U.S. coal utilities would be smart to begin assessing their future financial risks based on the Paris climate agreement, the credit ratings agency Moody’s said Wednesday, even though Trump has withdrawn from the deal and cut back rules meant to enforce it.
Moody’s said that other factors, including state and local policies, “are keeping the U.S. power sector and regulated utilities on track or even ahead” of the Paris requirements for emissions reductions — and that, accordingly, coal utilities would be wise to plan as though the U.S. is still a part of the deal.
The analysis was released during the first few days of the United Nations climate summit in Poland, where even large fossil fuel-dependent countries like Saudi Arabia were seen reinforcing their commitments to the 2015 climate deal.
It also comes as President Trump sought to portray France as opposed to the Paris deal using the protests of gasoline taxes as evidence. On Thursday, Trump plans to announce new rules to spur new coal power plant construction.
Moody’s said in its Wednesday report that it evaluated the voluntary climate assessments of four of the largest coal utilities in the U.S., but said only two used the Paris accord target in assessing their risk to future global warming regulations.
The two companies that analyzed the Paris deal included one of the largest coal utility companies in the U.S., North Carolina-based Duke Energy, along with Pennsylvania’s PPL.
Duke Energy has resisted most of the Trump administration’s talk of increasing coal use in the U.S., saying it will remain on track to convert its entire coal fleet to natural gas and solar power in the coming years.
The two other coal giants evaluated, Ohio-based American Electric Power and Southern Company, only discussed a basic climate scenario in their voluntary analyses and did not specify the two-degree scenario envisioned in the Paris deal.
Nevertheless, both companies are in some stage of transitioning to a cleaner-generation fleet that is more dependent on natural gas and renewable energy.
The main point of the Moody’s report was to identify similarities and differences in the ways companies are voluntarily evaluating the risks posed by climate change in their financial disclosures. It provided no hard conclusions but only suggested that using the Paris target is an important benchmark that should be part of a company’s risk analysis.
All four companies followed some part of the recommendations made by the Task Force on Climate-Related Financial Disclosures on how they should proceed, explained Moody’s. No one company fully provided all of the recommended disclosures.
