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In this episode of The Climate Dad, host Mike Smith discusses significant climate news and predictions for 2025. He highlights the importance of addressing climate change, emphasizing the roles of political action, technological advancements, and personal responsibility. The conversation analyzes the evolving landscape of climate-related issues and solutions. Mike explores the impact of insurance markets, the rise of sustainable technologies, and the potential for climate-friendly policies under future administrations.
00:00 Introduction to Climate Predictions for 2025
04:45 Climate News Highlights
05:10 Predictions for Climate Weirding
07:00 Climate as a Political Issue
09:20 Economic Impacts of Climate Change
12:40 The Future of Batteries and Clean Energy
16:04 Carbon Markets and Offsets
Mike Smith (00:17)
Happy New Year everyone and welcome to episode 18 of The Climate Dad. the environmental podcast where we talk about and explain the news and science of climate change. I'm your host. My name is Mike Smith. I'm the father of two great kids and I'm also the founder of Aclymate the net zero solution, a climate solution for businesses without sustainability teams. Today I'm going to be predicting what climate stories are going to be driving our lives here in 2025 and making a few climate resolutions. But first here's your climate minute.
Let's start with some good climate news. Reporting from NPR goes towards a national regulation of gas utilities, specifically a proposed federal rule by the Pipeline and Hazardous Materials Safety Administration, you know, the good old PHMSA, would require gas utilities to find and fix leaks associated with their delivery of natural gas to both commercial and residential customers and the leaks around gas meters. So if that doesn't get you too excited because that may sound like a small problem, collectively these small problems actually become the largest source of methane emissions that escapes into the atmosphere in the United States. Anyways, it would put the onus on utilities to inspect more frequently and repair when they found issues. And the main trade group for these utilities, the American Gas Association, points out the gas utility methane emissions are down 70 % since 1990, but they're also supportive of these rules. As a result, this rule is expected to survive in the new administration. Now, the not so good.
Wells Fargo announced it was the second bank to leave the Net Zero Banking Alliance in December after Goldman Sachs. It didn't provide a reason for its departure, though I bet you can speculate. But Bloomberg reporting it appears to tie it to pressure from Representative Jim Jordan, the mudslinging Republican of Ohio, and his leading of the House Judiciary Committee to investigate the banking industry around climate change, alleging it all to be collusion,
A spokesman for the Net Zero Banking Alliance said that while five banks have left the Alliance since its formation in 2021, more than 100 have joined and have made quote, significant progress end quote on Net Zero targets. The Guardian is reporting that Chinese control of the EV market continues to consolidate with 76 % of all vehicles being purchased globally now being produced by Chinese companies. The report goes on to state that even though there is concern about trade wars moving forward, both from the United States and the EU, and the continued inability to access the American market. The majority of growth for these Chinese companies has been internal to China and also within surging demand within Russia.
Joanna Pluczinska from Reuters is reporting on a study commissioned by Transport and Environment about how the airline industry is failing to invest sufficiently in sustainable aviation fuel, or SAF. The study highlighted that Air France KLM as being the leading performer across the globe by a good margin with a B rating, while the US flagged United Airlines comes in second with a C rating. Three other US-based companies, Southwest Airlines, JetBlue, and Delta Airlines, were barely within the top 10, though all of them also had Cs.
Something you all should consider when you're booking that occasional flight. Also from Reuters, Europe is bracing for a spike in natural gas prices as the main pipelines bringing it from Russian oil fields run across Ukraine and both countries have indicated that they are no longer interested in keeping them open. This appears to indicate that the war in Ukraine is entering its terminal phase, but it also appears that Norwegian pipelines and US and Qatari LNG exports will be taking up some of the slack.
Finally, a couple of large loans are coming out of the closing days of the Biden administration. The first is a record $15 billion loan to California's largest utility, Pacific Gas and Electric, to reduce their emissions and to increase climate resiliency. The loan, which saves the company about a billion dollars in debt costs from the private market, will allow PG &E to expand the grid access for EVs, help with renewable energy generation for data centers and bury power lines to reduce wildfire risk and increase grid reliability.
A separate loan to the Ford Motor Company was for $9.6 billion was to build three manufacturing plants in Tennessee and Kentucky that are focused on the production of EV batteries and vehicles as part of the Biden administration's goal of having half of all new vehicles in 2030 be zero emission vehicles. Importantly, neither loan can legally be clawed back. So there you go. Climate good news sandwich today. But that is your Climate Minute.
Alright, with the new year just underway, I thought it'd be fun to try my hand at making a few climate predictions for 2025. We'll check back on them at the end of the year to see whether I had it right or not. But in the meantime, make sure to comment on YouTube, TikTok, LinkedIn, or elsewhere on whether you agree with my predictions and what you think I got wrong. With that said, here's the first of them. Global weirding is going to start getting really weird.
We all have become so focused on the insanity of our politics. That is just been hiding some really huge news stories that happened in plain sight on the climate in the last year. For example, as we've talked about, most of the US entered a flash drought in October due to almost no rain falling anywhere within the United States outside of a couple of areas that got hit by hurricanes. US News reported that more than, quote, 100 different long-term weather stations in 26 states, including Alaska, had their driest October on record.
There was no measurable rain in New York City, Houston, Dallas, Philadelphia, San Francisco, and even Sioux City, Iowa." End quote. At the same time, an island in the Philippines was hit with three different Cat 4 typhoons within 10 days. My prediction, and this is probably not that big of a prediction, so I'm starting with it, is that this is all going to accelerate. We're going to regularly see stories where Atlanta is colder than Anchorage, hurricanes form in the Mediterranean, and tropical birds are found in Minnesota.
along with the increasingly routine stories of weird floods, fires, and droughts. I'm not a climate scientist, but another story we've all ignored is the melting of the Arctic ice sheet, which will potentially completely disappear in 2027 according to some reporting. That coupled with the drastic slowing of the Atlantic Meridional Ocean Circulation or AMOC is
is going to be the major climate news. And I think that placing a big dark heat sink at the North Pole where there used to be a white reflector is just going to have massive impact on the climate that we all experience. And then in 2025, it's just going to be too much to ignore any longer. Again, not a massive prediction, but I'll bet you it's an issue that everyone is talking about the coming year. That drives me to my second prediction for 2025. Climate is going to become a top level political issue again.
There's going to be lot of intersecting causes, but I've seen from experience that when things get weird, it's hard not to talk about it Katrina the hurricane Katrina and the movie An Inconvenient Truth drove a lot of people to talk about in climate in 2006 San Francisco covered in wildfire smoke in 2020 shocked everyone to talk about forests and climate And I think we're just going to see a lot more of this moving forward We also tend to deprioritize the issue when there's a climate focused administration
but we now obviously have a climate hostile administration moving into the White House later this month, and with a loud climate denier in the Oval Office. So I think it's really gonna change everyone's internal calculus. However, even with a climate denier in chief, even the pro-fossil fuel nominee for the Department of Energy admits that climate is an issue to deal with. And the other thing is I really suspect that Trump himself knows climate is an issue. I...
For whatever reason, the guy has been really angling publicly for Denmark to sell Greenland to the United States. And it just seems baffling to me until you think about it within a climate lens. We've long had access for security purposes to Greenland. Bomber bases have been there since the early Cold War. So the only reason to be angling for such a low population, low development land is because it's resource rich and well located in a very warming world.
So here's a bit of a bold projection for you. I think that it's going to leak in 2025 that Trump secretly actually wants to act on climate somehow, though the action he does probably won't happen until 2026 or 2027. I think he's probably incapable of leading the much of the world on any issue, especially this one, but he will have an eye, I think, towards his legacy, his increasing age, his status as a lame duck president.
And I think there's a real opportunity for a Nixon to China type moment. It's worth remembering that the EPA or the Environmental Protection Agency, the Clean Air Act of 1970, the Clean Water Act of 1972, and the Endangered Species Act of 1973, they were all created by Richard Nixon. Along those lines, my third prediction is that I think that we're gonna see a period of climate related tariffs. In Trump v1, we saw a lot of tariffs and the guy ran on it heavily in 2024.
Trump v2 will, I think, stop relying exclusively on, quote, national security as the reason for these tariffs. And we're going to start really leaning more upon climate. I think there is some precedent here, too. Under talked about, but in November of 2023, the Republican senator of Louisiana, Bill Cassidy, introduced the Foreign Pollution Free Act, co-sponsored by Senator Lindsey Graham, a well-known Trump ally.
This legislation proposed imposing tariffs on imports from countries with higher greenhouse gas emissions in the United States, targeting products such as steel, aluminum, and cement. And the goal was to protect US industries from unfair competition and to encourage global emissions reductions. Louisiana is an oil state, and the bill itself suggested a tiered tariff system based on the carbon intensity of imported goods. Those specific rates were unspecified.
It did aim to level the playing field for US manufacturers adhering to stricter environmental standards, especially as there's the carbon border adjustment mechanism coming into line in Europe. I think that since this doesn't penalize US fossil fuel producers, and I do think that this becomes a possible pathway for the GOP to try to claim leadership on the issue while simultaneously engaging in the trade war that they ran upon.
My next and scariest to the average person prediction comes here in a minute. But first, I'm going to spend 15 seconds talking about Aclymate and then you're going to have The Climate Dad joke of the week. If you're thinking about the ways to improve your impact on the planet, or maybe just your company is being required to report its footprint, we'd love to help you over here at Aclymate, where we have the easiest, the most intuitive climate solution for your business. We're going to get you that baseline environmental assessment you need, show you ways to reduce your carbon footprint, and we're going to get you on that path to net zero.
It's going to help your environmental branding. It's going to help you win new customers. More importantly, it's going to keep your most valuable ones. It's going to attract and retain the talent you need from the rising climate generation. And our green business certification program is going to help you complete a sustainability audit. Potentially, you're looking to improve your EcoVadis scores or win certifications with organizations like CDP, B Corp, or Green Business Benchmark
Or maybe you're like some of our customers and you're just looking to purchase some carbon offsets, but you need a reliable carbon credit broker. Well, we got you covered at Aclymate. We have a friendly climate accounting solution that's a hybrid of software and human services. And we also have the best carbon offset programs and the leading selection of sustainable projects on the web.
Now, here's your Climate Dad joke of week. Why did the scientist bring Donald Trump to the climate conference?
because he's the only one who could make hot air a bipartisan issue.
All right, let's move away from politics. As I promised, my next prediction is a big one and it's a little scary. It's about housing and a reemergence of a term you wish you could forget. Mortgage-backed securities. We've been talking about insurance a bit here on The Climate Dad and one thing we haven't mentioned but was recently reported by Bloomberg is that in 2023, insurance companies paid out $1.11 for every dollar they made in premiums.
They were losing a dollar and 11 for every dollar they made and that 2024 is expected to be the fifth year in a row that they've lost money Insurance companies as we all know aren't in the business of losing money And they're starting to do something about it We've already talked about how they were canceling insurance in places like coastal Florida and wildfire fire prone, California But a report released from the Senate Budget Committee shows that the issue is national including a lot of places like
North Carolina, Washington and more. Specifically, the report states that, for example, of the top 100 counties for insurance non-renewal in the United States, 13 of them were in inland North Carolina. And before you kind of state the obvious, the report was published before the hurricanes of 2024 smashed the landscape with the historic flooding.
So North Carolina was already suffering from insurance uninsurability and the hurricanes that hit it are only going to exasperate that. Insurance companies are going to accelerate their cutting of homes from being able to access affordable insurance. And it's going to happen across the country and not in the places that you expect. So here's my next prediction. In 2025, we're going to see at least one mortgage-backed security become insolvent for climate risk.
and it's going to send shockwaves throughout the US economy. As we all learn from the 2008 financial crisis, mortgages have been turned in financial products by bundling them together into risk pools called mortgage-backed securities. I wish I didn't have to know about it, but these instruments are now known to carry higher risk than they used to. However, a big part of their risk analysis is still based upon the insurability of the underlying assets. Financial institutions, both insurers and security investors,
will try to push this risk onto the government's shoulders, because that's typically what happens, and they're going to be looking for them to be the insurer of last resort. I just don't think it's very likely that the government's going to move very effectively or quickly enough to head off the problem.
My next prediction, however, is a little sunnier. I think batteries are going to become more mainstream. Batteries, like a lot of other technologies in the climate space, have followed an exponential curve associated with economies of scale. Just like solar and wind has gotten much, much cheaper over the decades and following a pretty predictable curve, there's strong evidence that batteries are doing the same.
It's really no special prediction here for anybody that follows climate, but I do expect batteries to account for over 1 % of delivered electricity within the United States in 2025. I also think that the demand for clean energy and electricity, specifically by technology companies to power data centers, is going to completely shake up the US electricity sector. And we did talk about this at the end, in our end of 2024 episode.
When you couple this reshuffling of the energy sector with the discovery of huge domestic lithium resources and underground brines, the need for SAF, the emerging hydrogen economy, and the arrival of peak gasoline consumption already, my next prediction is this. Traditional fossil fuel companies are going to be brought to work on the side of climate in meaningful ways that go beyond their historical greenwashing and to work with contractual penalties if they should fail.
And I would expect to see at least one pro-climate announcement from a fossil fuel company in each of the following areas. Acquisition of a major sustainable aviation fuel producer and a corresponding off-take agreement with a major airline. The announcement, the second one, the announcement of a major lithium mining operation domestically within the United States. And third, the development of the largest carbon capture facility in the world.
How's that for a prediction? We're going to find out in 12 months. Finally, I want to talk to you about carbon markets. I've got a couple of predictions here. The first is that the sector that has been held up as the shining star of carbon, technology-based carbon removals, such as direct air capture, will face some really bad press.
There's a lot going on here, but they've mostly escaped deep scrutiny from the public. And as the oil majors get more involved, I'm really expecting that to change. They're doing really important work, I think, but they've also been pre-selling emissions reductions. And I think that they've been over-promising and are going to under-deliver. And as they get more media scrutiny, I don't think the Guardian's going to look too kindly upon it. When you add in the confusion between carbon removals, which capture carbon emissions from the atmosphere,
and carbon capture, which captures carbon emissions from smokestacks and by extension extends fossil fuel extraction, I think the press story is going to get messy.
The second carbon market prediction and my last is that nature based carbon offsets are going to have a resurgence. We've been past the peak of exuberance that was the 2021 market and the valley of despair that was 2022 through 23, but offsets have been plugging along and I'm predicting that they're going to have a good 2025. Why do I think that? Well, one, it's a market based solution and that's going to fit into the current political climate a lot more cleanly.
And then two, has come on the back end of, it's come through its period of scrutiny stronger and better structured. And then finally, I think science-based targets initiatives finally, finally going to decide what they should have been saying all along. That the responsible way to decarbonize is to cut your full scope emissions every year and offset the remainder. They'll probably limit that to scope three emissions, but there's plenty there to juice demand for offsets.
I don't think it's really going to be like a rush to market per se, but I finally, I do think it finally will be lasting.
All right, here are my predictions again. One, climate's going to get weird and everyone's going to notice. Two, climate will return to prominence as a political issue and that three, it will leak that Trump wants to act on climate somehow, though the action he does want to enact upon won't happen until following years. Four, I think that there's going to be the introduction of climate friendly tariffs.
that are going to be achieving those political ends, also our climate goals. Five, I think we're going to see a climate induced failure of a mortgage backed security. Six, batteries account will account for over 1 % of delivered electricity within the United States in 2025. Number seven, fossil fuel companies are going to announce major climate friendly actions in sustainable aviation fuel, lithium extraction and direct air capture. Number eight,
Technology-based carbon removals are going to have rough sledding in the press. And finally, nine, nature-based carbon offsets are going to have a great year.
Now, since today is a predictions episode, I won't have the traditional three takeaways for you, but I do have some New Year's resolutions that I would propose for you. And here they are. One, you can't control insurance markets, but you can control insurance. You're almost certainly underinsured. Resolve to find where that problem is and to fix it. Your family will thank you for it. Two, remain open to new friends.
Market dynamics are going to bring new people to the climate table. So make sure you leave a spot open for them. Politics and our climate future can make for strange bedfellows, but our future depends upon it. And three, do something about your own personal footprint and your work footprint. Your mantra, as always, should be to measure, reduce, and offset. Ideally, it should be all three. So get to it. There's no time to waste. With that.
I'll end by saying that we want to hear from you here at The Climate Dad. Go to Aclymate.com or send an email to theclimatedad at Aclymate.com to submit a question for us or the show. Again, Aclymate is spelled A-C-L-Y-M-A-T-E. If your business needs help measuring, reducing, reporting, or offsetting your company's climate footprint, please reach out to our team here at Aclymate. We're going to get you set up with the best, the most affordable, the easiest climate solution out there.
Thanks everybody for listening. Make sure to subscribe to The Climate Dad where you get your podcasts and to share, like, and comment on social media. Happy New Year, everyone.
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