How Marine Carbon Removal Is Governed in the High Seas
The ocean plays a key role in regulating our climate, absorbing 30% of carbon dioxide emissions and 90% of excess heat. With scientific consensus that carbon dioxide removal is needed to complement deeper emissions reductions, there’s growing interest in leveraging the ocean’s natural processes to pull more carbon dioxide out of the atmosphere.
This is possible through marine carbon dioxide removal (mCDR) approaches, such as seaweed cultivation, ocean alkalinity enhancement and nutrient fertilization. Estimates indicate that mCDR could remove billions of tons of carbon per year by midcentury. But this massive potential is paired with an equally large uncertainty about both the efficacy of proposed approaches and the possibility of ecological and social impacts.
Marine CDR approaches are in early stages of development today, with all tested close to countries’ coastlines in national waters and very few tested at sea. However, as interest in mCDR grows from countries and companies looking to meet net zero and other climate commitments, at-sea testing and deployment of approaches proven safe and effective will likely move into international waters. These waters, known as the high seas, make up around two-thirds of the world’s ocean.
For any marine carbon dioxide removal activity in the high seas, clear and comprehensive governance will be needed to ensure environmental safety, scientific integrity and compliance with international law. Today, mCDR is governed by the existing international treaties and agreements that protect the ocean and marine life. But because they generally were not written with marine CDR in mind, comprehensive and proactive regulation of marine carbon removal activities may require more specific governance frameworks.
The State of mCDR Development and At-Sea TestingInterest and investment in marine carbon removal have been growing over the past few years both in the United States and other countries, like Germany, Iceland and Singapore.
In 2023, the U.S. published the Ocean Climate Action Plan, a government-wide roadmap to leverage the ocean for climate mitigation. And in late 2024, it released a national mCDR research strategy to address the objectives in the Ocean Climate Action Plan, including building a sufficient knowledge base about the efficacy and tradeoffs of different marine CDR approaches and developing a robust regulatory framework for their use. The federal government provided an initial $24 million for mCDR research projects in 2023; whether and how this work will continue under the Trump administration is uncertain.
In Germany, the CDRmare project, which runs through 2027, is working to assess if and how mCDR can play a role in removing CO2 from the atmosphere. In the EU, the SEAO2-CDR project, which also runs through 2027, is funded by the EU’s Horizon Europe, a research and innovation program, and includes interdisciplinary work to develop tools and guidelines to help ensure mCDR is developed responsibly and transparently.
Apart from national and supranational governments, interdisciplinary researchers have developed codes of conduct to ensure responsible research. Groups like Carbon to Sea Initiative and Ocean Visions are supporting mCDR research with funding and other resources.
Projects are also beginning to move out of the lab and into the marine environment for testing along national coastlines. One mCDR project led by Woods Hole Oceanographic Institute in Massachusetts is in the process of applying for EPA permits to do ocean alkalinity enhancement testing off the state’s coast. Another project received a permit from the Army Corps of Engineers to add carbon-removing alkaline sand offshore in North Carolina. In total, Ocean Visions identifies 45 research trials that are either in operation or concluded around the world, and six more than are approved to move forward.
As for projects in the high seas, a non-profit coalition of researchers has announced its intention to start research trials for ocean iron fertilization in international waters of the Pacific as early as 2026. The coalition plans to request approval from the U.S. Environmental Protection Agency, which administers the Marine Protection Research and Sanctuaries Act, the relevant domestic legal framework for this activity.
Parties to the London Convention and Protocol — two international legal frameworks that govern activity on the high seas — have been meeting to discuss governance of mCDR activity. In 2023, parties released a non-binding statement recommending that OAE and biomass sinking be treated similarly to ocean iron fertilization – namely that activity outside of legitimate scientific research be deferred. A November 2024 meeting presented various ways to make this statement stronger, but none moved forward due to parties’ disagreement over the role of commercial interests in mCDR development.
How the High Seas Are Currently GovernedThe location of mCDR activity will determine how it is governed. In the vast majority of cases, mCDR activities conducted within 200 nautical miles from the shore are within a country’s exclusive economic zone (EEZ) and are governed by that country’s domestic laws and regulations. Beyond a country’s EEZ is the high seas, which is open access to all countries and is governed by international legal frameworks.
Several international legal frameworks govern activity in the high seas but do not explicitly regulate mCDR, as they were written before mCDR activities existed or had been proposed. As a result, they are now being interpreted and applied with varying levels of clarity.
Major international legal frameworks governing activity in the high seasAgreementYear adopted; year entered into forceNumber of partiesGeneral intent of agreementUnited Nations Convention on the Law of the Sea (UNCLOS)1982; 1994169 countries and the EUEstablishes a legal framework for all use and management activities in the ocean, including defining maritime boundaries, cooperating in transboundary waters, managing mineral exploitation and protecting freedom of scientific research.Convention on Biological Diversity (CBD)1992; 1993195 countries and the EUFocuses on the conservation of biological diversity, the sustainable use of its components and the fair and equitable sharing of genetic resources.London Convention (LC)1972; 197587 countriesPromotes the effective control of the deliberate disposal, or dumping, of wastes and other matter at sea. Parties must regulate dumping and prohibit dumping of certain substancesLondon Protocol (LP)1996; 200655 countriesProtects and preserves the marine environment from all sources of pollution more comprehensively than the LC (which it is intended to modernize and eventually replace) Parties must prohibit dumping of all substances except those listed. Member states can be Contracting Parties to the LC, the LC/LP or neither the LC/LP.Biodiversity Beyond National Jurisdiction (BBNJ; also known as High Seas Treaty; Global Ocean Treaty)2023; not yet in force15 (60 needed to enter into force)Provides the legal framework and process under UNCLOS to protect marine life and biodiversity in the high seas. Allows for creation of marine protected areas in international waters and requires environmental impact assessments for certain activities.Sources: UN Law of the Sea; Convention on Biological Diversity; London Convention; London Protocol; LC/LP Status, BBNJ
Each framework addresses different, but related, aspects of ocean governance, and coordinating across multiple agreements helps address shared goals for protecting biodiversity, reducing pollution and responding to climate impacts. For example, the Convention on Biological Diversity’s (CBD) intergovernmental scientific advisory body provides guidance on alignment with Biodiversity Beyond National Jurisdiction (BBNJ) for meeting biodiversity goals in areas beyond national jurisdiction. Countries rely on global organizations like the International Maritime Organization (IMO), a specialized UN agency, and the CBD Secretariat for support coordinating policy alignment and enforcement measures.
How Does mCDR Fit into These Legal Frameworks?Under the United Nations Convention on the Law of the Sea, all parties are free to conduct marine scientific research in the high seas, if it is done peacefully and following “appropriate scientific methods.” However, UNCLOS does not define what constitutes marine scientific research and fails to differentiate research conducted to expand knowledge from research that enables future commercial activity. (This is the case for other international law, too.) UNCLOS also includes general obligations for all parties to protect and preserve the marine environment — for example, by, for example, limiting marine pollution and avoiding the introduction of invasive species.
General provisions of the Convention on Biological Diversity relevant to mCDR include identification and monitoring for activities likely to have a significant adverse effect on the conservation and sustainable use of biodiversity and a requirement for environmental impact assessments for certain activities. The CBD initially adopted a resolution to ban commercial application of iron fertilization in 2008, and then expanded that in 2010 to ban all climate-related geoengineering activities except for small-scale scientific research studies in a controlled setting. While the resolution is nonbinding, it’s supported by 196 countries and was reaffirmed at the UN Biodiversity Summit (COP16), an indication of the strong lack of support for projects that are not “small scale” or “in a controlled setting.”
The London Convention and the London Protocol focus on limiting dumping or disposal of material into marine waters. Whether mCDR approaches that add material to the ocean for carbon removal are considered dumping is a topic of continued debate. The Convention includes a list of materials that cannot be dumped. The Protocol is stricter and includes a list of material that can be dumped (with a permit) and prohibits dumping everything else, with limited carve-outs.
Following the 2008 CBD resolution, the parties to both the London Convention and the London Protocol passed a resolution agreeing that iron fertilization is within scope for both agreements, but that only legitimate scientific research is allowed. In 2010 the parties adopted a tool to determine if an activity constitutes legitimate scientific research. And in 2013, an amendment to the Protocol officially banned iron fertilization except for legitimate scientific research, and an annex to that amendment determined that additional marine geoengineering techniques could fall under the scope of the amendment in the future. Only six of the LP’s 55 parties have ratified the amendment so far — fewer than the two-thirds needed to enforce it. This amendment is one of few examples of governance specific to certain mCDR techniques, but the Protocol’s ability to more comprehensively govern mCDR is limited by its overall aim of limiting ocean dumping.
Biodiversity Beyond National Jurisdiction is an agreement ratified under UNCLOS that opened for signature in 2023 and has not yet entered into force. Its objective is to create a comprehensive framework under UNCLOS to address sustainable use of biodiversity and conservation in areas beyond national jurisdiction. It does this through two mechanisms: environmental impact assessment and area-based management tools, such as marine protected areas that could be used to preclude mCDR testing in areas where no other existing international body has competency.
For environmental impact assessments, BBNJ includes more specific requirements than UNCLOS, such as assessing whether the planned activity will have “more than a minor…effect” on the marine environment and determining if the effects are not well understood. If either criterion is met, a screening process would determine whether an environmental impact assessment is needed. Since most mCDR methods have not been well studied, they would likely trigger this screening. Under BBNJ, a full environmental impact assessment would include the monitoring and reporting of economic, social, cultural and human health impacts. Following public comment of potentially affected parties, it would then up to the state party with jurisdiction over the project to decide if it could go forward.
Aside from these legal frameworks, customary international law arises from established international practices and is generally binding on all states (unlike earlier frameworks which just apply to countries that are party to each agreement). Some aspects of customary international law are also enshrined in legal frameworks. For example, the “no harm rule” is included in the CBD, so parties to that agreement must adopt measures to enact these treaties domestically. The “no harm rule” means that all countries are obligated to prevent activities under their jurisdiction from causing significant harm to the territory of other countries and areas beyond the individual jurisdiction and control of countries, such as the high seas.
These legal frameworks are primarily designed to minimize harm, and mCDR approaches are intended to provide a net benefit to the climate while minimizing local harms. However, current legal frameworks are not designed to weigh that benefit against any harms introduced by the mCDR activity. In this way, current legal frameworks are not well suited to governing mCDR activities.
Applying International Legal Frameworks to mCDR in the High SeasMarine CDR activities in the high seas will be governed by the country that registered the vessel performing those activities or the country where it is loaded with material for the activities. Countries that are parties to international legal frameworks are obligated to create mechanisms to enforce them domestically. And in some cases, countries that are not parties also have domestic laws implementing these frameworks. For example, the United States is not a party to the London Protocol, but the U.S. EPA’s Marine Protection, Research and Sanctuaries Act is a domestic application of the London Protocol’s anti-dumping aims. While the regulation of activities in the high seas would fall under relevant national laws, how the regulation is approached would likely be influenced by ongoing discussions among parties to each legal framework.
International framework governance of selected mCDR approachesApproachUNCLOSLC/LPCBDBBNJAll approachesGeneral provisions around protection of the marine environment and marine scientific research.General obligation of employing a precautionary approach. mCDR activities could be permissible if deemed to be for purposes other than mere disposal, to not run contrary to the aims of the LC/LP and to constitute “legitimate scientific research.”General provisions on identification and monitoring, and environmental impact assessments.
If passed, all approaches will be subject to spatial regulations established through area-based management tools and could be evaluated through environmental impact assessments.
Seaweed cultivationRegulates the introduction of new or alien species. Relevant if using non-native species.Likely permissible, provided sinking of seaweed or any added nutrients to grow seaweed are not considered dumping.Could be considered “climate geoengineering,” but ban is non-binding and excludes small-scale scientific research.Nutrient fertilizationField tests for research could be permissible, but potential downstream impacts may violate “no-harm” principle under customary international law.Small-scale research could be permitted under the LC/LP if it doesn’t risk harming the marine environment. Large-scale application would likely be prohibited under the LP.Could be considered “climate geoengineering” but the ban is non-binding and excludes small-scale scientific research; requires case-by-case assessment.Ocean alkalinity enhancementField tests would be permissible if general obligations are met.Research projects could be permitted if they don’t risk harming the marine environment. Large-scale application would likely be prohibited under the LP.Activities would be permissible if general obligations of the CBD are met.What’s Next for International Governance of Marine CDRMarine CDR has the potential to provide large-scale carbon removal if, along with increased funding to address scientific knowledge gaps, governance frameworks can comprehensively regulate the new sector. This potential coincides with growing demand for legal clarity on country obligations to address climate change under international law. The International Tribunal for the Law of the Sea released an advisory opinion in May 2024 emphasizing the responsibility of countries under UNCLOS to prevent, reduce and control greenhouse gas emissions to protect the marine environment, and the International Court of Justice is likely to clarify similar obligations under broader treaties sometime this year. These opinions will dually guide countries’ responsibility to climate action and appropriate caution in mCDR implementation.
In 2025, discussions about these issues will continue under the London Protocol and the London Convention, scientific experts under the United Nations will propose a new framework to assess projects, and global forums like the UN Ocean Conference and Our Ocean Conference will convene ocean experts on topics including mCDR. The coming years will see countries advancing interdisciplinary research, including on the evaluation of social and environmental impacts, informed by emerging data-sharing and management guidelines. And, as individual projects move forward, transparent communication within and among countries on the impacts and benefits will provide a greater shared understanding for updating the relevant international governance frameworks to consider this potential climate solution.
scuba-diver-ocean-kelp.jpg Ocean carbon removal Climate climate change biodiversity Equity & Governance Ocean Type Technical Perspective Exclude From Blog Feed? 0 Projects Authors Katie Lebling Carolyn SavoldelliRELEASE: Chile Joins France as Co-Lead of 100% Alliance for Sustainable Ocean Management
LONDON (February 10, 2025) — Chile has been confirmed as the new co-lead of the 100% Alliance, an international campaign urging all coastal and ocean states to commit to the sustainable management of 100% of their national ocean areas. As the world prepares for a critical year in ocean action, Chile joins France in partnership with the Ocean Panel in leading this initiative, which is coordinated by World Resources Institute.
The 100% Alliance seeks to accelerate international commitments ahead of the next UN Ocean Conference (UNOC) and drive progress toward 100% sustainable ocean management by 2030, advancing the critical targets of Sustainable Development Goal 14 (Life Below Water).
Chile has long been a pioneer in ocean sustainability. The country was among the first to ratify the UN High Seas Treaty and has already set protections for over 40% of its marine areas, surpassing the 30 x 30 conservation target — a global goal to protect 30% of the world's land and ocean areas by 2030, set under the Kunming-Montreal Global Biodiversity Framework. As a founding member of the Ocean Panel, Chile committed to 100% sustainable ocean management in 2020 and published its Sustainable Ocean Plan in 2023, a comprehensive strategy for managing the ocean's resources while preserving marine life and ecosystems.
"Chile has a strong legacy in ocean stewardship, as demonstrated by our National Ocean Program,” said Julio Cordano, Director for Environment, Climate Change and Oceans at Chile’s Ministry of Foreign Affairs. “By effectively managing our own waters, we have built a solid foundation to advance sustainability both in surrounding areas and on the high seas. We look forward to working closely with our French colleagues to deepen knowledge exchange, strengthen international collaboration, and build momentum for a sustainable ocean economy."
France warmly welcomed Chile's appointment as co-lead of the 100% Alliance. “Chile's commitment to 100% sustainable ocean management and leadership in marine conservation are invaluable as we work towards our shared goals," said Ashok Adicéam, French General Delegate for UNOC and Deputy Special Presidential Envoy (France). “This collaboration comes at a critical time, as we approach the UN Ocean Conference in Nice this June. A united response is the best way to tackle challenges like overfishing, climate change, and weak governance, and we have a unique opportunity to mobilize as many commitments as possible to advance 100% sustainable ocean management worldwide."
Momentum for 100% sustainable ocean management is growing rapidly worldwide. In October 2024, 56 Commonwealth nations adopted a declaration recognizing Sustainable Ocean Plans as a key governance tool. At COP28 in Dubai, the leaders of the Pacific Islands committed to the goal of 100% effective sustainable management in their vast ocean territories; an area five times the size of the United States. The Intergovernmental Oceanographic Commission of UNESCO has also recognized the 100% approach as a crucial framework for global ocean governance.
"It's an honor to welcome Chile as co-lead of the 100% Alliance alongside France, and we look forward to collaborating with them to achieve our shared goal of 100% sustainable ocean management," said Tom Pickerell, Global Director of the Ocean Program, WRI. “Sustainable ocean management in one area is only truly effective if others are not left vulnerable to overexploitation. This partnership underscores the urgency of addressing today's ocean challenges holistically through global cooperation.”
Together, Chile and France will guide the 100% Alliance in expanding its membership and accelerating global efforts to advance sustainable ocean management for a healthier, more resilient ocean economy.
Ocean Type Press Release Exclude From Blog Feed? 0STATEMENT: World Resources Institute Addresses Recent Trump Administration Actions
WASHINGTON (February 6, 2025) — In recent days, the Trump Administration has taken significant actions to slow U.S. climate action. They have frozen most U.S. foreign assistance, including international climate finance, moved to abolish USAID, and withdrawn from the Paris Agreement. Domestically, the administration has frozen most climate spending and is seeking to rework many government institutions and initiatives.
Following is a statement from Ani Dasgupta, President & CEO, World Resources Institute:
“The United States’ retreat from multilateralism and climate action at home and abroad is deeply concerning. These actions will only worsen the everyday challenges Americans are facing, from high energy bills and food prices to deadly floods and wildfires. The Trump administration’s recent actions make America and the world less safe, less strong and less prosperous.
“Less safe because climate impacts will continue to wreak havoc on American communities, while the causes of conflicts overseas will likely rise as the U.S. disinvests. Less strong as countries lose confidence in the U.S. as a reliable partner and communities are unable to recover from disasters. And less prosperous as the U.S will miss out on green jobs and the exploding clean energy economy around the world.
“The U.S. provides over 10% of the world’s climate finance to countries in need. Halting this finance is not only morally wrong but also damages U.S. interests. It’s still too early to tell what the U.S. cuts will mean for reaching the $1.3 trillion climate finance target that developing countries need by 2035, but the gap will likely be harder to fill. In this critical year for finance and with aid budgets under pressure everywhere, it’s even more vital we look at how to maximize multilateral development bank finance, international taxes and attracting private finance.
“The administration’s actions will cause significant suffering for people around the world. But we hope the rest of the world will continue to pursue life-saving development assistance and encourage global stability. WRI is more committed than ever to our work with partners in and beyond the U.S. to build stronger and more resilient, low-carbon economies that are good for people and the planet.”
4 Graphics Explain Los Angeles’ Rare and Devastating January Fires
Editor's note: This article was first published on Jan. 9, 2025. It was updated on Jan. 14 and Feb. 5 to reflect the latest information.
Wildfires tore through the Los Angeles area this January, displacing tens of thousands of people and claiming at least 29 lives as of Feb. 4. The Palisades fire — the first to erupt — engulfed over 23,000 acres and devastated surrounding communities. Four weeks later, both the Palisades and Eaton fires are now fully contained. But they rank among the deadliest and most destructive fires in California history.
While California is no stranger to summer wildfires, this January outbreak was an extreme outlier, fueled by unusually severe fire weather conditions across the state's southern region. It will take time to unravel the many factors contributing to the situation. Yet it is a stark reminder that climate change is making wildfires more frequent, intense and destructive than ever before — with individual lives, homes and businesses paying the price.
Data on WRI's Global Forest Watch platform shows just how uncommon these fires were, and how fire trends are changing as the planet warms.
Large Wildfires Are Rare in California this Early in the YearFire alerts, which use satellite data to detect fires based on the heat they generate, rose quickly as fires spread across Los Angeles County. Over 200 fire alerts were detected in the area between Jan. 7 and Jan. 22 — more than 130 times the average for the first four weeks of the year from 2012-2024. (No new high confidence fire alerts were detected between Jan. 22 and Feb. 4.)
During most years, no fire alerts are detected in Los Angeles in the first three months of the year, let alone the first few weeks. Only one other year, 2021, had more than 10 fire alerts in Los Angeles between January and March. That year went on to become one of California's most devastating for wildfires.
In California, wildfire season typically starts in June and continues through October, when the weather is hot and dry. Weather conditions change toward the end of the year, bringing rainfall to much of the state. Cool temperatures and rain during the winter months typically keep wildfire activity low.
This year, the rain came late in Los Angeles. Following a summer of record-breaking temperatures and extreme heat, rainfall between October and January was far below normal for the time of year: only about 4% of the typical amount. This lack of rainfall, combined with strong and dry Santa Ana winds, created the right conditions for a surge in fire activity.
Fire Activity Is on the Rise in CaliforniaWhile these early season fires are rare, forest fires in general have become increasingly devastating for Californians over the past two decades, threatening lives and communities from Napa County in the north to San Diego in the south.
Fire is, on average, the largest driver of tree cover loss in the state. In 2020 and 2021, California lost a record amount of tree cover to fire: over 700,000 hectares (1.73 million acres), or more than 5 times the area of Los Angeles. These wildfires had catastrophic impacts; claiming lives, creating hazardous air quality, ravaging ecosystems and causing billions of dollars in property damage.
What's Fanning the Flames?The increasing frequency and intensity of wildfires in California can be attributed to both natural and human-induced factors, with climate change playing a central role. Rising global temperatures have created hotter, drier conditions across the landscape. This makes fires not only more likely to ignite but also easier to spread. The hottest years on record globally — 2023 and 2024 — have seen extreme heat intensify droughts and dry out vegetation, creating an ideal fuel source for wildfires.
Indeed, one recent study estimated that climate change made L.A.'s January fires 35% more likely to occur.
Southern California is also frequently affected by the Santa Ana winds, which bring strong, dry gusts that further fuel the fires and make containment difficult. This combination of heat, dryness and wind is compounded by the fact that communities are increasingly being built near vegetated areas (known as the "wildland-urban interface"), putting both people and their built environment at greater risk. As average temperatures in California continue to rise, so does its vulnerability to catastrophic fires.
Increasing Wildfires Are Both a Local and Global ChallengeThe increasing size and severity of wildfires in California is not an isolated event. Climate change is making wildfires more frequent and intense around the globe, resulting in larger forest fires worldwide. Hot and dry weather conditions brought on by climate change result in longer and more severe fire seasons and make bigger areas more prone to wildfires.
With each fraction of a degree of warming, the risk of wildfires significantly increases. As one of the primary risk factors associated with wildfires, it is critical that countries work together to reduce carbon emissions and keep global temperatures below the threshold set by the Paris Climate Agreement.
Meanwhile, communities on the frontlines don't have to wait for a global climate response. There are steps they can take now to reduce wildfire risks and protect residents, such as restoring degraded forests and using controlled burns and other strategies to reduce fire fuel.
New models to pay for these activities are emerging across the U.S. In California, Forest Resilience Bonds developed by Blue Forest and WRI raised $29 million for restoration and wildfire risk reduction across 63,000 acres in the Sierra Nevada mountains. Expanding such approaches in the U.S. and elsewhere can play an important role in safeguarding communities, homes and businesses from the growing threat of wildfires.
While it is too early to tell how bad 2025 will be for wildfires, we know which direction long-term trends are headed. Taking steps to protect communities and curb climate change cannot wait.
To view historical fire trends, track fire activity in 2025 and sign up to receive fire alert notifications, visit the Global Forest Watch map and platform.
palisades-fire-la-january-2025.jpg Forests United States fires Forests global forest watch data visualization Type Charted Exclude From Blog Feed? 0 Projects Authors James MacCarthy Jessica RichterWhy 2025 Is a Critical Year for the Ocean
The ocean’s alarm bells are ringing.
Sea surface temperatures are at record highs due to climate change, marine pollution is pervasive, and ecosystem decline and biodiversity loss are rife. With just five years left to achieve the UN Sustainable Development Goals (SDGs), SDG14 — the target to “conserve and sustainably use the oceans” — has seen slow progress and received the least funding of all the SDGs. And President Trump’s return to office has delivered yet another blow, suspending offshore wind energy projects and emphasizing resource extraction.
All this stands in the way of building a sustainable ocean economy that supports people’s needs and protects the ocean. But at the same time, our ocean challenges and commitments are coming to a head. Over the past decade, the world made a number of important international ocean agreements and treaties that require swift implementation this year to ensure they are effective.
That’s why 2025 is a bellwether year for the ocean.
It’s one of deadlines and milestones. It brings both the pressure and the potential to be transformative for ocean governance, conservation and sustainable development. With a packed calendar of high-profile events, critical milestones, and major international agreements in the making — the ocean will, finally, take center stage.
6 Opportunities for Ocean Progress in 20251) Protecting the high seasThe UN’s Agreement on Biodiversity Beyond National Jurisdiction, known as the High Seas Treaty, seeks to conserve and sustainably use marine resources in the 61% of the ocean that lies outside of national jurisdiction; an enormous area lacking comprehensive protections. Current international agreements, such as the UN Convention on Biological Diversity and the UN Convention on the Law of the Sea (UNCLOS), impose responsibilities on states to protect nature, but only within their national boundaries. This leaves a significant governance gap of approximately 104 million square miles, or 43% of the Earth’s surface.
After nearly two decades of discussion, including five years of negotiations, the treaty was adopted in 2023. With 106 signatories and 15 ratifications already, the pressure is on to secure the 60 ratifications needed, with hopes that this can be achieved by the UN Ocean Conference (UNOC) in Nice, France this June. Conference co-hosts France and Costa Rica are leading the diplomatic effort to make UNOC a major moment for the High Seas Treaty.
2) Tackling harmful fisheries subsidiesIn June 2022, the World Trade Organization (WTO) achieved a milestone by adopting the Agreement on Fisheries Subsidies. This initial agreement (“Fish One”) addresses the most harmful subsidies, which are government payments that contribute to illegal, unreported and unregulated (IUU) fishing, overfished stocks, and fishing on unregulated high seas. For the agreement to take effect, it requires formal acceptance from two-thirds of WTO members (111 countries). As of early 2025, 89 members had ratified it, leaving 22 more to reach the threshold. Securing the remaining acceptances is a major focus for ocean advocates in 2025.
Negotiations will also continue on "Fish Two" of the agreement, which targets broader subsidy reforms, including capacity-enhancing activities like vessel construction and fuel subsidies. Addressing concerns of developing countries will be critical to ensuring the agreement balances sustainability goals with development needs, and that it achieves broad buy-in.
3) Securing a Global Plastics TreatyEfforts to finalize a comprehensive treaty addressing plastic pollution continue in 2025. Between 8 and 10 million metric tons of plastic ends up in the ocean each year, and plastic waste accounts for about 80% of all marine pollution. The treaty aims to create a legally binding agreement covering the entire lifecycle of plastics, from production to disposal. The Intergovernmental Negotiating Committee (INC) initially aimed to finalize it by the end of 2024. However, significant differences among participating nations delayed a final agreement. As negotiations extend into 2025, there are high hopes for reaching an agreement.
A High Ambition Coalition of over 100 countries is advocating for binding commitments to reduce virgin plastic production and eliminate harmful chemicals. However, oil-producing nations like Saudi Arabia, Russia and China are pushing for a focus on waste management and recycling. Rwanda’s proposal for a global target to reduce primary plastic polymer production and phase out harmful chemicals gained traction in 2024, as did Panama’s suggestion of mandatory reporting on plastic production. These proposals and political dynamics set the stage for critical discussions in 2025.
Plastic pollution above a coral reef in Indonesia. Negotiations around the Global Plastics Treaty, which would address the plastic pollution problem, will continue in 2025. Photo by Stocktrek Images, Inc. / Alamy Stock Photo 4) Developing rules for deep-sea miningThe International Seabed Authority (ISA) aims to finalize regulations for the commercial exploitation of deep-sea minerals. Deep-sea mining remains divisive; its impact is still largely unknown, and many scientists fear it could have grave consequences for marine life and planetary health. Negotiations have failed to reach an agreement so far, but all eyes will be on Kingston, Jamaica in July as the ISA gathers for its 30th session, where member states will work to find a consensus.
WRI’s ocean priorities for 2025This global campaign aims to ensure 100% sustainable management of ocean areas under national jurisdiction by 2030. Coordinated by WRI and led by the government of France in partnership with the Ocean Panel, the initiative will use UNOC as an opportunity to celebrate new commitments from countries joining the 19 members already committed to this goal.
Social Ocean Accounting
WRI's community-based approach to social accounting for the ocean, piloted in Mozambique, highlights how coastal communities depend upon ocean resources for their livelihoods, food security, and cultural connections. By embedding social equity in ocean governance, this approach ensures inclusive decision-making. In 2025, WRI will expand this framework to other regions and showcase its impact at the OOC.
5) Delivering the EU Ocean PactThe EU Ocean Pact, announced by European Commission President Ursula von der Leyen, is a political initiative to promote sustainable ocean management and ensure the resilience and productivity of marine ecosystems. The Pact is being informed by a call for evidence, inviting input from stakeholders. The final version will be presented at UNOC in Nice.
6) A series of high-profile eventsOur Ocean Conference (OOC) – Busan, South Korea – April 28-30
2025 marks the 10th edition of the OOC. Since its inception in 2014, the OOC has catalyzed over 2,600 voluntary commitments worth around $140 billion from governments, businesses and civil society to advance marine conservation. In our role as secretariat to the OOC, WRI’s Ocean Program will use this milestone as an opportunity to analyze the progress made on these commitments, fostering accountability and guiding future actions.
UN Ocean Conference (UNOC) - Nice, France - June 9-13
The third UNOC, co-hosted by France and Costa Rica, will be a critical moment for making progress on SDG14. UNOC is expected to yield significant outcomes, including the Nice Ocean Action Plan, which will feature a political declaration, potentially the ratification of the High Seas Treaty, and commitments from public and private sectors.
The lead-up to the UNOC features three pre-conference events: the One Ocean Science Congress will provide scientific insights into ocean health to guide conservation and sustainable use; the Ocean Rise and Coastal Resilience Coalition Summit will launch a coalition of coastal cities and island states to address sea level rise, share best practices and mobilize resources; and finally, the Blue Economy and Finance Forum will spotlight sustainable investment and innovation, and foster collaboration to build a resilient ocean economy.
IUCN Congress - Abu Dhabi, UAE – October 9-15
The IUCN World Conservation Congress 2025 will bring together global experts, leaders and decision-makers to discuss and address the world's most pressing conservation and sustainability challenges. Held every four years, it is the largest nature conservation gathering in the world. It is an essential platform for addressing challenges like marine pollution, overfishing and climate change, while mobilizing resources for biodiversity protection.
COP30 - Belém, Brazil – November 10-21
COP30 will be a critical opportunity to integrate the conservation of tropical forests and the ocean (both significant carbon sinks) into global climate strategies. In November, Presidents Luiz Inácio Lula da Silva of Brazil and Emmanuel Macron of France launched the "Road from Nice to Belém" initiative, to connect the outcomes of the 2025 UNOC in Nice to COP30 in Belém. This highlights the integrated approach needed to address both ocean conservation and climate change, ensuring that the commitments and actions agreed upon at UNOC are carried forward and built upon at COP30.
A Pivotal Year for the OceanBy using these opportunities to advance sustainable ocean management, we can achieve transformative change that benefits people, nature and the climate. That’s why the ocean must remain a priority throughout this pivotal year. Success depends on collective action. We call on governments, businesses and civil society to join us in making 2025 a momentous year for the ocean.
boat-hero.jpg Ocean Climate climate change pollution Ocean Type Commentary Exclude From Blog Feed? 0 Authors Tom PickerellCommunity Benefits Snapshot: Block Island Wind Farm Community Benefits Agreement
In December 2016, the Block Island Wind Farm, located off the coast of Rhode Island, became the first operational offshore wind farm in the country. Block Island is a popular tourist destination and home to the town of New Shoreham. The original developer of the wind farm, Deepwater Wind, agreed to a community benefits agreement (CBA) with New Shoreham, stipulating that Deepwater Wind would build a transmission line to transmit wind power and link Block Island to the mainland for the first time and co-install a fiber optic cable to bring broadband internet to the island. The town secured a host of other benefits in the agreement, including infrastructure improvements, a project labor agreement, and two $1.25-million donations to the local historical society and the Southeast Lighthouse Foundation. However, perhaps the most unique aspect of the Block Island Wind Farm CBA was how the developer engaged with the community: Deepwater Wind hired a full-time community liaison to listen to and share information with the community, and funded technical consultants to help community members formally express their concerns.
Context- Project title: Block Island Wind Farm
- Location: New Shoreham, Rhode Island
- Sector: Offshore Wind
- Developer: Deepwater Wind, acquired by Ørsted in 2018 after Block Island project was completed
- Type of project agreement: Community benefits agreement
Block Island is synonymous with the town of New Shoreham, a small community of around 1,000 year-round residents that swells to more than 10,000 during summer tourism season. In 2009, the Providence-based developer Deepwater Wind was selected by the state of Rhode Island to construct the Block Island Wind Farm to demonstrate the viability of offshore wind in Rhode Island and model how to navigate the permitting process. The 30-megawatt (MW) Block Island Wind project consists of five 6-MW turbines located 2.9 miles south of the island and a 34.5-kilovolt submarine transmission cable from Block Island to the Rhode Island mainland. The transmission cable connected the island to the mainland electricity grid for the first time and dramatically lowered electricity costs for island residents by allowing the import and export of electricity. The New Shoreham community proposed a CBA to ensure that the project would provide tangible benefits for Block Island residents and businesses.
The following analysis is based on interviews with Block Island residents, a comprehensive literature review, published permitting materials, and communication with other Rhode Island stakeholders. The CBA for this case is not publicly available, limiting opportunities to evaluate how closely the language in the agreement matches publicly available information about the project and information shared by project stakeholders. We endeavored to back up all claims contained within this analysis using primary source material wherever possible.
EngagementIn 2009, Rhode Island signed a Joint Development Agreement with Deepwater Wind, signaling the company was the state’s preferred developer for two offshore wind farms. Commissioned by the Governor of Rhode Island, the primary goal of Block Island Wind Farm was to improve electricity reliability and environmental quality on the island. This project would establish a local clean energy source, connect the island to the mainland electric grid, and shutter the polluting diesel generators which powered the island and experienced frequent power surges and brownouts.
Prior to project permitting and construction, Deepwater Wind was required by the state’s Administrative Procedures Act and the Rules and Regulations of the Coastal Resources Management Council (CRMC) to hold a public hearing on the proposed project. The CRMC also created a statewide Special Area Management Plan (SAMP) with the goal of balancing the development and protection of Rhode Island’s ocean resources. The SAMP requires proactive engagement between the CRMC, the developer and the public, and allows the public to provide recommendations for the siting of offshore wind. Beginning in 2010, the SAMP outlined the state’s coastal management plans and included guidelines for offshore wind projects such as Block Island.
Deepwater Wind and the state held public meetings regularly on the island and mainland from 2009 to 2012, providing a forum for local, state and federal stakeholders to learn about, plan and discuss the proposed wind farm. Beyond holding the mandatory meetings for permit approvals, Deepwater Wind met with various interested and affected parties, including the fishing, shipping and recreational industries, environmental organizations and residents of New Shoreham.
The New Shoreham Town Council delivered community concerns about the proposed wind farm to Deepwater Wind, which included: 1) why the $700,000 application fee was waived; 2) the project’s potential environmental impacts and decision to undergo an environmental impact assessment instead of a more robust environmental impact statement; 3) concern that the cost of the transmission line and substation that would be passed on to Block Island ratepayers; 4) the overall aesthetics; and 5) the eventual decommissioning of the project.
The Council did not have the technical expertise to review the project plans or explain the proposal to residents, so it hired consultants to help. Deepwater Wind agreed to reimburse the Council for this expense as part of its CBA with the town. The New Shoreham Municipal Energy Committee was also heavily involved in the project development process. Formed in the early 2000s, the committee is made up of five community members with a professional background or special interest in energy. Deepwater Wind met with the committee, which hosted additional public meetings and made recommendations on the project to the Town Council.
In 2009, Deepwater Wind hired New Shoreham resident Bryan Wilson to serve as community liaison — hosting community informational meetings, answering questions in daily office hours and facilitating community involvement in the project. As a native of Block Island, Wilson had the respect of locals and an understanding of the community’s needs. Our interviews with New Shoreham residents highlight the critical role the community liaison played in educating the community on different aspects of the project and empowering community members to participate in the wind farm’s development. According to one interviewee, “The smartest thing [Deepwater Wind] ever did was hire an actual local, Bryan Wilson, who had been on the Town Council and who lived on the island. He had been following the [New Shoreham Municipal] Energy Committee and was the point person for the island.”
Ultimately, the New Shoreham Town Council voiced support for the wind farm, concluding it would "provide significant economic and environmental benefits to Block Island,” including lowering electricity rates, reducing dependence on high-polluting diesel generators, and increasing resiliency. Before the wind farm, the island experienced frequent blackouts and brownouts during periods of high demand. The elimination of reliance on imported diesel has reduced the frequency of brownouts.
BenefitsBefore the Block Island Wind Farm was proposed, the New Shoreham Town Council had spent years advocating for a transmission line to mainland Rhode Island which would end Block Island’s dependence on loud, polluting and unreliable diesel generators by connecting them to the mainland grid. However, the high costs associated with building such a transmission line had been the primary barrier. As a result, when CBA negotiations began, the Town Council worked to ensure the wind project would finally connect Block Island to the mainland.
Key benefits of the Block Island Wind Farm CBA include:
More Affordable and Reliable ElectricityThe main benefit New Shoreham residents wanted was lower and more predictable energy prices. Block Island is now fully powered by the five offshore wind turbines, with just 10% of the wind farm’s capacity meeting all of Block Island’s electricity needs, and the remaining 90% exported to the mainland. This is a significant benefit: The project is estimated to reduce electricity rates by 40% for Block Island residents, who previously paid up to 4 times the electricity rates of the mainland. When the project was proposed, islanders were expected to each save $140 per month. No longer reliant on fluctuating diesel prices, residents have reported more stable electricity bills. One longtime resident credits the wind farm with greatly improving electricity reliability on the island, saying “It was really bad for the business community to have that kind of energy instability. It constantly surged and went up and down. As a business owner and somebody who lives [on Block Island], I’d much rather have stable energy and to know what my energy bill is going to be for the next month. Now the power isn't going out three times a year.”
Environmental QualityThe replacement of the five diesel generators that previously powered the island improved air quality, lowered emissions and reduced noise pollution. Those who lived near the generators — which were located less than half a mile from downtown New Shoreham — reported frequently having to scrub soot from their houses. The wind farm also eliminated the need to import 1 million gallons of diesel a year to supply the generators.
Infrastructure ImprovementsIn the CBA, Deepwater Wind agreed to fund infrastructure improvements at the spot on the island where the cable comes ashore. As a result, the developer funded the burial of some overhead utility lines. The town manager negotiated the inclusion of broadband fiber optic cables in the transmission line connecting mainland Rhode Island and Block Island for exclusive use by the town, adding an estimated $2.5 million in costs for the developer. Access to high-speed internet was revolutionary in the provision of services by schools, government offices and healthcare facilities.
Local EconomyIn addition to the CBA, Deepwater Wind signed a project labor agreement, guaranteeing approximately 300 jobs for 10 different building trade unions and 30 unionized contractors and subcontractors during project construction.
During the public engagement process, Block Island residents and fishermen raised concerns about the potential fisheries impacts of the wind turbines. Rhode Island mandated Deepwater Wind pay for a third-party study of fisheries impacts. No adverse impacts were found, and in fact the base of the wind turbines has created an artificial reef that has increased fish activity in the area, increasing opportunities for local fishermen.
Finally, the community also secured from Deepwater Wind two donations of around $1.25 million each to the local historical society and the Southeast Lighthouse Foundation to strengthen historic preservation and tourism vital to the island’s economy.
Oversight and EnforcementAccording to the terms of the CBA, if Deepwater Wind fails to remedy any issue that leads to costs being subsequently incurred by the town, the developer must reimburse the town. In the first year of operation, the transmission cable on Block Island came unburied. The developer quickly fixed the cable and covered all associated costs.
Deepwater Wind was acquired by Denmark-based Ørsted Energy in 2018. While not the original developer, Ørsted has continued to uphold the community benefits agreed upon between Deepwater Wind and the community. Ørsted has also continued to invest locally throughout the lifetime of its portfolio of projects and has demonstrated a commitment to community engagement and benefits in its own offshore wind development projects. For example, Ørsted's Sunrise Wind project, currently under construction in Brookhaven, New York, has committed $170 million over 25 years in exchange for the town hosting the project's onshore real estate and 18-mile cable route. These funds are part of a larger package of over $700 million in direct project investments into the county, which also includes union labor, local supply chain investments, $10 million to establish a National Offshore Wind Training Center, and $5 million for a research and development partnership with Stony Brook University.
Strengths of Block Island Wind Farm CBADeepwater Wind hired a trusted community liaison to facilitate communication between stakeholders. This liaison was a full-time resident on the island and well-respected by the local community. Having the liaison readily available to serve as a resource and provide information bridged the gap between the community and developer and ensured timely engagement. Through the liaison, residents were able to express key community needs and feel as though they were true partners in the process, with one interviewee saying: “My number one takeaway is to make sure you pick a local representative very carefully. Your future can rise or fall based on how that person is viewed in the community and how they represent you in the community. Bryan Wilson was a genius choice on their part. You need someone who understands science but who also loves the island. So he was looking out for the island in all the negotiations.”
Deepwater Wind agreed to fund third-party consultants to provide technical assistance to the town. The consultants were selected by the town to help negotiate a project agreement, educate the town on the technical aspects of the project and translate the community’s concerns into public comments during the permitting process. Over a two-year analysis of the environmental impacts of the wind farm, the consultants found that offshore wind did not have a harmful effect on birds, marine mammals and other flora and fauna due to its small footprint and the mitigation measures taken. This reassured the town about the project’s impacts.
Deepwater Wind’s consultation efforts were buoyed by Rhode Island’s pre-existing SAMP process. The state and Deepwater Wind hosted three years of community meetings to create a comprehensive plan for offshore wind in Rhode Island. Deepwater Wind met with local associations, agencies, elected officials, citizens and non-governmental organizations (NGOs) to inform them about the project and identify any early issues or concerns with the project. As a result of the SAMP process, offshore wind was a familiar topic for local leaders before Deepwater Wind proposed its project. The SAMP process identified the best areas for offshore wind development, preemptively avoiding conflicts with existing uses such as fishing, shipping or recreation. The early engagement with stakeholders helped build trust and reduce delays down the road for the Block Island Wind Farm.
Deepwater Wind provided a transmission line and other benefits that were tailored to the local community, which facilitated the ultimate success of the project. For the community, the most important benefits were the transmission and fiber optic cables connecting Block Island to the mainland and providing the island with high-speed internet. Improved access to secure, reliable and affordable energy is a crucial backbone for economic development, encouraging business growth and tourism.
Challenges and Gaps of Block Island Wind Farm CBAUntil hiring a liaison, the community felt that Deepwater Wind fell short in their engagement. The company hosted a few community meetings in which interviewed residents reported feeling they had little say in how the project progressed. The majority of negotiations took place between the Town Council and the developer, with one community member reporting that the company seemed to incorporate limited feedback from the community: “If the feedback wasn’t what they wanted to hear, it didn’t really go anywhere. Then they eventually hired a spokesperson once they realized we were not going to roll over.”
As a first-of-its-kind offshore wind project in the U.S., the Block Island Wind Farm had little precedent, with the community feeling ill-prepared to respond and actively participate in the development process. There were few other communities New Shoreham could reach out to for guidance on how to engage with the project. One interviewed resident recommended that future developers prioritize sharing more accessible information with laypersons not in the industry about the potential risks and benefits of offshore wind. Due to the complicated technology involved, residents felt underqualified to participate in the public engagement process, leaving it largely up to the Town Council to negotiate with the developer.
While not the case in Block Island, a change in project ownership can threaten existing CBAs. Fortunately, the sale of the Block Island Wind Farm to Ørsted did not significantly impact the implementation of agreed-upon community benefits. However, in other sectors there have been instances in which a verbal agreement between the developer and community has not been honored by a new owner, or where the CBA failed to include a successor clause, making it difficult to enforce after the project was sold. To avoid a sale affecting an agreement, the CBA can be tied to a project itself, rather than to a developer and include a strong successor clause.
Had the project location been different, Block Island likely would have faced stronger community opposition. Scholars credit Block Island’s success and relatively smooth approval process to Deepwater Wind’s decision to site the project near an island disconnected from the mainland power grid. Although the project faced some opposition from islanders, the pushback didn’t reach the same pitch as similar proposals nearby, such as a project off the coast of the more-populated Martha’s Vineyard. Were a different location chosen, additional concessions might have been expected from the developer. Instead, due to Block Island’s isolation, most residents were satisfied with Deepwater Wind’s commitment to fund transmission infrastructure to connect the island to the mainland and co-locate broadband internet access.
Further resources- Island Institute (2015) Engaging Communities in Offshore Wind Case Studies and Lessons Learned from New England Islands
- Smithsonian Magazine (2022) This Historic Community Is Pushing the Nation Toward a Wind Power Revolution
- Data for Progress (2023) Community and Labor Benefits in Climate Infrastructure: Lessons for Equitable, Community-Centered Direct Air Capture Hub Development
- Town of New Shoreham (2014) Cooperation Agreement
STATEMENT: UK's Ambitious Climate Plan Propels the Country to Net Zero and Sets Example for the World
LONDON (January 30, 2025) — Today, the United Kingdom put forward its ambitious new national climate plan, with a commitment to cut greenhouse gas emissions by 81% from 1990 levels and deliver a net zero economy by 2035.
First announced at COP29 in November, this target aligns with the UK's Climate Change Committee's advice and the UK's Climate Change Act to reach net zero emissions by 2050. The UK is the sixth country to submit its new plan, also known as its Nationally Determined Contribution (NDC) under the Paris Agreement, ahead of the UN deadline of February 2025.
Following is a statement from Edward Davey, Head of World Resources Institute's UK Office:
“The United Kingdom has laid out a clear, detailed plan to reduce its greenhouse gas emissions, dial down fossil fuels, power up clean energy, and reform food and land use. Key commitments — such as exploring a ban on new fossil fuel exploration licenses, ending petrol car sales by 2030, which is five years earlier than the EU, and accelerating renewables — show that the UK means business on climate action. The UK's NDC is an encouraging sign of leadership, especially following the US’ step back, and will hopefully catalyze a new wave of ambition from other countries.
"The plan puts people at the heart of the climate transition, which is key for its long-term success. It will lower electricity bills, increase innovation, and build a strong future for the country with jobs in emerging industries. In an increasingly uncertain world, it strengthens the UK’s resilience to a changing climate and helps provide long-term energy security.
"The UK’s reaffirmation of its £11.6 billion international climate finance commitments for 2025–2026, including £3 billion for nature, is reassuring amid global aid budget pressures. This funding will be key to the success of initiatives such as the Global Clean Power Alliance and the UK’s ongoing work to address tropical deforestation in partnership with forest nations.
"While today’s announcement is impressive, attention now turns to the 6th Carbon Budget Delivery Plan, which is expected to provide detailed guidance for delivering the NDC. Critical decisions remain, particularly on aviation, biofuels, diets and farming. The government's stance on new oil and gas licenses — aligned with commitments first made at COP26 at Glasgow — will be closely watched.
"In the coming months, it will be vitally important for the UK government to follow up on today’s ambitious NDC with clear policy signals, concrete delivery plans, and budget decisions aligned with the commitments set out today.”
National Climate Action United Kingdom Type Statement Exclude From Blog Feed? 0Climate Finance Is a Top Story to Watch in 2025
For more than 20 years, WRI has identified annual “stories to watch.” These are the year’s moments, issues and decisions that we believe will shape the future trajectory of the world. In the past, we’ve highlighted things like dangerous heat in cities, major elections and their effects on geopolitics, food system reform and more.
This year is different. There aren’t stories to watch in 2025. There’s just one — but it affects everything from climate action to nature conservation to human rights. It’s a story that too often flies under the radar despite vast implications for the future of life as we know it.
Watch Ani Dasgupta on the Stories to Watch in 2025
It’s climate finance — and this year is a bellwether of the world’s ability to provide it at scale.
2025 Is the Year to Care About Finance for Climate and NatureAt last year’s UN climate summit (COP29), wealthy nations agreed for the first time in 15 years to increase the amount of money they provide for climate mitigation and adaptation in developing nations. The new target — $300 billion annually by 2035 — is better than the previous goal of $100 billion a year by 2020. But it’s still a far cry from what’s needed. That’s why leaders from all nations also agreed that all actors should work together to mobilize $1.3 trillion per year by 2035 for the countries most vulnerable to the impacts of climate change.
This $1.3 trillion recognizes the gap between what developing nations can realistically provide domestically for things like clean energy development and climate-smart agriculture, and what will be needed from external sources. It will be extremely difficult to secure the $1.3 trillion. But make no mistake: We must do it.
We know what will happen without adequate climate finance: Resource-strapped communities will suffer the most from increasingly devastating droughts, floods, wildfires and heatwaves, even though they’re least responsible for causing the problem. That’s why delivering the $1.3 trillion isn’t just about finance — it’s about justice.
We also know that without significant emissions reductions from all nations — wealthy and developing alike — the world will not meet its decarbonization goals, exposing everyone to the existential crisis that is climate change. Finance from richer countries to developing ones isn’t charity; it’s an investment in a safer world.
Finally, ambition and finance are two sides of the same coin. You can’t get ambitious nature and climate policies without the finance to execute them. Finance and ambition are a virtuous cycle — and this is the year to unlock both.
So let’s dive deep into what’s needed to achieve the $1.3 trillion goal, and what to watch this year to see if it’s coming to fruition.
1) What’s the Money For?In short, the $1.3 trillion must support two goals: building resilience in developing nations while also securing their low-carbon growth.
The effects of climate change are growing ever-more costly and dangerous, but the risks aren’t evenly distributed. Vulnerable nations — those with the fewest resources to respond — are projected to face more than half a trillion dollars in climate-related damages every year by 2030. Meanwhile, finance for building resilience remains paltry, with a $360 billion gap between what’s needed and what’s provided every year. Of the adaptation finance that is flowing, less than one-fifth reaches the communities who need it most.
That must change.
At the same time, both low-income and growing nations need support to move beyond fossil fuels while also creating jobs and improving lives. Many low-carbon shifts will come with considerable benefits, such as cleaner air and energy security. But it will take finance to make sure they happen at the speed and scale necessary and in a way that benefits all people — including those employed by the fossil fuel industry. For example, investments in the clean energy sector in developing countries need to increase by around 7 times by 2035, according to the International Energy Agency.
Answers to a few questions this year will show us whether the world is achieving these twin goals for climate finance:
- Will negotiators at the next UN climate summit (COP30) commit to at least doubling adaptation finance from $40 billion to $80 billion per year?
- Will the Loss and Damage Fund established in 2023 start disbursing funds?
- As part of the global Paris Agreement on climate change, countries agreed to submit new national climate plans in 2025. Will they be ambitious on both mitigation and adaptation, and come with clear investment plans?
$1.3 trillion may sound like a lot of money, but not when you put it in perspective: Using the International Monetary Fund’s average annual GDP growth rate of 2.8%, it’s less than 1% of projected global GDP in 2035.
The $300 billion climate finance target can be met in three ways: bilaterally, where donor countries give directly to recipient nations; multilaterally, through development banks (MDBs) like the World Bank and multilateral climate funds like the Green Climate Fund; and through leveraged private finance. It’s essential that a good chunk of this finance comes in the form of grants, concessional finance and low-cost loans, so as not to add more debt to vulnerable nations, many of whom already face debt distress. Restructuring debt and debt-forgiveness are also important for the $300 billion to make the most impact.
Getting from $300 billion to $1.3 trillion will be much harder, but it is doable if many pieces of the puzzle come together. Capital increases at MDBs, which are very good at turning $1 of taxpayer money into $4-$10, are a good first step. Building on that, taxes on polluting sectors like aviation, maritime shipping or oil could add more than $200 billion. Innovative sources of finance, things like debt-for-nature swaps or carbon markets will be challenging, but essential. And at least half of the $1.3 trillion will need to come from the private sector.
Progress this year will depend on a few factors:
- Will member countries increase their funding to the MDBs, despite political headwinds?
- Will the concept of international taxes gain traction? The International Maritime Organization is considering a carbon levy on shipping, while countries like Kenya, Barbados, France and Brazil have set up a task force to examine potential international taxes.
- Will leaders use June’s Finance for Development Conference to advance global finance reform and bring together climate, nature and development finance?
- Will the U.S. government’s new freeze on almost all foreign assistance, including all climate finance, ultimately proceed, and what repercussions will it have?
Even if experts agree that half of the $1.3 trillion needs to come from private capital, it will be difficult to make this amount flow to the right places. Low-carbon investments in developing nations are still considered to be risky and expensive. For example, a solar project in Germany would require 8% in equity returns; the same project in Zambia would require 51%. While institutions like the World Bank use financial instruments like guarantees to “de-risk” these investments, they simply cannot be deployed to upwards of $700 billion in private climate finance per year by 2035.
The key, then, is to use smart public policies to unlock the levels of private investment needed.
We’ve seen some examples of this, with China’s green industrial policy, the U.S. Inflation Reduction Act, and India’s expansion of clean energy. India set ambitious renewable energy targets and a clear roadmap, subsidized electric transport and charging infrastructure, invested significant public resources into renewables, and advanced innovative financial instruments like green bonds, all of which boosted the private sector’s confidence in low-carbon investments. These kinds of measures, as well as public-private partnerships, are essential for de-risking investments and attracting private capital.
Signals to watch for this year include:
- Will we see the emergence of more “country platforms,” country-driven initiatives that aim to align public and private capital behind priority investments that benefit climate and nature? Colombia is the latest country to launch such a platform—will other nations follow suit?
- Will backlash against ESG initiatives like the Net-Zero Banking Alliance slow climate investments, or will a growing number of national net-zero targets and corporate climate risk disclosure mandates drive green investment?
- Will we see progress at upcoming conferences like Finance for Development and the Finance in Common Summit? Welcomed outcomes would be a reassessment of how investment risks are calculated, as well as development banks embracing climate- and nature-related investments as their central mission.
We can’t fight climate change without safeguarding nature. Trees, healthy soils and the ocean sequester vast amounts of carbon dioxide. Healthy forests regulate rainfall, reduce erosion, provide clean water and support many other ecosystem services. Some estimate that a whopping 55% of global GDP depends on nature.
And yet economic incentives continue to drive ecosystem destruction. According to WRI’s Global Forest Watch initiative, the world loses 10 football fields of tropical primary rainforest every minute.
This is where the financial innovation mentioned earlier can play a role.
Yes, economies currently value nature’s destruction more than its preservation. But creative finance can change that. For example, the proposed Tropical Forest Forever Facility, or TFFF, would pay countries $4 for every hectare of forest conserved while taxing them $400 for every hectare destroyed. Conceived of by the Brazilian government and World Bank, the initiative would use an initial $25 billion from wealthy nations and philanthropies to attract an additional $100 billion in private finance. All investors would see a return after 20 years that’s slightly higher than a government bond.
And that’s just one example. Innovations like land banks, debt-for-nature swaps, carbon markets — all paired with better policies, standards and regulation — can bring much-needed finance toward nature conservation that’s good for people and the climate.
Areas of progress to watch for this year include:
- Will the TFFF initiative move from idea to reality?
- Will national leaders return to the UN biodiversity conference in February and hammer out a global nature finance deal?
- Will new integrity standards and increasing government support boost investor confidence in high-quality carbon markets?
- Will debt-for-nature swaps, where wealthy nations and institutions forgive nations’ debt in exchange for conservation, become more common? Ecuador is currently using one-such measure to protect Galapagos National Park, promising to spend $17 million in conservation over the next 18 years in exchange for debt forgiveness.
- Will more governments redirect harmful agricultural subsidies toward nature-friendly practices, as Denmark and the UK have recently done?
I hope by now I’ve made it clear why mobilizing $1.3 trillion for climate action in developing nations is essential. But it is hardly a done deal. While one element of the $1.3 trillion can leverage and mobilize another, today, the different pieces are governed by entirely different regimes. Getting them to come together as one cohesive puzzle will be hard.
That’s why the biggest thing to watch in 2025 is how the world brings all these components together —especially at key forums like the UN climate summit and G20 meetings. For maximum leverage and efficiency, we need to draw on all sources of finance and make them work together as a system. That will require the deep involvement of finance ministers —and even heads of state — from countries across the world.
As we step into 2025, it’s clear that our financial systems must be reimagined to tackle climate change, protect nature and improve people’s lives. This transformation won’t be easy, but there are many tools to get us there. By demanding bold steps from our leaders, leveraging limited resources to make maximum impact and harnessing innovation, we have the power to unlock financial flows to some of the world’s most pressing challenges.
Will we see the beginning of this transformation this year? I, for one, will be watching.
climate-finance-stories-to-watch-2025.jpg Finance stories to watch climate finance Climate Finance biodiversity development Type Commentary Exclude From Blog Feed? 0 Projects Authors Ani DasguptaTurning Promises into Progress: Lessons from Campinas’s Climate Action Plan
Cities are at the forefront of climate impacts, and city governments are key actors in unlocking action to build urban resilience and reduce greenhouse gas emissions. In recent years, the number of cities and regions committing to climate action and net zero has increased significantly, but many of them are struggling to translate that ambition into action at the necessary pace.
Campinas, Brazil. Photo by Carlose BassanCampinas, Brazil is a good illustration of how cities are working to integrate urban climate action into all aspects of city life. Campinas has also demonstrated how to enable rapid implementation through a focus on three essential elements: making climate action about people, prioritizing an integrated implementation and getting the right people together.
Campinas’s Local Climate Action PlanCampinas is a sunny city in southeastern Brazil, and home to over 1 million residents. As with many cities worldwide, it is pioneering sustainable urban development that addresses the climate emergency.
In June 2024, the Campinas city government launched its Local Climate Action Plan (PLAC). Scientific evidence and extensive engagement underpinned the creation of the plan, which lays out 20 actions and 96 sub-actions the city government will take to reach its goals of becoming a climate-resilient community, achieving net-zero greenhouse gas emissions by 2050 and creating multiple benefits for climate, people and nature.
Strategic Objectives of the Campinas Local Climate Action PlanCampinas’s plan also includes several unique aspects that set it apart from other city-level climate action plans.
An Integrated, People-Centered ApproachThe development of PLAC reflects the city's approach to climate action which connects climate priorities with nature and, critically, people. It communicates an understanding that climate action must put community at the center, and focus on enhancing quality of life for current and future residents.
In the Campinas process, an important starting point was identifying existing policies — plans in areas such as mobility, housing and civil defense — that contribute to climate-related objectives, even if not explicitly labeled as such. A group composed of city officials (supported by WRI) then brought together stakeholders, including a wider city-level multi-departmental group, for workshops to explore how to build on initial momentum and identify opportunities to raise ambition or develop new measures. They later assessed these measures against updated evidence on future climate hazards and greenhouse gas emissions, which allowed them to come to a final list of key and urgent integrated climate actions.
Campinas city officials and WRI Brasil staff members participate in a workshop.This approach treated climate action as an intrinsic part of urban development and city systems, rather than as an isolated effort. As a result, the plan is structured around five pillars, or axes, which collectively outline how Campinas must transform its urban systems. Officials designed actions and sub-actions to achieve synergies between adaptation, mitigation, social inclusion (including bridging the urban services divide) and the restoration of natural ecosystems. They also considered and analyzed tradeoffs.
The axes of Campinas Local Climate Action Plan embody the urban transformations the city wants to achieve for climate resilience, mitigation and improving conditions for both people and nature.
A Roadmap for Early ImplementationThe process in Campinas was guided by the belief that the timely realization of some aspects of climate action plans — such as unlocking funds, building technical capacity, modifying or creating related laws, regulations and policy and engaging stakeholders and citizens — can enable faster implementation.
Campinas considered PLAC’s actions in this context, leveraging the expertise of a multidisciplinary group. As the final step in developing the plan, the city created an innovative roadmap that identified roughly 130 short-term activities necessary to unlock action. This roadmap serves as a practical guide for the city team, outlining important steps to ensure feasibility with a focus on the 2032 horizon. Beyond detailing what needs to be done, it also lists the secretariats responsible for each action and important conclusion dates.
For example, the climate action plan includes a series of measures for promoting active mobility in order to transition the Urban Mobility and Sustainable Transport Systems. One measure is the expansion of 150 km of cycling infrastructure in Campinas by 2030, which involves the installation of drinkable water stops and developing shaded areas in key public areas of the city to protect cyclists from the extreme heat. To unlock this, the team mapped necessary short-term steps, including establishing guidelines for the implementation of cycling infrastructure, a priority activity for 2024 that the city team has been actively working on. Other important next steps include:
- Engage and hold a dialogue session with cycling associations, entrepreneurs and municipal authorities involved with cycling infrastructure by June 2025
- Ensure the provision of financial resources in the municipal budget by December 2025
- Revise the Municipal Cycling Plan and include necessary changes, by 2027
Comprehensive climate action requires the right people come together to make decisions. Acknowledging the importance of governance, Campinas’s officials didn’t wait for the planning process to introduce a decree that created the Municipal Committee for Coping with Climate Change Impacts (Climate Committee). And, with the support of the city’s mayor, it was operational before the PLAC was completed. This avoided a governance gap between planning and implementation, and helped to quickly put the plan into action.
Campinas’s Municipal Committee for Coping with the Impacts of Climate Change
Management Group
(DELIBERATIVE)
Technical Group
(CONSULTIVE)
Thematic Chambers
(PARTICIPATIVE)
Climate Emergency Group
Municipal government holders in portfolios linked to climate issuesTechnical representatives from involved municipal agenciesRepresentatives of civil society, including from academia, trade unions, business, popular and third- sector entities
Linked to the Municipal Civil Defense to respond to extreme events and support the Management Group in decision-making
Campinas’s Climate Committee’s forward thinking allows participative spaces where multiple actors can come together to debate topics around climate change and PLAC implementation. It also predicts the creation of permanent groups looking at specific topics or sectors, known as thematic chambers. They gather through meetings where businesses, NGOs, academia and vulnerable communities are actively involved in debating and expanding climate action. This is a public recognition that climate action is a shared responsibility, and acknowledges that the city government alone cannot drive city-wide change.
Implementation and the Road AheadIn the six months that followed the decree publication, Campinas’s city team has kept the momentum going by engaging other levels of government, departments and civil society stakeholders in the plan’s implementation. Further research is needed to assess the impact of specific actions and to better understand the barriers and enabling factors.
A significant outcome so far has been the city’s increased visibility as a leader in local-level climate action, both nationally and internationally. Notably, the mayor of Campinas attended COP29 in Azerbaijan, where he participated in debates on multilevel climate governance and sought partnerships to advance PLAC implementation. The timing has been important, as Brazil's updated 2025 nationally determined contribution, or NDC, highlights the importance of collaborating with cities and subnational actors, building on its endorsement of the Coalition for High Ambition Multilevel Partnerships (CHAMP) for Climate Action.
As for critical next steps, Campinas is prioritizing unlocking finance, starting with its own municipal budget. This effort includes aligning PLAC targets to the city’s financial planning and budget cycle, with particular emphasis on the Multi-Year Plan, known as the PPA in Portuguese, for 2026–2029, which it will draft in 2025. Integrating climate action into city financial decision-making and budgeting helps to embed climate priorities into the work of all departments and government agencies.
Through the Campinas Local Climate Action Plan, we see a positive example of how a city is turning promises into progress, unlocking climate action, and building a future where people, climate and nature are at the heart of urban life.
WRI Ross Center for Sustainable Cities has closely supported the city of Campinas in the elaboration of its Climate Action Plan. Our team provided technical support over 15 months for the “Rapid Roadmap for Integrated Climate Action,” a scalable approach that was piloted with the city. WRI Brasil has a long-standing relationship with Campinas. Since 2017, the team has provided technical support to urban mobility, nature-based solutions, biodiversity and forest conservation and restauration projects. In 2025, WRI Brasil will continue to support the city with technical support for the implementation of the PLAC, focusing on climate finance, electrification of the bus fleet and studying the link between local health and extreme heat.
campinas-city.JPG Cities Latin America Climate Cities National Climate Action climate change Type Project Update Exclude From Blog Feed? 0 Projects- Cities4Forests
- Integrated Climate Action
- Urban Efficiency & Climate
- Urban Development
- Coalition for High Ambition Multilevel Partnerships (CHAMP) for Climate Action
Inclusive Finance Can Deliver Climate Funding into the Hands of People Who Need It Most
People around the globe are feeling the effects of climate change, but not all to the same degree. The world’s poorest are often hit hardest, from unrelenting drought in East Africa to deadly heatwaves in South Asia and severe flooding in South America.
Financing is essential to address these impacts. Adaptation strategies like buying drought-resistant seeds and installing irrigation to stabilize crop harvests, or reforesting and building seawalls to protect homes against floods, all require that people can save and borrow enough money. Coping with the aftermath of a storm or fire often involves relying on savings, insurance or remittances sent by family members. Replanting after a drought can be made easier by payouts from rainfall insurance. Getting access to clean energy often requires up-front investments to build power lines, install solar panels or switch to electrical appliances.
The low-income people on the frontlines of the climate crisis often don’t have access to these kinds of financial products. And when they do, the finance typically isn’t designed with climate risks or climate resilience in mind.
At the 2024 UN climate summit in Baku, Azerbaijan, governments agreed to triple the amount of financial support for climate action in developing countries, to at least $300 billion annually by 2035. But with global conversations focused on ramping up climate finance overall, an equally important question also needs to be answered: How can we get more of this finance to the individual people and communities that need it the most?
Inclusive finance could offer answers.
What Is Inclusive Finance?Inclusive finance refers to efforts to expand access to everyday financial services — such as savings, credit, insurance, payments and remittances — as a way to reduce poverty and foster development. This involves tailoring financial products so they better meet the needs of low-income people — for instance, by offering microloans or microinsurance to clients who are poorly served, if at all, by mainstream banks.
Over the last half-century, this idea has developed into a large and vibrant ecosystem for delivering financing from commercial funders, impact investors, governments, humanitarian organizations and others to people in need. The inclusive finance sector now includes nearly 5,000 financial institutions in 147 countries that have extensive networks in low-income communities and understand their financial circumstances.
Using Inclusive Finance for Climate ActionThis established system can offer a way to channel climate finance already flowing into developing countries directly to poor and vulnerable populations. Currently a relatively small amount of climate finance — less than one-fifth — ends up in the hands of local actors, in part because climate funders have found it challenging to deliver funds to the individual and household levels. Inclusive finance providers can help tackle this challenge by reaching vulnerable populations and offering services designed specifically with these people in mind.
The sector can also help mobilize urgently needed private capital for climate action. Global lending by inclusive financial services providers amounts to over $180 billion annually , and some of these resources could be channeled toward climate action at the grassroots — if financial institutions can work with clients and climate experts to develop solutions that work on the ground.
Early Examples Show the Way ForwardEarly attempts are showing that financial innovation for climate impact can yield powerful results.
For example, the pay-as-you-go solar sector has enabled 490 million people , typically in low-income households, to access clean electricity from household solar kits that they could not afford to buy outright.
In Bangladesh, BRAC (one of the world’s largest microfinance lenders) created a contingent line of credit that offered farmers guaranteed access to emergency loans in the case of severe weather events like floods. Unlike insurance, the credit line didn’t require any payment upfront; farmers only paid if they needed to borrow from it. This added level of security gave farmers the confidence to invest in expanding their crop production despite climate risks. Most farmers suffered no flooding and never needed the credit, but saw substantially higher yields and incomes as a result of the higher investment. Farmers who were hit by floods and used the line of credit were better able to cope and saw lower reductions in household consumption as a result of the shock.
In India, the Self-Employed Women’s Association (SEWA) developed a heat index insurance product that triggers automatic payouts when it is too hot to safely work. The plan — targeted at informal workers like street vendors, construction workers and waste pickers, who may not have full workplace protections — has already generated payouts for tens of thousands of low-income women when temperatures rose to dangerous levels, allowing them to stay home without worrying about lost income or exposing themselves to major health risks.
The world needs far more of this type of innovation. Most financial institutions serving low-income people still offer standard savings, loan and insurance products, which aren’t always a good fit for the climate adaptation and resilience strategies they need to pursue. This deprives people of the ability to fully participate in global climate action and protect themselves from the implications of climate change.
Much More Attention and Innovation Are NeededAll of this represents an opportunity for the climate agenda as well as for inclusive finance stakeholders — if the two sectors can come together around the shared challenge of climate change.
Far more innovation is needed to fully align inclusive finance behind the climate effort, including, for example, on how to best provide anticipatory finance before climate disasters strike. Further experimentation could also build richer and more nuanced global knowledge on which types of financial services are most effective at driving climate action at the local level in particular contexts.
Clearly, inclusive financial services also have their limitations. Loans are not appropriate for every situation and could end up doing harm if deployed in an unscrupulous or careless manner. Climate insurance is difficult and increasingly expensive, sometimes prohibitively so. Many climate investments, such as those in more resilient infrastructure or public transportation, are necessarily large-scale and will continue to require big ticket projects by governments and their development partners.
Nevertheless, there’s a big opportunity for inclusive finance to foster local empowerment and drive grassroots climate action in low-income communities worldwide. To unlock this potential, governments should commit to getting a certain share of climate funding directly into the hands of affected people, including through inclusive financial services, to give them agency over their own climate action.
Meanwhile private actors, including financial institutions and their funders, should substantially increase their investments in developing and scaling better inclusive finance solutions to support resilience and inclusive green technologies. They should also integrate consideration of climate risks and opportunity into all their services.
And above all, people and organizations working in climate change and financial inclusion should make it a priority to start collaborating on this shared and critical agenda.
Taking these deliberate steps can help ensure that climate finance is not only large enough to tackle the enormous challenge, but inclusive enough to meet the needs of all people on our warming planet. As global climate finance discussions build on the high-level agreement in Baku to develop a more detailed climate financing agenda at the next UN climate summit (COP30 in Belem, Brazil), inclusion should be at the heart of the agenda.
Indian-street-vendors-min.jpg Finance climate finance Equity & Governance Type Commentary Exclude From Blog Feed? 0 Authors Peter Zetterli Gaia Larsen Edward DaveySome California Oil Refineries See a Future in Biofuels. Here’s Why That’s Problematic.
In many ways, California is leading the transition away from fossil fuels in the United States. The state has established a legal requirement to eliminate 85% of its greenhouse gas emissions by 2045 and enacted several policies aimed specifically at reducing transportation emissions, all while incentivizing electrification. Gasoline demand in the state has been dropping — a trend expected to continue.
And while California is also looking into how to move away from petroleum fuels, some demand will persist for gas- and diesel-powered vehicles, aviation and rail and marine transportation. With no official transition roadmap in place, that means the future of the state’s many oil refineries — and the workers and the communities they support — holds some uncertainty.
California still has the third-largest oil-refining capacity in the U.S., but low-carbon shifts will send refineries on three potential trajectories: Some will shut down permanently, some will remain in business for as long as possible and others might look to convert their operations produce bio-based diesel.
That third path is riddled with challenges and carries with it serious implications.
Over the last several years, state and federal policies that treat biofuels as beneficial to achieving decarbonization targets have driven a rapid increase in the production and consumption of bio-based diesel. And, to date, at least three petroleum refineries in California have pursued conversions.
But with a limited supply of sustainable feedstocks as well as uncertainties around pollution and impacts on workers and communities, a shift to “biorefineries” by some oil refineries could be misguided and requires careful consideration.
A Closer Look at Bio-Based DieselBiofuels account for about 6% of the energy used for transportation in the United States. Yet, between 30% and 40% of the nation’s corn supply and 40% to 50% of its soybean oil supply go toward biofuel production, underscoring the vast quantity of crops used to produce only a small fraction of the country’s transportation fuel.
A Biofuel Glossary
Biofuel: A category of liquid fuels made from biomass feedstocks.
Biodiesel: Created when petroleum diesel is blended with vegetable oils (such as soybean oil), animal fats or recycled cooking greases. Biodiesel is not a drop-in fuel, meaning its use is limited to compatible vehicles.
Renewable diesel: A hydrocarbon biofuel that is chemically equivalent to petroleum diesel and can be made from the same feedstocks as biodiesel. Unlike biodiesel, it is a drop-in fuel and can be used interchangeably with petroleum diesel due its chemically similar properties.
Bio-based diesel: An umbrella term for fuels that derive from animal fats and vegetable oils. Both biodiesel and renewable diesel are considered forms of bio-based diesel.
Sustainable Aviation Fuel: Non-fossil alternatives to traditional jet fuels that can be created through a variety of processes. These fuels may not actually be sustainable if they use feedstocks that do not reduce emissions.
In the last two decades, biofuel production in the U.S. has more than tripled, and biodiesel and renewable diesel consumption has grown drastically over the past decade. The consumption spike of bio-based diesel has been particularly prominent in California, which consumes half of the nation’s entire supply. Although the state’s overall diesel use only accounts for 7% of the country’s total, bio-based diesel makes up more than 70% of California’s overall diesel consumption. By contrast, bio-based diesel accounts for only 3.8% of diesel consumption in the rest of the United States.
Climate Dangers of Bio-Based DieselSome policies, such as the California Low Carbon Fuel Standard (LCFS), treat bio-based diesel as beneficial for achieving decarbonization targets, citing emissions-reduction benefits. But such calculations don’t tend to account for the fuel’s full greenhouse gas impacts. When bio-based diesel requires the dedicated use of land to grow crops for fuel, it displaces crops for food, which in turn drives emissions from agricultural expansion to meet rising global food demand. When these impacts are fully accounted for, studies show that bio-based diesel is not only more emissions-intensive than fossil fuels, but that it also increases food prices.
Using waste fat, oil and grease feedstocks in the production of bio-based diesel can offer greenhouse gas benefits when they are true wastes that would otherwise be landfilled. In many cases, however, such waste feedstocks are residues or by-products that already go toward the production of other commodities, such as pet food. When the use of these feedstocks for fuels displaces those uses, it can drive up the production of virgin oils to meet demand and negate emissions reduction benefits.
Why Are Some of California’s Petroleum Refineries Converting?Across the U.S., the number of refineries converting their production from petroleum to biofuels is on the rise: Such conversions more than doubled between 2019 and 2022. California is leading this shift. At least three of the state’s 11 gasoline refineries — Phillips 66 in Rodeo, Marathon in Martinez and another refinery in Bakersfield — have completed conversions, or have announced plans to convert, to renewable diesel fuel production since 2022.
Others, meanwhile, have shut down operations entirely, citing market dynamics and low profitability as key drivers for their decision.
Several factors are influencing refineries’ decisions to convert.
The California Low Carbon Fuel Standard and the federal Renewable Fuel StandardCalifornia’s LCFS and the federal Renewable Fuel Standard (RFS) both provide key incentives that are driving the increased production of biofuels in California.
The LCFS is designed to reduce emissions from the transportation sector and transition the state to low- and zero-carbon fuels. Producers can earn financial credits if their fuel lowers emissions compared to the carbon intensity standard, which becomes more stringent over time.
In line with California’s primary objective to phase out combustion vehicles, the LCFS program has helped support transportation electrification, generating about $4.3 billion for electric fuel pathways. However, the vast majority of the value generated has gone toward combustion-based fuels, particularly biofuels, subsidizing fuel substitution instead of electrification.
Despite the studies showing that biofuels made from crops do not provide climate benefits — and instead increase emissions relative to fossil fuels — the LCFS still issues emissions reduction credits to biofuels. The standard’s calculation methods for determining the carbon intensity of fuels from purpose-grown crops underestimate land-use change due to food-crop displacement. While a majority of California’s bio-based diesel has historically been made from waste products like used cooking oils, which can provide greenhouse gas benefits, virgin vegetable oil from purpose grown-crops has entered the market at a dramatic increase since 2021.
This means that many LCFS credits issued for biofuels increasingly do not represent real emissions reductions. This spike in bio-based fuel credits has also led to a stark decline in credit prices, a reality that some have characterized as the crowding out of support for electrification-based credits.
The LCFS’s over-incentivization of biofuel production is caused by a trio of factors: the program’s lack of a cap on bio-based oil, the artificially low carbon intensity scores it assigns to these fuels and its interaction with the federal Renewable Fuel Standard (RFS). Under the RFS, fuel producers are required to buy and blend biofuels into petroleum-based fuels. California has become an especially attractive place for renewable diesel producers to meet these requirements due, in part, to the additional economic boost that the LCFS provides.
Renewable diesel available at the pump at a California gas station. State and federal policies have incentivized renewable diesel production in California. Credit: Sipa USA/Alamy Stock PhotoIn November 2024, the California Air Resources Board voted to update the LCFS to limit the amount of bio-based diesel fuels from virgin crop oils to 20% of each company’s bio-based diesel production. While the move is a step in the right direction, loopholes like the exemption of existing facilities from the limit until 2028 make clear that additional action is needed to discourage the continued growth of such fuels in California.
While experts have repeatedly pointed out that these policies have encouraged the conversion of petroleum refineries to biofuel in California, and refineries themselves have been vocal about the economic incentives and general profitability of converting, it remains unclear whether this growth trend will continue.
Other factors influencing the decision to convertPetroleum refineries’ size may be a deciding factor in whether they choose to convert to biofuel production. Bigger refineries are more likely to survive the decline in petroleum demand and, therefore, more likely to continue with business as usual. Smaller refineries, on the other hand, are more likely to shutter operations entirely if faced with economic difficulty. Refineries at risk of closure, however, will likely not go down without a fight, and may see conversion as a means to keep operating.
Logistically, smaller refineries may be better suited for conversion because the limited supply of true waste feedstocks aligns more closely with their capacity needs. The decision to convert, however, may be limited by the availability of these feedstocks at sufficient scale, since most waste feedstocks already go toward the production of non-fuel commodities.
Smaller refineries may also see conversion as a strategy to delay the expensive and complicated process of decommissioning, and to prevent stranded assets for their shareholders. So far, such extensions of facilities’ lifespans have only been possible and profitable because of the LCFS, RFS and other subsidies from tax credits. Without them, the refineries would likely close permanently since biofuel production is not profitable without subsidies.
Several indicators suggest that conversions could begin to slow down. While limited waste feedstock supplies could encourage refiners to tap into the supply of virgin oils, global markets could limit the economic feasibility of greatly expanding soy production for oil. Additionally, the uncertain future of the RFS requirements could lead to fewer incentives to produce bio-based diesel in the future. Time will tell how these factors will influence California refiners’ decisions around conversion. In the meantime, the immediate impacts of biorefinery conversions and the role they play in the energy transition more broadly need to be closely scrutinized.
Impacts of Refinery ConversionsThe uptick in refinery conversions is problematic due to both the increased production of crop-based biofuels and the negative impacts tied to the operation of the biorefineries themselves.
Greenhouse gas emissions & feedstock availabilityBio-based diesel in California has historically been made from wastes and residues such as used cooking oil and animal fat. If these feedstocks would otherwise have gone to waste, using them to create bio-based diesel can provide fuel that is less emissions-intensive than fossil fuels. But because the LCFS and the federal RFS have created powerful incentives, production of biofuel has increased dramatically and outpaced the available supply of waste fats, oils and greases.
Moreover, many of these feedstocks are not truly wastes because they already help produce non-fuel products. Even when feedstocks are sold as wastes, research has shown that global tracking and documentation are not sufficient to ensure that they are truly wastes, not virgin vegetable oil.
To meet increased bio-based diesel demand, refineries would increasingly need to use virgin vegetable oils such soybean oil, produced from soy crops grown on prime agricultural land, the use of which has risen dramatically over the past few years.
When food crops are diverted to fuel, land elsewhere must be cleared to meet growing global demand for food. When forests or grasslands are cleared to create cropland, large amounts of carbon held in plants and soils are released to the atmosphere. The global market for soybean oil is also tightly connected to markets for other vegetable oils including palm oil, which further drives global deforestation and related emissions abroad. As soybean oil is diverted to fuel production in the United States, the demand for vegetable oil in food products and cosmetics could be substituted for products such as soybean oil in Brazil or palm oil in Indonesia, both directly linked to recent deforestation.
Health and safety concernsThe pollution directly tied to the biofuel refining process is another important concern. Residents near California’s Rodeo biorefinery, for instance, have spoken out about the expected increase in pollution from the surge in traffic traveling through the area’s densely populated communities. Two lawsuits brought by local environmental groups against the County of Contra Costa alleged that the environmental review processes for the biorefinery had been faulty, and raised concerns about the health impacts of pollutants like volatile organic compounds and particulate matter that the biorefinery would release.
Some California-specific research indicates that flaring by converted biorefineries would also result in nearby communities’ acute exposure to episodic air pollution. These communities are predominantly populated by people of color who have been historically and disproportionately burdened by such exposures. Converted biorefineries’ potential to continue adding to pollution risks and impacts therefore has significant environmental justice implications.
What’s more, the research suggests that refining biomass could increase the risk of explosions and fires, threatening the health and safety of workers and communities. The U.S. Chemical Safety Board opened an investigation in 2023 after a fire broke out at the Martinez biorefinery and seriously injured a worker.
Comprehensive research on the pollution impacts of large-scale renewable diesel processing is still limited, but one recent study found that biofuel refineries across the U.S. release as much, if not more, hazardous air pollutants than petroleum refineries.
Impacts to workers and on revenuePhillips 66 recently announced that when its Los Angeles refinery closes in the fourth quarter of 2025, it will lay off 600 employees and 300 contractors. Such closures not only lead to the loss of well-paid jobs, but also to the loss of local tax revenues in the communities that hosted the refineries. Retrofitting an oil refinery to produce biofuels may therefore seem like a good strategy to help preserve jobs and tax revenues.
However, the assumption that converting to biofuel production would offer relief to local communities and workers needs to be investigated further, especially given the significant uncertainty about the lifespan of biofuels facilities. California’s 2022 Scoping Plan intends for biofuels, and renewable diesel in particular, to be a bridge fuel until electric or hydrogen-powered trucks make it obsolete. These retrofitted facilities may provide short-term opportunities for workers, but their long-term trajectory is unclear.
Similarly unclear is whether biorefineries can absorb all of the displaced oil refinery workers and/or whether they can generate similar levels of tax revenues as an oil refinery.
Oil refineries typically have a much larger capacity than biofuel facilities, which can produce between 5,000 and 15,000 barrels per day (bpd) — a fraction of the hundreds of thousands of crude that oil refineries can process in a day. The biorefineries’ smaller size and limited production could impact the workforce numbers, but other factors, including a company’s unique workforce strategy, could also play a role.
An oil refinery in Cheyenne, Wyoming, offers a helpful illustration. When it announced in 2020 that it would convert from processing crude oil to producing renewable diesel, its capacity was 52,000 bpd. The refinery also announced it would lay off about 200 workers over 18 months as it made the conversion. Today, that biorefinery has a capacity of 6,000 bpd and employs 80 people, suggesting that capacity reduction is one reason for its post-conversion decreased workforce. Property taxes paid by the company also dropped from about $3.2 million in 2020 to less than $670,000 in 2022.
Similarly, when California’s Marathon Martinez refinery shut down in 2020, it laid off more than 700 workers, including 345 unionized refinery workers. A survey of former workers found they faced significant difficulty finding high-quality, union jobs in the aftermath of the refinery closure. In early 2021, the refinery received a permit to convert its units for renewable diesel production and announced that it expected to employ about 110 workers to run the biofuel facility. One representative from a prominent labor organization said in an email to WRI that the converted Martinez refinery is significantly understaffed after the company used the conversion to biofuels as an opportunity to reduce its workforce.
In contrast, the Phillips 66 refinery in Rodeo did not lay off any workers when it converted to biofuel production, showing that the overall impact of conversions on workers requires further investigation.
A Roadmap for California’s Energy TransitionCrop-based biofuels cannot be considered a sustainable bridge fuel or a climate-friendly replacement for petroleum-based fuels.
The uptick in petroleum refineries converting to bio-based diesel production in California raises a series of questions and uncertainties. This holds true even as the limited supply of waste feedstocks, the negative climate impacts of utilizing virgin vegetable oil, and the future of the RFS might disincentivize further conversions. Currently, the excessive incentivization for biofuels risks slowing the necessary move away from liquid fuels while also driving global land-use change and greenhouse gas emissions.
As California strives to achieve its decarbonization targets, policymakers must carefully consider these implications. Developing a transition roadmap that holistically considers the various environmental and social impacts of different transition pathways is an important next step.
tesoro-ca-refinery.jpg Climate North America U.S. Climate fossil fuels biofuels greenhouse gases Type Explainer Exclude From Blog Feed? 0 Authors Danielle Riedl Haley Leslie-Bole Devashree SahaThinking Beyond the Borehole: Safe Water Supplies Begin with Healthy Watersheds
Contributors: Brett Gleitsmann (Conrad N. Hilton Foundation) and Jason Lopez (Millennium Water Alliance)
Expanding water coverage to un- or under-served communities while ensuring that existing sources are safe, functioning and continuous is a fundamental development objective of our time. But less reliable and manageable water supplies — driven by deteriorating environmental and climatic conditions — threaten our ability to do so. Water security increasingly depends on considering water within its wider hydrological and governance context, from source protection upstream to system management downstream.
Water stress and insecurity are rising globally. Many countries are now forced to grapple with water challenges on multiple fronts, including mounting water scarcity, more frequent droughts, worsening floods, and record-breaking temperatures. Universal access to water and sanitation services also remains beyond reach, especially in low-income countries where poverty and vulnerability are most acute.
One in three people — over 2.2 billion people — still do not have access to safe drinking water, while more than half the global population lacks adequate sanitation services. Rural communities are lagging behind their urban counterparts, with many experiencing water shortages for at least one month of the year — a danger expected to grow exponentially by 2050. At the same time, droughts have increased by 29% since 2000 and flooding disasters by 134%, even damaging vital water infrastructure.
When water flows are stable and consistent, freshwater springs and communal water points are critical lifelines, especially in hard-to-reach areas and regions where rain is highly seasonal or chronically sparse. Yet, many springs, wells and boreholes are seeing reduced yields, dropping volumes, and low functionality. Water points and systems that once could be relied on are failing. In parts of sub-Saharan Africa as many as 70% of rural water schemes have become fully or intermittently non-functional. Although often triggered by poor construction, operation, and maintenance, the situation is being exacerbated by growing instances of water sources running dry. When this occurs, people are forced to rely on unprotected sources, with grave consequences on health and wellbeing, especially for children.
The continuity of water — known as water source sustainability — is an increasingly pressing issue but one that has received insufficient attention, especially in the Water, Sanitation, and Hygiene (WASH) sector. While new water development goes on, the very source waters that feed our water supply systems are becoming ever more degraded or depleted. And without these supplies at origin, there is no safe access.
Countering this impending water crisis requires protecting water where it first originates, better managing water-related hazards and ensuring there’s enough water for human needs as well as for economic and ecological purposes.
Hydrology DisruptedIn the prevailing narrative, access to water is hindered by poor management, a lack of financing and more recently, climate change. In other words, systemic inadequacies and underfunding of water services, more erratic and extreme weather, and surging populations and production driving over-abstraction and competition with household water. However, while there are many factors that challenge water service delivery, a key underlying issue is often not well-captured or discussed — one that hugely affects water source sustainability: the degradation of the natural environment.
Growing human pressures on ecosystems and landscapes are both driving climatic fluctuations and disrupting eco-hydrological processes that provide clean, reliable sources of water. Higher temperatures are increasing evaporation which modifies rain patterns. In many places, this is leading to more irregular and unusually low rainfall, causing longer dry spells, while elsewhere to more intense precipitation, triggering deluge.
What more, vegetation plays a significant role in how rain interacts with landscapes to generate and replenish source waters. Forests, for example, release water into the atmosphere and improve soil filtration capacities.
But human activity is eroding the Earth’s green cover, hugely harming the natural cycling of water. Changes in land cover and use are affecting where water is stored, how it moves and how clean it is. Deforestation, converting grassland into cropland, intensive farming and livestock rearing, and rapid urbanization are all contributing to the problem.
As a result, water flows worldwide are being altered. So much so that rivers have experienced rapid decline and over 50% of global catchment areas now display deviations from normal conditions, with the majority exhibiting drier conditions.
The threat to water services — the points, schemes, and networks that bring water to people — is huge, and the consequences dire, including rising costs for drilling deeper and deeper boreholes or replacing structures that have been lost.
The water cycle: water evaporates from the earth’s surface and rises into the atmosphere where it cools and condenses to form clouds, to then fall again as precipitation. When on the surface, rainwater moves through watersheds, flowing as runoff across land or streamflow in rivers, and through the ground into aquifers. This cycling of water to and from the atmosphere and within landscapes determines weather patterns around the world and the availability and adequacy of water resources in a given area.Despite this, the WASH sector has given insufficient consideration to the broader natural systems — the hydrology, catchments, and source waters — that underlie water provision, placing emphasis instead on infrastructural and technical solutions (mainly the extraction, storage, distribution, and treatment of water). But the problem is no longer technological or financial nor climatic alone. We can no longer assume that digging and drilling will result in water. Environmental and climatic shifts are now impeding healthy hydrological functions, creating ever more challenges for water service delivery.
Digging Deeper: How Environmental Degradation Impacts Water Supplies and Undermines Service DeliveryBut how, exactly, does environmental degradation — especially watershed degradation — impact water supplies and reduce service levels?
A watershed (or catchment or basin, depending on size) is a land area that drains to the same body of water. It’s an interconnected system: watersheds store, transport, and release water by way of their geological and hydrological characteristics, thereby deeply connecting water sources and supplies to ecological and landscape conditions.
When healthy, watersheds provide many valuable services we often take for granted, including clean water, fertile soils, erosion control, flood protection and nutrient movement. Watersheds also support good physical and chemical water properties. Key aspects of a healthy watershed can include intact headwaters and good vegetation cover.
But when a landscape is disturbed, the ecology of a watershed changes, impacting water’s ebbs and flows and good hydrological functioning. Degraded lands are characterized by barren soils which reduce soil water absorbency and cause greater erosion, runoff, and sedimentation — factors that can significantly damage water supplies and conditions downstream. Surface waters and shallow groundwater — often key sources of domestic water — are particularly vulnerable.
These dynamics impact the three critical aspects of water: quantity, quality and flow regulation:
1) Water Quantity (Availability)Landscapes help control the cycling of water — essentially, determining what happens to rain when it falls to earth. Under natural conditions, some rainfall runs off the land surface, while most penetrates and moistens soils. It then continues to move downward by gravity beneath the soil through the processes of infiltration and percolation. Rainwater is eventually stored underground in aquifers. Finally, some of the water reemerges on the surface, discharging through seeps, springs and streams. Surface and ground waters are replenished from this rainfall and its runoff.
Water in landscapes: Land, trees, vegetation, and water interact to impact water availability up and downstream.Infiltration and percolation depend on the amount, duration and intensity of precipitation and on land’s physical characteristics. Vegetated watersheds protect the top layers of soil, better manage rainfall and help ensure consistent supplies of water year-round. In fact, over two-thirds of drinking water worldwide is provided by forested watersheds.
As landscapes are stripped of vegetation, however, these processes are weakened: soils become unstable and unable to soak any or adequate rainfall. This causes rain to gush off the land, generating soil erosion and excess runoff along its path. Runoff, although important to replenishment functions, is escalated by impervious surfaces and, ironically, even too much rain in a short time over a degraded area can impede infiltration. Consequently, the area where natural infiltration occurs is reduced, causing less rain to seep underground. As a result, aquifers are not being recharged, stream flows decrease, and groundwater tables fall. This causes water yields at springs, boreholes and wells to shrink or stop, hindering service levels.
2) Water QualityTrees and vegetative cover are also important to water quality. Eroding lands contribute to the formation of sediment which detaches from soils and blends with runoff. Some sedimentation is very natural, but excessive sediment can significantly damage ambient water. Sediment picks up pollutants and other impurities, including nutrients from fertilizers, pesticides, microbes from waste and metals from industrial activity. Runoff from irrigated farmlands, for example, can carry nitrogen and phosphorus, which can eventually lead to depleted oxygen, dead zones and harmful algal blooms in water bodies. Such impurities, along with increased turbidity, result in dirtier water and higher treatment costs. Land and watershed degradation have already impacted drinking water for more than 700 million people, costing cities globally $5.4 billion each year in treatment. Poor land management practices can thus both decay soils on-site and worsen pollutant load downstream.
In contrast, natural ecosystems like forests, grasslands and wetlands act as important buffers against sedimentation. Strong roots anchor soil to the ground while vegetation absorbs sediment, reducing what would otherwise reach streams, rivers and lakes. These ecosystems also filter contaminants, straining and removing them from water. Vegetative barriers help buffer people and infrastructure from dangerous overflows and reduce the debris entering catchment areas. This can cut costs and boost water cleanliness with benefits for household wellbeing.
Of course, water quality is impacted by other factors as well: municipal waste and sewage, improper treatment and disposal of industrial wastewater, inadequate sanitation and hygiene practices and so on. But it is important to also understand how water quality is affected by environmental degradation via sediment transport.
3) Water Flow (Regulation)Lastly, landscapes also help regulate water flows by controlling how, and how quickly, rainwater is captured and released. Landscapes act as natural sponges: the canopy and roots of trees slow heavy rainfall, allowing it to move onward more gradually. Vegetation helps compact soils, braking excessive stormwater and better controlling how water moves through a landscape. Trees along riparian areas, for example, can reduce the potential and severity of surging events. In so doing, they reduce water’s momentum and, with it, the risk of flooding. Instead, when soils are dry, the detrimental effects of runoff are intensified. Flash floods can directly damage water and sanitation infrastructure while spreading disease and threatening livelihoods and life.
Furthermore, as excess runoff moves silt-laden water downstream, layers of sediment progressively settle on reservoir floors. This sediment can prevent water from flowing smoothly, causes wear and tear, and clogs canals. And rapid sediment buildup can reduce the storage capacity and lifespan of water structures, seriously impacting drinking water supply, irrigation, and hydropower production. Indeed, sediment deposition is escalating the need for reservoir dredging and affecting dam safety worldwide — a risk increasing with more extreme weather.
Advancing Water Security Needs More Holistic ThinkingAlthough the situation appears dire, there are solutions.
Confronting today’s water challenges requires thinking beyond traditional water infrastructure interventions to how climate change and environmental degradation are impacting source waters — with a vision for long term continuity. This warrants asking: Where does the water for WASH access come from? What are the risks to that water source?
Drinking water services rest on the readiness and reliability of good quality water. A number of factors come to play, including mechanical determinants, financing and social elements, but also geography and hydrology. First and foremost, water services depend on the availability of freshwater and the conditions of the broader catchment where they are found. The loss of natural habitats and deteriorating landscapes are undermining WASH efforts — with significant implications for the sector. Costs are mounting and uncertainty is rising. Notwithstanding, it remains challenging to elevate water resources management (WRM) and the environmental conservation agenda as important aspects of water service delivery.
Healthy watersheds help sustain stable supplies of freshwater and counter water-related shocks. Better managing and rehabilitating landscapes can help preserve source waters and remove stressors while maintaining or reclaiming good watershed functions. This restorative approach — known as watershed management, landscape restoration, or similar terms — involves implementing a range of sustainable land, forest, soil and water conservation measures to revegetate a degraded site and recover soil health. Many measures are nature-based — making them less costly than built infrastructure — and most reflect actions to collect and slow down rainwater while stabilizing soils. This includes planting trees and grasses, terracing croplands and hillsides, and adopting more sustainable (soil-friendly) farming and grazing practices, such as no till, cover cropping and agroforestry.
Terraced farmlands and check dams in Minzir 01 Micro-watershed, Amhara Region, Ethiopia. These measures help prevent erosion while allowing water to better reach crops. Photo by Francesca Battistelli / WRI.Whether on cropped or mountain areas, in urban settings or along stream channels, the idea is to apply measures that help decrease erosion, runoff and sedimentation. Doing so can help restore local hydrology and retain cleaner water in the wider catchment. In communities around the world, these kinds of projects have proven to be successful:
- In India’s Uttarakhand state, for example, community-driven spring restoration efforts helped revive 600 freshwater mountain springs, key sources of community drinking water. Digging contour trenches, percolation pits, and ponds helped slow runoff, channel rainwater into the soil and refill the natural springs.
- In Uganda’s Kamwenge District, degraded wetlands were restored back to their original state which helped increase the water-holding and infiltrating capacities of soils and recharged local groundwater reserves.
- In Pembamoto, Tanzania, farmers dug half-moon shaped soil bunds to capture rainwater, thus re-saturating soils, revitalizing the landscape and stopping floodwaters. This practice is also common in the West African Sahel as a strategy for water retention in arid areas. As the land regenerates, on-site soil moisture improves and crops better resist dry conditions. Satellite images have revealed the improvements in vegetation cover over time.
While delivering water benefits, these interventions offer additional co-benefits, including increased agricultural productivity, biodiversity protection and carbon sequestration. As trees grow and soil fertility returns, communities can reap the benefits of better crop yields, local fruit and fodder, and household income — creating material incentives needed to keep investing in watershed health.
Sustainable land and watershed management have been proven to spur water and food security, uphold business operations, create jobs and reduce poverty, with positive impact on livelihoods, nature and climate resilience. And in providing more plentiful, clean, and timely water, improvements in sanitation and health can be expected.
Sustainable watershed management practices and their water benefits
Benefit Water quantity Water quality Regulated flow ObjectivesReduce runoff/erosion; improve soil moisture and infiltration; increase supply Reduce sedimentation; filter pollutants; reduce contaminants Flood and landslide prevention; protect habitats and infrastructure Interventions Tree planting (reforestation, afforestation) ✓ ✓ ✓ Revegetation (grass/buffer/filter strips, direct seeding, streambank and riparian restoration) ✓ ✓ ✓ Forest conservation ✓ ✓ ✓ Wetland protection, rehabilitation, or construction ✓ ✓ ✓ Area exclosures (prevention of overgrazing) ✓ ✓ Bunds (stone, soil) ✓ ✓ Terracing ✓ Check dams ✓ ✓ Trenching ✓ ✓ Percolation pits ✓ ✓ Water harvesting (rainwater capture, half-moons, contours, etc.) ✓ ✓ Sustainable and regenerative agriculture (e.g., crop rotation, no till, inter-cropping, alley cropping, contour farming, integrated pest management, improved grazing) ✓ ✓ ✓ Agroforestry (integrating trees and crops) ✓ ✓ ✓ Silvopasture (integrating trees and grazing) ✓ ✓ ✓ Concurrent sanitation activities ✓Of course, boreholes, wells and piped networks are not always adequately constructed or managed. This can cause huge problems with reliability and ultimately access, and these issues cannot be downplayed. Poor operation and maintenance reduce water point performance, often causing failure. Infrastructure, technical execution and capital maintenance remain fundamental aspects of water service delivery. But these (the “hardware” issues) are not sufficient now. In many places, the water sources connected to these structures are strained or depleted. This is resulting in unsuccessful drilling rates and diminished functionality, leading to the growing abandonment of water supply schemes.
And even where there is a physical abundance of water, inefficient and inequitable governance can exacerbate water insecurity.
The time has come to think beyond the borehole and upstream of a water scheme to the wider catchment context. Healthy watersheds should be seen as integral elements of a sustainable and resilient water supply system. Doing so means paying attention to catchment dynamics that help provide, filter and regulate water, planning and “proofing” for climate change, and addressing the human drivers of water risk and ecological degradation.
Fortunately, there is growing recognition of the importance of better linking freshwater conservation with WASH through greater regard for water governance issues, climate resilience and environmental health. Interventions in watershed protection alongside more conventional water supply development can also help preserve surface and ground waters for beneficial use, helping safeguard those investments over time. This strengthens the overall water supply context, and — by extension — the context for WASH more broadly.
At the same time, it is vital to enhance the regulations, institutions and capacities of authorities and communities responsible for managing water. Operation and maintenance, reducing leakage, water safety planning, and professionalized service provision have all become increasingly urgent under growing hydrological uncertainty. Water is also a cross-sectoral issue which requires multi-level dialogue, planning and implementation. Integrated WRM approaches can enable a more effective approach to water management, helping ensure resources are used soundly, observing ecological limits and sustainable yield, prioritizing household needs, and enhancing climate-resilient WASH and livelihoods. Fostering context-specific solutions also means ensuring local actors be part of the response. Only this way can we advance systemic change.
These are priority themes in a project in Ethiopia’s Tana Subbasin, led by WRI in partnership with the Millennium Water Alliance, WaterAid, and local government institutions, and funded by the Conrad N. Hilton Foundation. Its key premise: the health of watersheds has a huge impact on water supplies and needs to be considered in water planning and programming.
WRM and WASH cannot succeed in isolation. Investments in water access must account for environmental and climatic factors that increasingly affect source sustainability. Not doing so will undermine long-term WASH efforts. Solutions to systemic inadequacies can be found in strategies, partnerships and funding that help advance more holistic “systems thinking” approaches that look from source to tap. WASH actors should move past conventional methods and step up programming to address water continuity and underlying source water issues. Done well, interventions at the intersection of WRM, WASH and climate adaptation can better advance water security together with environmental, wellbeing and livelihood objectives — forging more resilient water systems and communities.
water-collection.jpg Freshwater Water Quality Water Security Corporate Water Stewardship Type Technical Perspective Exclude From Blog Feed? 0 Projects Authors Francesca BattistelliMost Countries Missed a Chance to Invest in Climate Resilience During COVID Recovery. But the Sooner They Start, the Better
While the COVID-19 pandemic disrupted livelihoods and triggered a global economic crisis, the unprecedented scale of recovery funding approved by governments also presented an opportunity to rethink business as usual. International institutions from the UN to the World Bank encouraged governments — particularly in poorer countries that are especially vulnerable to climate impacts — to leverage their recovery packages to “build back better” by investing in climate-resilient societies and economies.
Co-managed by WRI, the Global Commission on Adaptation similarly called for countries to align their economic recovery packages with, and accelerate the achievement of, longer-term climate objectives. This is because returns on certain investments in climate adaptation — such as early warning systems, resilient infrastructure and water resources management — far outweigh the costs and can yield economic, social and environmental benefits even when extreme events don’t materialize.
So, how did countries respond? Research produced by WRI and the Global Resilience Partnership found that only a handful of countries capitalized on this opportunity. Moreover, wealthier and less-vulnerable countries were more likely to pursue adaptation action than low- and middle-income countries on the frontlines of the climate crisis — a paradox that persists today.
The COVID-19 pandemic is now largely behind us, but climate risks and the need for adaptation are only growing. As we look ahead, knowing whether and how countries invested in resilience during a time of unprecedented public spending can offer valuable insights for closing the adaptation gap.
What We FoundWe reviewed COVID-19 recovery measures approved from 2020-2021 by 67 countries, representing a range of geographies and income levels. We found that they largely failed to integrate climate adaptation and resilience into their economic recovery plans and investments. Specifically, our analysis revealed:
1) The need for greater political awareness and leadershipOnly 16 countries (24%) of those we analyzed pursued a climate-resilient recovery by defining a high-level goal or commitment to climate adaptation and resilience, approving concrete actions that explicitly responded to specific physical climate risks (e.g., climate-risk-responsive measures), or both. These climate-risk-responsive measures could take the form of direct investments in adaptation, or the adoption of fiscal, monetary or other policy actions.
Among the countries that approved such measures, most approved investments or policies to address water resources management, disaster prevention, infrastructure and nature-based solutions (see the map below).
Countries that articulated high-level commitments were more likely to take concrete adaptation action — such as approving policies or investments to reduce or manage specific climate risks — than those without overarching climate resilience goals. For example, Italy’s National Recovery Plan aimed to improve the country’s climate resilience by protecting nature and biodiversity and included investments in flood management. This underscores the need to raise political awareness about the economic and social damages associated with climate change and the benefits of investing in adaptation and resilience.
2) A paradox of vulnerability and incomeOur study found that higher-income, less climate-vulnerable countries were more likely to take concrete adaptation action during their COVID-19 recoveries than lower-income, more vulnerable countries. While 80% of high-income countries and all of the upper-middle income countries that demonstrated a risk-responsive recovery did so through direct investments in climate adaptation, only 40% of lower-middle-income countries did so (see the figure below). This tracks with trends in overall COVID-19 recovery spending: higher-income countries spent a higher share of their GDP to manage the impacts and recover from the pandemic as compared to other country income groups.
Overall, the least vulnerable countries in our analysis were 3 times more likely to take adaptation action than the most vulnerable countries. G20 countries, which represent about 85% of global GDP, were twice as likely to have responded to physical climate risks through their recovery measures as members of the Vulnerable Twenty (V20) — a group of mostly middle-income countries representing those economies most vulnerable to climate change.
Kenya and Vanuatu, both lower-middle-income countries, were the only “most vulnerable” countries found to have taken adaptation action. Kenya invested US$94 million in flood mitigation measures, while Vanuatu included the improved resilience of vulnerable groups to cyclones as a key policy outcome of its recovery framework.
3) Too little focus on addressing inequitiesMost countries’ COVID-19 recoveries targeted groups that were particularly vulnerable to the social and economic impacts of the pandemic. However, recovery measures that aimed to reduce or manage physical climate risks were generally broad, without consideration for the unique vulnerabilities of specific groups.
There were a few notable exceptions. Canada’s A Healthy Environment and A Healthy Economy plan committed to better enabling Indigenous climate leadership, including investing over US$770 million to support Indigenous-led projects and improving Indigenous peoples’ access to the country’s Disaster Mitigation and Adaptation Fund. Vanuatu’s Recovery Strategy 2020-2023 aimed to leverage traditional food preservation and building practices to improve the disaster preparedness and response of vulnerable groups, including women and elderly people.
More of these targeted efforts are needed around the world. Building climate resilience can help address social inequities, since areas with higher climate vulnerability are associated with residents who are also more susceptible to economic shocks. Following the Principles for Locally Led Adaptation could better ensure that people facing marginalization play a leading role in the design and implementation of adaptation actions that address the root causes of their climate vulnerabilities.
With Recovery Funding in the Rearview, What’s Needed Now to Accelerate Adaptation?While the surge in government spending during COVID recovery is now a thing of the past, investments in climate resilience cannot wait. The longer countries delay in adapting to climate change, the more extensive the damages will be, and the more expensive adaptation will become.
On the heels of another UN climate summit (COP29) that failed to match international climate finance commitments to the needs of developing countries, governments, especially of vulnerable countries, and international institutions must work together to accelerate adaptation investment. This includes:
- Strengthening economic and financial analyses of climate risks. Governments — even in highly vulnerable countries — may lack the motivation to act without an improved understanding of the economic, social and environmental risks of climate change. Ministries of finance, planning and economy are responsible for fiscal and financial decision-making that shapes the economic trajectory of their countries. These ministries should apply systematic climate risk screening tools and integrate physical climate risks into macro-economic modelling to better understand the need for, and prioritize, adaptation investments. However, both depend on the improved availability and quality of required data, for which national bureaus or institutes of statistics play a key role.
- Mainstreaming climate adaptation and resilience into regular planning and budgeting processes. Governments should seek to elevate climate resilience within national development plans and frameworks as an overarching outcome or key priority; this can help improve the alignment of adaptation and development goals across sectors in support of a whole-of-economy response to climate change. Earmarking a required percentage of national budgets for adaptation investments and developing climate budget tagging (CBT) frameworks could also help to ensure steady funding for building climate resilience in vulnerable countries and improve accountability. Indonesia’s development and application of its own CBT process to monitor and track climate-related public spending, for example, increased allocations to climate adaptation by an estimated US$3.5 billion from 2016 to 2019.
- Establishing pipelines for climate adaptation and resilience projects. Vulnerable developing countries will need technical support to translate national adaptation priorities into evidence-based adaptation programs that address the root causes of climate vulnerability and can be leveraged to access available domestic and international finance.
- Scaling concessional finance and debt relief. Many low- and middle-income countries will require both concessional finance and debt relief to invest in climate adaptation without increasing already high debt burdens. Development finance institutions must increase available international concessional climate finance by at least 5 times to achieve the Paris Agreement goals by 2030. This is particularly true for multilateral environment and climate funds, which collectively represented a mere 5% of concessional climate finance provided from 2018 to 2022.
The need for investment in climate adaptation continues to grow as climate impacts escalate. And the economic and social costs of inaction are only rising. The sooner countries prepare for a future we know will be more volatile, the better off they and their citizens will be.
climate-resilience-mangroves-covid-recovery_0.jpg Climate Climate Resilience adaptation coronavirus Economics Climate climate finance Type Technical Perspective Exclude From Blog Feed? 0 Projects- Climate Adaptation and Resilience
- Resilience and Adaptation Mainstreaming Program (RAMP)
- Adaptation Finance and Investment
- Coronavirus Recovery
STATEMENT: President Trump Pledges to Roll Back Climate Policies but Clean Energy Momentum Continues
WASHINGTON (January 20, 2025) — Today the United States inaugurated Donald Trump the 47th President of the United States. President Trump’s first actions included withdrawing the United States from the Paris Agreement and pledging to roll back executive orders and other Biden administration policies.
Following is a statement from Debbie Weyl, WRI US Acting Director:
“On his first day back in the White House, President Trump is trying to turn back the clock on America’s clean energy leadership at the expense of American people and their health. If realized, President Trump’s actions would sacrifice the United States’ competitiveness globally, raise energy prices for American families, and pollute our air. Pledging to roll back climate policies that have created more than 400,000 good-paying American jobs will only hurt workers and our economy.
“Despite President Trump’s attempts to shatter progress on climate change, a band of governors, mayors and other leaders are committed to stand their ground and enact low-carbon policies that cut costs, create jobs and build cleaner communities. The clean energy revolution will continue regardless of who is in the White House.”
STATEMENT: Paris Agreement Withdrawal Erodes America’s Standing in the World
WASHINGTON (January 20, 2025) — On his first day in office, President Donald Trump announced that the United States will withdraw from the Paris Agreement on climate change.
Following is a statement by Ani Dasgupta, President and CEO, World Resources Institute:
“The Paris Agreement remains as essential as ever. UN climate negotiations are the only platform where every nation has a voice on one of the most pressing challenges of our time. Whether it’s to tackle the catastrophic climate impacts they face or tap into rapidly growing green technologies, countries recognize the critical value of this international process. That’s why I’m confident that virtually all nations will stay committed to the Paris Agreement despite the United States’ departure.
“Every year, far too many US communities are bombarded with deadly wildfires, floods and hurricanes that know no borders. At the same time, the transition to a low-carbon economy is already underway. Walking away from the Paris Agreement won’t protect Americans from climate impacts, but it will hand China and the European Union a competitive edge in the booming clean energy economy and lead to fewer opportunities for American workers.
“It simply makes no sense for the United States to voluntarily give up political influence and pass up opportunities to shape the exploding green energy market. Sitting on the sidelines also means the United States will have fewer levers to hold other major economies accountable for living up to their commitments.
“While the US administration retreats, states, cities and businesses across the U.S. will continue driving climate action forward. And clean energy incentives from the Inflation Reduction Act will continue to be an economic boon for communities nationwide thanks to strong support from many Republicans and Democrats alike. Make no mistake, America will still be very much in the global fight against climate change.
“We are in a generational struggle to move the world to a safer place. Today’s abdication of responsibility by President Trump will not derail the world from this fight.”
Foreign Investors Could Stall Coal Plant Closures in Asia
Some countries are making bold plans to eliminate coal. Recently, Indonesia's president announced that the country will retire all coal and other fossil fuel plants by 2040. This tracks with projections that say coal power — the most polluting fuel source — must be completely phased out by 2040 to avoid the worst impacts of climate change.
But governments aren't the only ones with a say in the matter.
In developing countries, coal plants are often financed by foreign investors. To attract funds for these costly projects, host governments sign contracts promising investors lucrative returns for years to come. Ending coal power by 2040 would mean shuttering many such plants years or decades ahead of schedule, conflicting with these promises.
Common wisdom holds that investors are most at risk in this scenario — that they will be forced to divest from or repurpose power plants to avoid further losses as the world moves away from coal. But new research from WRI finds that a much bigger share of the burden could fall on host governments.
We examined dozens of coal plant contracts and found that all of them require host governments to compensate investors, especially foreign ones, for actions that would drive early plant closures — creating a major disincentive for shifting to cleaner energy.
But these countries are not without options. There are viable pathways to keep rapid coal phase-out in reach if host governments, investors and other stakeholders come to the table to negotiate.
How Contracts Can Lock in Coal PowerInvestment contracts for power plants are not unusual. The most common varieties include Power Purchase Agreements (PPAs) — long-term contracts where an off-taker, such as a utility company, commits to purchase energy at an agreed price — and Government Support Agreements (GSAs), in which host country governments provide investors with guarantees or other explicit support.
These contracts serve an important purpose. By offering predictable, stable returns, they've helped attract much-needed foreign investment to meet rising energy demand in developing countries. But where contracts are used to attract fossil fuel investment, they've also hampered governments looking to launch more ambitious climate action.
The problem is especially thorny in Asia, where many nations still rely heavily on coal power. We analyzed investment contracts in Indonesia, Pakistan and Vietnam, where 40%-70% of coal plants are backed by foreign investors. These countries' fleets are also very young. In Indonesia and Vietnam, the average coal plant age is under eleven years; in Pakistan, it's just four. Considering that the typical lifespan of a coal plant is around 50 years, many of these plants will need to be shut down 10-30 years ahead of schedule to align with global climate goals.
Piles of coal waiting to be burned at the Van Phong power plant in Vietnam. Vietnam, Pakistan, Indonesia and other countries face challenges closing coal plants early when they're financed under contracts with foreign investors. Photo by Pham Hung/iStockIn theory, governments have a range of policy options to drive early coal retirement. They can mandate plant closures, enact more rigorous environmental standards, tax power plant emissions or reduce operation hours. In reality, our study finds that any of these policy actions could trigger terms in a PPA, GSA or other project contract that would require the government to compensate investors for their revenue losses.
For example, if Pakistan's government plans to impose a national carbon tax, it would have to reimburse a coal project company for the increase in operation costs. If a plant is forced to close early, governments may have to pay back shareholders, outstanding project debts and lost future equity returns.
The actual sums involved will be difficult to calculate, but it's clear the cost to compensate investors could be immense. The estimated remaining value of existing coal plants in Indonesia amounts to nearly $15 billion. And the total amount would be higher still when future returns and unpaid interest are added in.
Host countries navigating budgets with limited fiscal space generally can't afford such upfront costs. And they likely won't attempt to break contracts outright, as these are backed by powerful international courts for settling disputes between investors and states. Appeals to these courts are lengthy — demanding resources countries may not have — and can result in massive settlements that strain governments and their standing with international investors.
Going Back to the Negotiating TableTo accelerate coal power phase out, governments will need to renegotiate these contracts to make early plant closures financially feasible. This is largely untrodden territory, but there are some cases already in development that can illuminate the path forward. The key principles for renegotiation are to involve everyone, to ask everyone to compromise, and to start early.
Who will be at the table?The first principle is to involve all stakeholders. Host country governments should be in a leading role; however, they will need support from multilateral development banks (MDBs), home countries of foreign investors, and other international investors to successfully renegotiate coal plant contracts.
Who will be on the other side of the table? Data shows that parties from China, Japan and Korea account for the largest foreign coal investments in South and Southeast Asia. State-run banks such as the Export-Import Bank of China and Japan Bank for International Cooperation are top players. Behind these are the privately-owned commercial institutions (such as Sumitomo Mitsui Banking Corporation).
It's worth noting that development banks from China, Japan and Korea have already stopped lending for new coal projects abroad, but they were some of the last to do so. Ending further lending for new coal projects should be a baseline for financial institutions worldwide.
What can parties offer one another?Researchers and practitioners have discussed some mechanisms for financing early retirement. A coal plant could be refinanced with a new loan at a lower interest rate, purchased by a new entity at a lower cost equity, or financed by "transition credits" (generated from the early retirement). Closing a plant early entails a loss of revenue given that the plant will not be used to the end of its life. Under all these scenarios, every stakeholder needs to be willing to take a haircut or compromise for the negotiation to succeed.
In Indonesia, the Asian Development Bank (ADB) and a local independent power producer agreed to a framework to retire the Cirebon-1 coal plant early. Japan and Germany provided grants and highly concessional funding through ADB, which will also help leverage finance from commercial creditors. With a total refinancing package worth an estimated $325 million, the coal plant will be retired by the end of 2035 — five years before Indonesia's coal phaseout target and seven years before the end of its useful life. This deal allows investors to make back their investment, as ADB helped ensure that the financing package will not result in any loss or gain in present value for the coal plant owners. At the same time, it reduces emissions and encourages investors to redeploy capital towards clean energy.
Another example is a coal plant in Chile that was retired early with the help of the Inter-American Development Bank (IDB). The bank provided a loan to the original investor of the coal plant, Engie Energia Chile, to finance new renewable energy development — but the interest rate on the loan was tied to phasing down emissions from a specific coal plant. This helped retire the coal plant early while also bringing cleaner replacement capacity online.
A wind farm near Coquimbo, Chile. One innovative coal retirement program in Chile offered a power plant investor low interest rates on new renewable energy development in exchange for reducing coal plant emissions. Photo by Manuel Munoz Acuna/iStock What else could help enable the shift?Developing and finalizing these specific plans will take time, and many challenges must be addressed — not just the legal ones we've detailed. But we know there could be several scenarios in which:
- Host country governments set clear targets to retire coal power stations early, aligned with global climate goals and national action plans, and prepare for early coal retirement on the regulatory front. They'd recognize the legal obligation under current contracts but negotiate to reduce the compensation owed to investors — perhaps by offering them other investment opportunities, such as expedited permits for converting coal plants to renewable energy.
- Companies and their backers foresee changes in policy and regulation and could waive certain compensation in exchange for more sustainable opportunities. This is especially relevant in cases where coal power plants already aren't generating expected investment returns due to external factors (such as surging coal prices).
- Governments, from host and home countries, work with development banks to provide monetary incentives — such as lowering the cost of funding for refinancing existing loans — with the criteria that contracts will be shortened to allow for early retirement or repurposing to renewable energy plants.
To scale up early retirement efforts regionally and globally, someone with a dedicated mandate and capacity needs to facilitate. In addition to their role as financiers, MDBs and other development finance institutions can fill this role. As a potential bridge between private finance, government and affected communities, development finance institutions can help engage key stakeholders in an open and timely fashion. They can also provide legal support for contract renegotiations that seek alignment between parties. In the long term, they can help governments develop policies and provide finance to enable broader energy sector reforms.
Moving forward, it is crucial that legal frameworks used for energy investments do not hinder countries from pursuing sustainable development and climate action. Instead, they should encourage foreign investment in low-carbon technologies and a just clean energy transition.
To support this, countries and investors need to jointly assess the impacts of international investment agreements and the dispute settlement mechanisms that cover foreign investment in many countries. These weren't designed with global Sustainable Development Goals and climate targets in mind. Alternative approaches, such as use of risk insurance for investors and state-to-state mechanisms, may be useful. In the long term, a United Nations working group is taking a closer look at a possible reform of investor-state dispute settlement.
With Coal's End Date Fast Approaching, Acting Now Is KeyGovernments, especially in Asia's coal-dependent countries, need to start retiring coal plants at a much faster pace than they've done to date. Legal protections for investors present a major hurdle, but one that it's possible to overcome.
The key is to start now. With immediate support for renegotiation and early retirement actions, stakeholders can clear the way for a rapid shift to clean energy in one of the world's most fossil fuel intensive regions — a shift that will affect the whole world's climate future.
To learn more, see WRI's new working paper: Legal Implications of Early Decommissioning: Case Studies of Foreign-Invested Coal Power Plants in Asia
cyclist-coal-plant.jpg Finance Asia Clean Energy Finance net-zero emissions Type Finding Exclude From Blog Feed? 0 Projects Authors Ziyi Ma Guanying Liu Shuang Liu‘Direct Pay’ Tax Credits Bring Clean Energy and So Much More to US Communities
The U.S. Inflation Reduction Act’s “direct pay” provision offers communities across the country access to clean energy tax credits for the first time. Just two years after it was introduced, direct pay is already helping to bring clean vehicles to city fleets, fund electric vehicle chargers for low-income neighborhoods, provide cost-effective solar power to wastewater plants, and help schools upgrade outdated and inefficient HVAC systems.
But clean energy deployment is hardly the only benefit. Projects receiving direct pay credits are creating good-paying jobs, reducing air pollution, cutting energy costs, creating lasting sources of capital for future community projects, and working to increase the U.S. energy supply at a time of record electricity demand growth. These benefits are happening in both large cities and small towns, across red and blue states and districts.
For example, 27 cities alone have claimed an estimated $12.66 million in tax credits for their 2023 projects by working with the Lighthouse Cohort, a partnership between WRI, Lawyers for Good Government, Government Finance Officers Association, Urban Sustainability Director’s Network, Southeast Sustainability Director’s Network and the Electrification Coalition.
Here, we demystify the Inflation Reduction Act’s direct pay provision and analyze some of its emerging benefits.
Solar panels on a church rooftop in Pasadena, California. The Inflation Reduction Act's "direct pay" provision allows local governments, non-profits and other tax-exempt entities to access clean energy tax credits for the first time. Photo by Angel DiBilio/Shutterstock What Are the Inflation Reduction Act’s Direct Pay Clean Energy Tax Credits?Direct pay, also known as “elective pay,” enables tax-exempt entities to qualify for federal clean energy tax credits that are then received as direct cash payments from the IRS. While federal tax credits for clean energy have been around for decades, they were largely unavailable to tax-exempt organizations like municipal governments and non-profits that did not have tax liability for the credit to apply to. Direct pay “allows tax-exempt entities [...] to receive the same funding for clean energy projects that private industry has been receiving for decades,” said Jillian Blanchard, director of Lawyers for Good Government’s climate change and environmental justice program.
To claim the credits, tax-exempt entities file a tax return with the IRS on qualifying projects or purchases completed or “placed in service” in the previous fiscal year. The credit money is then received as a check or direct deposit. Just like personal tax returns, the money does not have any restrictions or reporting requirements, meaning it could be used for anything from supporting general operations to funding future sustainability projects.
The program currently allows for 12 clean energy and electrification-related credits for technologies like electric vehicles (EVs), EV charging stations, solar panels, wind turbines and battery storage. Organizations that can claim tax credits through direct pay include religious institutions; school districts; rural electric cooperatives; non-profits; and state, local and tribal governments and their associated agencies, including public power utilities.
The Many Benefits of Using Direct Pay Clean Energy Tax CreditsJust two years in, direct pay is already changing the playing field for eligible organizations.
School districts across the U.S. are claiming direct pay on hundreds of projects, including solar panel installations and electric school buses. One school district in Kentucky received over $793,000 through direct pay on a new geothermal HVAC system.
Non-profit and faith institutions are benefiting as well. With support from direct pay, the Watts-Willowbrook Church of Christ in Compton, Calif., recently installed a 12-kilowatt (kW) rooftop solar system that is expected to save the church $184,033 in energy bills over the next 20 years. Baltimore’s City of Refuge non-profit installed over 100 kW of solar panels and battery energy storage through a direct pay tax credit, allowing it to reinvest its energy bill savings and act as a centralized community services hub during natural disasters.
And direct pay isn’t just for small, local projects. The Oceti Sakowin Power Authority, a joint non-profit corporation composed of seven Sioux tribal nations in South Dakota, is using direct pay to ensure they maintain full ownership and benefits from two massive wind farms totaling 570 megawatts (MW) in capacity. When completed, the project will be one of the largest wind power installations in the United States and will generate enough electricity to power more than160,000 homes per year.
Rural electric co-ops and public power entities are also using direct pay for clean energy. In Massachusetts, a 6.9 MW solar array serving six municipal utilities received $2.34 million in tax credit money through direct pay, reducing electricity costs for utilities and the communities they serve. In December 2024, Tri-State Generation and Transmission Association, an electric co-operative power supplier serving customers across Colorado, New Mexico, Wyoming and Nebraska, announced the construction of a 145 MW and 110 MW solar facility. Tri-State expects to receive 40% of its construction costs back through direct pay.
Pateros, Washington is using solar panels to power its wastewater treatment plant and reservoir, thanks in part to direct pay tax credits. Photo by City of Pateros How Are Local Governments Using Direct Pay for Clean Energy?With over 90,000 local governments across the U.S., direct pay offers a substantial opportunity for towns, cities and counties nationwide to unlock billions of dollars of funding and long-lasting economic benefits for their communities. Some are already capitalizing on the credits.
In 2023, San Antonio, Texas finalized a deal to procure 13.1 MW of solar across 42 separate sites. Direct pay enabled the city government to move forward with the plan and own all of the solar installations, which are collectively expected to save the city $7-$11 million in energy costs over the next 25 years. The deal also created 15-17 full-time jobs and is expected to reduce heat in city parking lots by installing 23 solar parking canopies.
The Lighthouse Cohort
Many local governments have never filed a tax return or interacted with the IRS before. Recognizing both the enormous potential and complexity facing local governments in accessing direct pay, WRI, in partnership with Lawyers for Good Government, Government Finance Officers Association, Electrification Coalition, Urban Sustainability Directors Network and Southeast Sustainability Directors Network, created the Lighthouse Cohort, a coalition of local governments across the U.S. leading the way in using elective pay. Supported with funding by Bloomberg Philanthropies’ Sustainable Cities Fund and Invest in Our Future, Lighthouse Cohort partners have provided direct technical assistance on elective pay to more than 60 local governments. Lighthouse Cohort partners have also provided education and created resources for hundreds of local governments outside of the Lighthouse Cohort.
Jord Wilson, the city administrator and public works supervisor for the town of Pateros, Washington, is just one client the Lighthouse Cohort serves. “We are a small staff with limited time and resources,” he said. “I don’t think we would have been able to navigate [the] direct pay filing process without the assistance of the Lighthouse Cohort.”
Learn more here.
Through the Lighthouse Cohort, WRI and its partners have worked directly with 27 local governments to date to help them file for tax credits through direct pay. Participants have already or will soon claim at least 840 projects for their 2023 tax years, including 677 EV projects, 113 EV charger projects and 50 solar projects. On average, local governments participating in the Cohort are claiming $308,739 in tax benefits for their 2023 projects.
A few cities using direct pay include:
Pateros, WashingtonLocated at the meeting of the Methow and Columbia rivers in Central Washington state, Pateros is a small city of 611 people, known for its natural beauty and abundant recreation. It boasts almost 200 days of sunshine a year, making it an ideal location for solar power. The city government aimed to power its reservoir and wastewater treatment plant through solar, but it faced a funding shortfall.
Even with a combination of public and private grants, the city still needed tens of thousands of dollars to cover remaining costs. By using direct pay to file an Investment Tax Credit, as well as claiming a bonus for using solar panels manufactured in Washington state, Pateros received the funding it needed to cover 100% of project costs and maintain ownership over the solar array. The town’s new 53-kW solar system will now directly provide power to its water reservoir and wastewater treatment plant, reducing its energy costs by over 45%.
Buncombe County, North CarolinaTucked into the Blue Ridge Mountains and home to the city of Asheville, Buncombe County, North Carolina used a direct pay filing for 19 solar projects placed in service in 2023. Spread across schools, county administrative buildings, public safety facilities, a library, and a local community college, these solar panels will reduce operating costs by guaranteeing sustainable, reliable, low-cost energy relative to existing utility bills.
Direct pay returns are also helping the county manage its response to Hurricane Helene, which displaced thousands of people and caused billions of dollars in damages to Western North Carolina in September 2024. Since tax credit checks received through elective pay are not earmarked for specific purposes, the over $1 million Buncombe received and helped other organizations claim provided much-needed cash relief. “Elective pay returns could not come at a better time for the community,” said Jeremiah Leroy, Buncombe County’s director of the office of sustainability. “These are much-needed funds to continue normal operations, much less the recovery effort over the coming years.”
Direct pay is also shaping future disaster response and resiliency efforts. In the aftermath of Hurricane Helene, Buncombe County is piloting battery storage projects to help provide power to critical community facilities during future outages.
“The biggest thing that I think about is how to create opportunities to build back better as a more resilient community,” said Leroy. “And having elective pay will make that...a possibility.”
Philadelphia, PennsylvaniaPhiladelphia has been a leader in sustainability since 2016, when the city committed to halving municipal emissions by 2030. In 2021, the city’s office of sustainability completed the first version of the Philadelphia Municipal Clean Fleet Plan, laying out a strategy to shift the city’s 6,300 vehicle fleet to clean and electric vehicles.
The Inflation Reduction Act’s direct pay provision enabled access to the recently introduced Commercial Clean Vehicle Credit, which allows qualifying entities to receive up to $7,500 for every light-duty battery-electric or plug-in hybrid vehicle they purchase. The city qualified for just over $1 million in tax credits on the more than130 battery electric vehicles they purchased in 2023. These vehicles will help Philadelphia avoid around 426 metric tons of greenhouse gases per year, equivalent to burning almost 500,000 pounds of coal or charging 34 million smartphones.
Dan Gasiewski, Philadelphia’s chief grants officer, noted that funds will bolster city operations and sustainability initiatives.
Chattanooga, TennesseeWithin the Appalachian Mountains on the border with Georgia, Chattanooga, Tennessee has a long history of industry, innovation and sustainability.. In the spirit of its longstanding work to reduce air pollution and promote clean transportation, Chattanooga filed for direct pay returns on five new electric vehicle charging stations, all of which are located in low- to moderate-income communities in the city.
"The elective pay credits offset the cost of our elective vehicle charging stations, allowing our resources to stretch further,” said Ken Howell, the city’s director of fleet management. “Four of our current EV stations are publicly accessible and all stations will be utilized by our fleet during the light-duty EV transition. The city is continuing to build out our EV charging network; these tax credits will be crucial in that construction and ultimately offset our vehicle reliance on diesel and gasoline."
Direct Pay Is a Critical Resource for US CommunitiesThanks to direct pay, cities, school districts, rural electric co-ops, religious institutions, public power utilities, and other tax-exempt organizations across all regions of the U.S. can now receive the full value of incentives for undertaking clean energy and electrification projects. These incentives are being directly re-invested into communities, while at the same time enabling larger and more impactful projects that decrease emissions, create jobs, and provide enough power to meet skyrocketing energy demand.
However, direct pay and clean energy tax credits face an uncertain future. Incoming President Donald Trump, who takes office this month, has long criticized clean energy and publicly stated his intention to repeal the Inflation Reduction Act. Some Congressional Republicans have also signaled interest in changing or rescinding clean energy tax credits, though this would require passing new legislation. At the same time, many Republican districts across the country have seen enormous levels of investment, job creation, and benefits because of the Inflation Reduction Act’s investments. Without provisions such as direct pay, communities and the institutions that serve them will be stuck with higher costs and fewer opportunities. That’s why 18 Republican Congressmembers have already voiced their opposition to repealing clean energy tax credits.
“The economic benefits of the Inflation Reduction Act are being felt across the country,” Blanchard said. “If any future administration attempts to remove these [...] credits, it will cause significant economic and environmental impacts across the political divide, particularly in rural districts.”
As a growing number of examples show, investments in the clean energy economy benefit everyone. Through clean energy tax credits and direct pay, the U.S. can be the world’s lighthouse, illuminating the path toward a bright, clean and resilient energy future.
EDITOR'S NOTE, 1/23/25: A previous version of this article stated that a Kentucky school district received $739,000 through direct pay. It actually received $793,000. We regret the error and have corrected it.
solar-panels-elementary-school-us.jpg Energy Clean Energy U.S. Climate Policy-Clean Power renewable energy U.S. Climate Type Finding Exclude From Blog Feed? 0 Projects- Maximizing Local Adoption of Inflation Reduction Act Clean Energy Incentives
- Local and State Clean Energy Programs
Updated Tool Can Help US Communities Include Forests and Trees in GHG Inventories
Forests and trees play a critical role in carbon sequestration while providing other benefits to communities, including improving air quality, regulating hydrological processes, reducing energy costs and promoting well-being. Accurate monitoring of these resources over time may enable communities to make better land management decisions that benefit both climate and people simultaneously.
Many communities in the U.S. are developing Climate Action Plans (CAPs) to reduce greenhouse gas (GHG) emissions and achieve carbon neutrality. While many CAPs focus on the energy, transportation and waste sectors, most do not consider the role forests and trees play in the fight against climate change. One reason is that planners have lacked the data and clear guidance needed to include them in GHG inventories, on which CAPs are based.
To address this gap, experts from WRI, the Woodwell Climate Research Center, and ICLEI - Local Governments for Sustainability (ICLEI USA) published guidance for ICLEI USA’s U.S. Community Protocol as well as the Global Protocol for Community-Scale Greenhouse Gas Emission Inventories. These frameworks outline how to estimate emissions from forest and tree cover loss within communities, as well as carbon absorbed by forests and trees that are maintained or newly planted by a community.
Introducing the Land Emissions and Removals Navigator (LEARN)Accompanying this guidance is the Land Emissions and Removals Navigator (LEARN) tool, developed in collaboration with web developer Blue Raster. LEARN is a free online tool with open-source code that integrates national geospatial data sets with methods from the U.S. Community protocol, enabling communities to estimate GHG impacts from changes to forests and tree cover over time.
In just a few clicks, users can derive locally tailored estimates of the annual GHG impacts associated with changes to forests and tree cover in their community over time. After specifying an area and years to analyze, LEARN does the rest by performing automated, spatially explicit analyses of data from the U.S. Forest Service and U.S. Geological Survey, including:
- Land cover change
- Timing and location of forest disturbances like fire, harvest and insect outbreaks
- Loss and gain of tree canopy cover in urban and other non-forested lands
- Carbon stocks within forests of different maturity classes and protection statuses
(Read more about the history and development of the LEARN tool, and read about the data and methodology here.)
Updates in 2022 Expanded LEARN’s Data CoverageIn 2022, the LEARN project team collaborated with the Chesapeake Conservancy to implement a suite of updates. This included land cover change and forest disturbance data updated through the year 2019, as well as high resolution (1-meter) tree canopy change maps for the Chesapeake Bay watershed. These maps span across six eastern states and the District of Columbia and support communities of more than 18 million people.
LEARN had previously performed analysis only on the 30-meter resolution NLCD Tree Canopy product. The introduction of new high-resolution tree canopy data at 1-meter resolution provides 900-times more detail than before for counties and cities along the eastern seaboard, who can now analyze tree canopy change down to the scale of individual land parcels. This update demonstrated the benefits of significantly enhanced analysis capabilities and reinforced calls to extend this data set from regional to national coverage.
Training Cohorts Bring Support Directly to CommunitiesFollowing a first successful Forests & Trees Carbon Accounting Cohort Training Session in 2021, in July 2022, the LEARN project team launched a second training cohort to guide 20 communities in implementing the U.S. Community Protocol methods and using the LEARN tool. Participants represented municipal governments, tribes and states from across the country. In 2023, a third cohort was convened to support communities in integrating local, high-resolution data sets into analyses. This cohort also piloted the use of “plantable areas” analyses to help communities estimate potential impacts of tree planting initiatives.
New Updates in 2025 Further Expand LEARN’s CapabilitiesIn 2025, LEARN has integrated the most up-to-date NLCD data for land cover and tree canopy, spanning 20 years of land cover change (2001-2021) and more than a decade of tree canopy change (2011-2019).
Additionally, higher resolution (30-meter) maps of forest carbon pools and forest characteristics data like forest type and age class from the USFS BIGMAP project replaced the older 250-meter data sets, allowing for more precise calculations of carbon fluxes. Automated analyses now include additional insights on forest maturity, protection status and carbon stocks within maturity and protection groups.
Finally, another new feature allows users to input custom emission and removal factors, enabling users to tailor the tool’s default calculations to specific local conditions.
Next Steps for LEARN and GHG Monitoring for Forests and TreesThe LEARN tool has established itself as a trustworthy and easy-to-use tool to support communities in estimating GHG fluxes from the land sector. LEARN has been added by the U.S. Environmental Protection Agency to its Technical Assistance Forum Resource Library to help support Climate Pollution Reduction Grant (CPRG) recipients across the country, and the team plans to introduce the LEARN tool to CPRG grantees in 2025. Building upon growing user engagement, in 2025 LEARN will continue to expand its reach to stakeholders and broader geographic scales. This includes partnering with Crosswalk Labs to integrate land sector GHG flux insights into the Crosswalk platform, further expanding its impacts on climate efforts nationwide.
WRI and partners are continuing to seek input from stakeholders across the U.S. and around the world on how these methods may best be scaled across geographies, governments and technical capacities. In the future, this kind of data will be available for communities around the world, not just in the U.S. — read more here about upcoming developments in monitoring GHGs for forests and land worldwide.
For questions or to learn more, reach out to erin.glen@wri.org.
Forests United States Forest and Landscape Restoration greenhouse gases GHG emissions global forest watch Type Project Update Exclude From Blog Feed? 0 Projects Authors Erin Glen Nancy Harris Angela ScafidiADVISORY: World Resources Institute’s Stories to Watch 2025
WASHINGTON (January 15, 2025) – Join WRI’s President and CEO, Ani Dasgupta, on Thursday, January 30, 2025, from 9:00 – 10:30 AM EST / 3:00 – 4:30 PM CET for WRI’s flagship event, Stories to Watch — shedding light on the future of global climate finance.
At COP29 in Baku, world leaders came together around a bold new climate finance goal: How can we support countries in making the critical transition to clean energy while building the resilience and infrastructure needed to withstand the escalating impacts of climate change? They committed to reaching at least $300 billion annually by 2035 — though this is far from enough.
Join Ani as he presents four stories that break down the key challenges — and potential solutions — to this global effort: What is the money for? Where will the money come from? And what can be done to unlock more money through innovation and efficiency?
The event will also feature WRI leaders from around the world, sharing real-world examples and strategies to speed up action:
- Courtnae Bailey (Associate, Adaptation Finance): Adapting to climate change (St. Vincent and the Grenadines).
- Katie Ross (Senior Director, Climate Action): South Africa’s transition (Komati, South Africa).
- Melanie Robinson (Global Climate, Economics and Finance Director): Mobilizing $1.3 trillion for developing countries (Nairobi, Kenya).
- Pawan Mulukutla (Executive Program Director, WRI India): Attracting private capital with public policy (Bengaluru, India).
- Mirela Sandrini (Interim Country Director, WRI Brasil): Finding innovative ways to finance nature (São Paulo, Brazil).
WHAT
Stories to Watch 2025: WRI’s flagship event shedding light on the key challenges and potential solutions for climate finance in the year ahead.
WHO
Ani Dasgupta is President and CEO of WRI, where he leads efforts to realize the institute’s global vision of a future that benefits people, nature and climate. Dasgupta is a widely recognized authority in the areas of sustainable development, urban design and poverty alleviation. The event will also feature WRI experts from around the world.
WHEN
Thursday, January 30, 2025
9:00 – 10:30 AM EST / 3:00 – 4:30 PM CET
RSVP
Click here to register.
The presentation will be in English, with simultaneous interpretation available in French, Portuguese and Spanish. All registrants will receive access to a recording of the event.
If you have any questions, please reach out to Darla van Hoorn (Media Relations Manager), Darla.vanhoorn@wri.org.
Community Benefits Snapshots: SOO Green Transmission Line Community Engagement and Benefits
The SOO Green High-Voltage Direct Current (HVDC) Link is a 350-mile interregional underground electricity transmission line built mostly along an existing railroad right of way in Iowa and Illinois. The first of its kind in the United States, the project also aims to create local jobs and construct parallel infrastructure projects identified as priorities by the community; it has already begun giving out good neighbor payments to landowners whose property abuts the railway.
Context- Project title: SOO Green HVDC Link
- Location: Iowa and Illinois
- Sector: Transmission
- Developer: SOO Green HVDC Link LLC, in collaboration with a wide range of investors and partners including Jingoli Power and Siemens Energy
- Type of project agreement: None
SOO Green HVDC Link is an underground 350-mile, 2,100-megawatt (MW), 525-kilovolt (kV) line running from Mason City, Iowa to Yorkville, Illinois. It will connect wind energy generatedin states under MISO jurisdiction with the PJM market. The project primarily utilizes existing transportation rights of way mostly along the Canadian Pacific (CP) corridor, which means that most of the line will be underground on land controlled by railroads and highway authorities, co-located with the railroad right of way. Once completed, the line will be the longest underground HVDC line in the country. As of this writing, the line has secured a franchise — the equivalent of a Certificate of Public Convenience and Necessity (CPCN) — from the Iowa Utilities Board, as well as municipal franchises from 21 of 24 Iowa municipalities, and is actively engaged in obtaining approval from the final three. In Illinois, SOO Green will build the line without a CPCN as SOO Green is a merchant project that is not seeking eminent domain authority from the state. The project is expected to become operational in the early 2030s.
EngagementSOO Green’s landowner engagement began in the mid-2000s when it initiated talks with what was then the CP railroad to build an overhead transmission line within the company’s rights of way. Initially, this idea was a non-starter with CP because the proximity of an overhead transmission line could interfere with railroad operations, as well as create safety risks. By 2016, however, SOO Green had planned a buried line and reengaged CP in talks. By 2018, SOO Green and CP reached a power line agreement for an underground HVDC project.
Because the line will be located within CP’s right of way for much of its path, SOO Green has done very little easement negotiation with private landowners. Instead, much of its site control efforts have been devoted to securing municipal franchises from the Iowa cities the line will pass through, a requirement of Iowa state law. As such, SOO Green has held public meetings at both the county and municipal level in Iowa. Though no public meetings were required in Illinois, SOO Green voluntarily hosted county-wide public meetings to discuss the project. Additionally, SOO Green has engaged with the Iowa and Illinois Departments of Transportation to secure permits for segments in Iowa and for short stretches in Illinois where the line will run along highways and local roads.
SOO Green chose to pursue a franchise in Iowa that included eminent domain powers, protecting itself from legal challenges against its right to be in the railroad right of way. Incidentally, five landowners made such a challenge in SOO Green’s franchise proceeding, arguing that the original easements they signed with railroads only grant a railroad authority to construct tracks and do not authorize power transmission development. The Iowa Utilities Board declined to adjudicate this claim and further reasoned the line’s request for “eminent domain renders [their claims] moot.” In Illinois, SOO Green is exempted by Climate and Equitable Jobs Act legislation from applying for a CPCN as a merchant developer who does not plan to use eminent domain.
Finally, while SOO Green was not legally required to acquire private landowner consent along the line because of its co-location with the railroad rights of way, adjacent private landowners were still voluntarily engaged and compensated. SOO Green, like most developers, used a third-party land agent company to personally meet with landowners and work through good neighbor agreements, complaints and concerns.
Legal and Expected Benefits: These are legally required forms of compensation, such as taxes and eminent domain payments.
- Property taxes and payments in lieu of taxes: SOO Green commissioned Strategic Economic Research (SER) to conduct an economic impact study which addressed the question of taxation in Iowa. SER estimates that the line will generate $1.5 million in taxes each year for the state of Iowa (based on taxes of $7,000 per pole-mile in Iowa).
- In contrast, Illinois does not tax transmission lines. However, SOO Green plans to negotiate payments of $14 million over the first 20 years of its operation in lieu of taxes with local taxing entities, according to a report by the Illinois Power Agency.
- Municipal franchises: In at least three cases, municipalities opted to have SOO Green fund and construct infrastructure projects within the railroad rights of way which, absent the transmission line, would have been difficult for the city to negotiate independently with the railroad. A common request, especially for some of the larger cities along the line such as Dubuque, was to place infrastructure necessary for broadband expansion within their easement.
- Eminent domain and land payments: SOO Green might use eminent domain authority with a handful of landowners who have challenged the railroad’s authority to negotiate a power line agreement with SOO Green in Iowa but did not invoke it at all in Illinois. The project is, however, actively engaged in negotiations and hopes to avoid the use of eminent domain. Similarly, SOO Green developers were not legally required to compensate landowners whose land is adjacent to the rail easement. The “Community Grants” section below details their attempt to voluntarily compensate these individuals.
- Job creation: Given the unique underground construction methods and new technology, SOO Green has been working with local community colleges and economic development authorities near the route to build a local workforce. Through its “Competitive Edge” and “Hire360” apprenticeship programs, it has committed to create local jobs for underserved youth during project construction.
Procedural Benefits: Procedural benefits are a class of non-monetary and not required benefits that developers often undertake to maintain goodwill with host communities.
- Honoring Siting Requests: SOO Green honored the requests of cities to change the line route in at least one instance in Iowa. After a request by Bellevue for a line route to avoid the rail corridor because it would have impacted two adjacent roads, SOO Green compromised by diverting the line within the city.
Community Grants:
- Good neighbor payments: SOO Green has opted to give landowners whose property abuts the railroad right of way good neighbor payments. Given the narrow width of land being impacted, the payments themselves are usually a few hundred dollars, being proportional to the length of the adjacent landowner’s segments; a “cooperation agreement and mutual release” contract must be signed in order to obtain the benefit. While many along the line signed the contracts, some were hesitant. The landowners we interviewed viewed signing a contract as implicit acceptance and approval of the project — symbolic consent that some were not willing to give.
- Community development grants: SOO Green has pledged to fund community development grants in the line’s host communities. Some of these funds have already been committed to cities for co-located projects that arose in municipal franchise negotiations. The rest will be disbursed as grants either through existing apprenticeship and job programs that SOO Green has implemented or on an ad-hoc basis.
Co-location Benefits:
- Undergrounding the line: Undergrounding can provide community benefits; for example, it avoids visual and noise pollution. According to interviews with members of the host communities, some residents had environmental and safety concerns. However, every interviewee noted that they preferred an underground line along an existing transportation right of way to an overhead transmission line.
- Undergrounding can also enable high-priority community construction projects that would be otherwise hard to execute. For example, in Dubuque and Mason City, SOO Green will lay fiber optic cable conduit bundles and junction boxes in the trenches it digs for the HVDC line during construction. Other benefits include additional and adjacent surface improvements. As the developer explained, these projects would otherwise be hard to execute because of the time it takes for private and public entities to negotiate rail rights of way co-located infrastructure projects.
Undergrounding the transmission line along an existing right of way reduced local and community opposition to the project while making its siting easier. Given that grassroots resistance is often the norm with large transmission projects, the conspicuous lack of opposition to SOO Green — one of the few undergrounded long-distance lines in the U.S. — shows the potential value of undergrounding as a tool for quelling resistance in host communities. For example, the Iowa Farm Bureau was unable to oppose the project in public hearings because none of its farmer members were directly impacted by the project, and therefore none of the members opposed it. Additionally, in its approval of SOO Green’s CPCN, the Iowa Utilities Board used the line’s burial to dismiss safety concerns and its co-location with an existing right of way in its reasoning for why the project satisfied its franchise criteria, noting the preference for co-location of transmission assets in Iowa state code. (§478.18(2)).
Investment in locally determined community construction projects and programs helped build community support for the project. While it is common for transmission projects to provide local community grants, SOO Green is unique in its willingness to make substantial, community-identified and often contractual investments in projects and programs for host communities. SOO Green directly solicited projects from cities impacted by the line or its construction. Critically, these projects are actually obligated by the municipal franchises the company has signed with cities.
Challenges and GapsLocal tax authorities and communities were largely unsure of the project’s tax impacts, though it is unclear if this was a barrier to project acceptance. While the taxation of the project at the county level is fairly straightforward — $7,000 in tax per pole-mile — according to interviews with county officials, many county assessors and local tax districts did not think they could estimate the tax revenues they would receive for the project. This sentiment was widespread even though tax district revenue estimates were prepared by SER for SOO Green and SOO Green communicated these estimates in public meetings and press releases. According to a tax expert who reviewed the project, this disconnect may be attributable to two factors:
- Property taxes from transmission lines in Iowa are “replacement” taxes in that they are not determined by the value of the line itself. This differs from normal property taxation where a percentage of a property’s assessed value is paid in taxes annually. It appears that in some cases, tax districts didn’t understand this nuance and believed they would have to know the taxable value of the line itself to predict their revenue, hence their belief that they could not estimate their revenue at all.
- The allocation of county tax revenues from the line to local tax districts (e.g., towns, school districts, etc.) is not well defined. SER modelled allocation by looking at how many miles of the line went through each tax district and then weighting by millage rate. However, this is only one possible way by which taxes may be allocated.
While this confusion over taxes is notable given that tax revenue is such a substantial community benefit, it is unclear to what extent it affects perceptions of the project’s benefits at the local level.
Financing remains a broader concern for underground lines and contributed to skepticism of SOO Green at both the community and policy level. Recent studies show that while buried HVDC transmission is cost-competitive with traditional overhead AC transmission projects, it is two to four times the cost of overhead HVDC transmission. As such, utilities who rely on public rate recovery and on private investments have historically avoided undergrounding. Some community members interviewed were aware of these cost challenges and expressed skepticism of the line because of them. It is unclear how SOO Green is handling the possibility of cost overruns, a possibility that policy analysts voiced concern over in interviews, given that such overruns will affect the prices of RECs the project generates and subsequently what Illinois consumers will pay for them. However, when asked about financial concerns, SOO Green developers noted that the lifecycle costs of underground transmission are competitive with overhead costs, especially as extreme weather events become more commonplace.
Further Resources- SOO Green HVDC Link (project website)