The week in climate policy: 4 stories you should follow

Here are the major climate policy developments to follow the week of Aug. 5:

• Chevron muscles its way out of California: Chevron is relocating its headquarters from California to Houston, a move that reflects the company’s response to California’s aggressive climate action policies. The state of California has sued Chevron and other oil companies for misleading the public about fossil fuel risks. Chevron’s CEO Mike Wirth criticized the lawsuit, calling for a global policy response to climate change. Chevron’s move after more than 140 years in California also coincides with a drop in the oil major’s second-quarter profit, with shares falling almost 3 percent. The relocation aligns with broader industry trends that have seen other big companies consolidating operations and relocating to Texas, which offers a favorable regulatory environment and no personal income tax. Exxon Mobil recently moved its R&D center from New Jersey to Houston, and Tesla CEO Elon Musk, objecting to a new California law that protects students from having their gender identity or sexual orientation revealed to their parents against their will, said in July that he will relocate the company to Austin.
• It pays to be a Western farmer during a drought: The Biden administration is investing up to $400 million to help farmers in the Western U.S. save water amid severe drought conditions. The initiative aims to conserve up to approximately 16 billion gallons by incentivizing water-saving technologies and practices. “We want to scale up the tools available to keep farmers farming, while also voluntarily conserving water and expanding markets for water-saving commodities,” said Agriculture Secretary Tom Vilsack in a written statement. The Department of Agriculture will distribute funds to 18 water districts across 11 states, including Idaho, Utah and California, and will then collaborate with farmers to implement these measures. The program seeks to support agricultural production while addressing water shortages exacerbated by prolonged drought, overuse of the Colorado River and climate change.
• A global accounting body confirms that investors want climate impact disclosures: The International Accounting Standards Board (IASB) proposed new guidance to improve how companies report the impact of climate change on their financial performance. The IASB maintains that current stand-alone sustainability disclosures often fail to provide investors with a clear view of how climate-related issues affect financial figures. The IASB’s proposed guidance aims to integrate climate impact information into financial statements more effectively, addressing investor concerns about the consistency and adequacy of climate-related financial disclosures. The consultation on these proposed guidelines seeks to ensure that financial statements better reflect the potential effects of climate change on assets, liabilities, income and expenses.
• IRA clean energy tax credits cash in: The Inflation Reduction Act tax credit transfer market is booming, according to a report from finance technology company Crux. The report found that total transfer activity in 2023 reached nearly $9 billion, with the same amount in the first half of 2024. This is due to the IRS’s April release of guidance for the tax credit transferability mechanism, allowing increased use of specific credits such as the 45X advanced manufacturing credit. In 2024 so far, around 75 percent of tax credit transfers have come from wind, solar and solar plus storage. “This is a really positive development,” said Alfred Johnson, CEO of Crux, “because what it means is that even more demand can be accommodated within the structures that allow the market to grow in size.”