Climate Accountability and Risk

In October 2021, 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. The report comprises a climate risk supervision framework, including standards for corporations to disclose climate risk to investors and regulatory rules requiring banks and other financial institutions to measure their exposure to climate risks. Many aspects of state finances, including budgets and pensions, are exposed to climate risk. State policymakers have a range of tools and policies available that can reinforce the federal climate risk supervision framework and shield constituents from the economic threats of climate change. State governments have tremendous economic power that can be a force for shaping financial market outcomes.

This briefing book seeks to provide a pool of successful climate and clean energy policies for state legislators to reference as they are looking forward to next sessions.

The increased frequency and intensity of wildfires is putting insurance at risk for homeowners and industries such as utilities. For utilities, wildfires can cause damage or destroy power lines, substations, and other critical infrastructure. Utilities are finding it incredibly difficult and expensive to obtain coverage along with existing insurance premiums skyrocketing. As wildfire risk increases, insurers are pulling out of high-risk states, leaving homeowners without coverage options.In places where insurers have stayed, homeowners are at risk of their premiums spiking as insurers struggle to cover increasing costs. In some cases, homeowners and utilities might be left to operate without insurance.