approvals for 60 days and another commanding agencies to “not issue new or renewed approvals, rights of way, permits, leases or loans” for all wind projects until the completion of a new governmental review of the entire industry. As we were first to report, the solar pause was lifted in March and multiple solar projects have since been approved by the Bureau of Land Management. In addition, I learned in March that at least some transmission for wind farms sited on private lands may have a shot at getting federal permits, so it was unclear if some arms of the government might let wind projects proceed.
However, I have learned that the wind industry’s worst fears are indeed coming to pass. The Fish and Wildlife Service, which is responsible for approving any activity impacting endangered birds, and the U.S. Army Corps of Engineers, tasked with greenlighting construction in federal wetlands, have simply stopped processing wind project permit applications after Trump’s orders – and the freeze appears immovable, unless something changes.
According to filings submitted to federal court Monday under penalty of perjury by Alliance for Clean Energy New York, at least three wind projects in the Empire State – Terra-Gen’s Prattsburgh Wind, Invenergy’s Canisteo Wind, and Apex’s Heritage Wind – have been unable to get the Army Corps or Fish and Wildlife Service to continue processing their permitting applications. In the filings, ACE NY states that land-based wind projects “cannot simply be put on a shelf for a few years until such time as the federal government may choose to resume permit review and issuance,” because “land leases expire, local permits and agreements expire, and as a result, the project must be terminated.”
While ACE NY’s filings discuss only these projects in New York, they describe the impacts as indicative of the national industry’s experience, and ACE NY’s executive director Marguerite Wells told me it is her understanding “that this is happening nationwide.”
“I can confirm that developers have conveyed to me that [the] Army Corps has stopped processing their applications specifically citing the wind ban,” Wells wrote in an email. “As I have understood it, the initial freeze covered both wind and solar projects, but the freeze was lifted for solar projects and not for wind projects.”
Lots of attention has been paid to Trump’s attacks on offshore wind, because those projects are sited entirely in federal waters. But while wind projects sited on private lands can hypothetically escape a federal review and keep sailing on through to operation, wind turbines are just so large in size that it’s hard to imagine that bird protection laws can’t apply to most of them. And that doesn’t account for wetlands, which seem to be now bedeviling multiple wind developers.
This means there’s an enormous economic risk in a six-month permitting pause, beyond impacts to future energy generation. The ACE NY filings state the impacts to New York alone represent more than $2 billion in capital investments, just in the land-based wind project pipeline, and there’s significant reason to believe other states are also experiencing similar risks. In a legal filing submitted by Democratic states challenging the executive order targeting wind, attorneys general listed at least three wind projects in Arizona – RWE’s Forged Ethic, AES’s West Camp, and Repsol’s Lava Run – as examples that may require approval from the federal government under the Bald and Golden Eagle Protection Act. As I’ve previously written, this is the same law that bird conservation advocates in Wyoming want Trump to use to reject wind proposals in their state, too.
The Fish and Wildlife Service and Army Corps of Engineers declined to comment after this story’s publication due to litigation on the matter. I also reached out to the developers involved in these projects to inquire about their commitments to these projects in light of the permitting pause. We’ll let you know if we hear back from them.
On power plant emissions, Fervo, and a UK nuclear plant
Current conditions: A week into Atlantic hurricane season, development in the basin looks “unfavorable through June” • Canadian wildfires have already burned more land than the annual average, at over 3.1 million hectares so far• Rescue efforts resumed Wednesday in the search for a school bus swept away by flash floods in the Eastern Cape province of South Africa.
EPA
The Environmental Protection Agency plans to announce on Wednesday the rollback of two major Biden-era power plant regulations, administration insiders told Bloomberg and Politico. The EPA will reportedly argue that the prior administration’s rules curbing carbon dioxide emissions at coal and gas plants were misplaced because the emissions “do not contribute significantly to dangerous pollution,” per The Guardian, despite research showing that the U.S. power sector has contributed 5% of all planet-warming pollution since 1990. The government will also reportedly argue that the carbon capture technology proposed by the prior administration to curb CO2 emissions at power plants is unproven and costly.
Similarly, the administration plans to soften limits on mercury emissions, which are released by burning coal, arguing that the Biden administration “improperly targeted coal-fire power plants” when it strengthened existing regulations in 2024. Per a document reviewed by The New York Times, the EPA’s proposal will “loosen emissions limits for toxic substances such as lead, nickel, and arsenic by 67%,” and for mercury at some coal power plants by as much as 70%. “Reversing these protections will take lives, drive up costs, and worsen the climate crisis,” Climate Action Campaign Director Margie Alt said in a statement. “Instead of protecting American families, [President] Trump and [EPA Administrator Lee] Zeldin are turning their backs on science and the public to side with big polluters.”
Fervo Energy announced Wednesday morning that it has secured $206 million in financing for its 400-megawatt Cape Station geothermal project in southwest Utah. The bulk of the new funding, $100 million, comes from the Breakthrough Energy Catalyst program.
Fervo’s announcement follows on the heels of the company’s Tuesday announcement that it had drilled its hottest and deepest well yet — at 15,000 feet and 500 degrees Fahrenheit — in just 16 days. As my colleague Katie Brigham reports, Fervo’s progress represents “an all too rare phenomenon: A first-of-a-kind clean energy project that has remained on track to hit its deadlines while securing the trust of institutional investors, who are often wary of betting on novel infrastructure projects.” Read her full report on the clean energy startup’s news here.
The United Kingdom said Tuesday that it will move forward with plans to construct a $19 billion nuclear power station in southwest England. Sizewell C, planned for coastal Suffolk, is expected to create 10,000 jobs and power 6 million homes, The New York Times reports. Sizewell would be only the second nuclear power plant to be built in the UK in over two decades; the country generates approximately 14% of its total electricity supply through nuclear energy. Critics, however, have pointed unfavorably to the other nuclear plant under construction in the UK, Hinkley Point C, which has experienced multiple delays and escalating costs throughout its development. “For those who have followed Sizewell’s progress over the years, there was a glaring omission in the announcement,” one columnist wrote for The Guardian. “What will consumers pay for Sizewell’s electricity? Will it still be substantially cheaper in real terms than the juice that will be generated at Hinkley Point C in Somerset?” The UK additionally announced this week that it has chosen Rolls-Royce as the “preferred bidder” to build the country’s first three small modular nuclear reactors.
The European Union on Tuesday proposed a ban on transactions with Nord Stream 1 and 2 as part of a new package of sanctions aimed at Russia, Bloomberg reports. “We want peace for Ukraine,” the president of the European Commission, Ursula von der Leyen, said at a news conference in Brussels. “Therefore, we are ramping up pressure on Russia, because strength is the only language that Russia will understand.” The package would also lower the price cap on Russian oil to $45 a barrel, down from $60 a barrel, von der Leyen said, as well as crack down on Moscow’s “shadow fleet” of vessels used to transport sanctioned products like crude oil. The EU’s 27 member states need to unanimously agree to the package for it to be adopted; their next meeting is on June 23.
The world’s oceans hit their second-highest temperature ever in May, according to the European Union’s Earth observation program Copernicus. The average sea surface temperature for the month was 20.79 degrees Celsius, just 0.14 degrees below May 2024’s record. Last year’s marine heat had been partly driven by El Niño in the Pacific, so the fact that the oceans remain warm in 2025 is alarming, Copernicus senior scientist Julien Nicolas told the Financial Times. “As sea surface temperatures rise, the ocean’s capacity to absorb carbon diminishes, potentially accelerating the build-up of greenhouse gases in the atmosphere and intensifying future climate warming,” he said. In some areas around the UK and Ireland, the sea surface temperature is as high as 4 degrees Celsius above average.
Image: Todd Cravens/Unsplash
The Pacific Island nation of Tonga is poised to become the first country to recognize whales as legal persons — including by appointing them (human) representatives in court. “The time has come to recognize whales not merely as resources but as sentient beings with inherent rights,” Tongan Princess Angelika Lātūfuipeka Tukuʻaho said in comments delivered ahead of the U.N. Ocean Conference in Nice, France.