BY BRADFORD MCKEE

FROM THE FEBRUARY 2018 ISSUE OF LANDSCAPE ARCHITECTURE MAGAZINE.

In November, Moody’s Investors Service, the bond rating agency, released a cautionary report on climate change. Looking ahead, the report said, the effects of what it describes as climate trends and climate shocks are sure to become a “growing negative credit factor” for states, localities, or utilities that don’t appear to be responding to potential climate change effects through mitigation or adaptation. Cities and others issue bonds to borrow money for building things such as infrastructure or schools. They need investors to know they’re a good risk. Moody’s came out to say that it has begun deciding, based on climate resilience among a matrix of other factors, whether a given risk is good or bad. “If you’re exposed,” one Moody’s analyst told Bloomberg, “we know that.”

The other of the two biggest rating agencies, Standard & Poor’s, is also keenly onto climate (it and Moody’s together run 80 percent of the bond rating business). It released a report in October to explain how municipal bond issuers will be affected by climate impacts. Like Moody’s, S&P specified two theaters of risk: the sudden extreme event, such as a hurricane, and “more gradual changes to the environment affecting land use, employment, and economic activity that support credit quality.”

This may all seem very back-office in the design world, and for now it is. It is also, critically, moving to the fore as the federal stance on climate change and its many hazards is not only in retreat but in vicious denial. Trump administration appointees, who are like drones for industry, are ordering the removal of references to climate change in agency communications. The administration is also purging our government of good-faith, intelligent scientists who recognize the stakes for the country in confronting carbon emissions and defending against a rapidly changing physical environment. In August, the administration undid an Obama-era requirement that federal infrastructure projects to build roads and bridges account for future climate change effects in their designs, which is sheer idiocy.

Insurers of cities and of individuals have been signaling for years that their tolerance for climate-related losses is finite. The losses come from floods, fires, heat deaths, crop losses, depopulation in the case of New Orleans, and a huge surprise bill, as the Moody’s report notes, for the Oroville Dam in California ($275 million). And then there is Puerto Rico’s wrecked power grid. Along with insurers, bond rating agencies can be seen as a deep state (forgive the term) in reality-based programming for the era of climate change.

Is this a new brake on climate heedlessness? The rating agencies would have you think it’s not so new. Michael Wertz, a Moody’s vice president and senior analyst who led the climate report, told me the agency has been observing climate risks for some time. But the Moody’s report struck Cooper Martin, the program director of the Sustainable Cities Institute at the National League of Cities, as a “complete reversal.” Moody’s had earlier stated its interest in the ways cities are confronting climate, “but they weren’t going to proactively or preemptively make changes based on climate,” Martin said. “They would look at the ability to pay, rebuild, and recover, and factor that in, but until late November or early December, they weren’t proactively factoring climate change. This is a big reversal in that sense.”

Either way, it’s a significant set of moves. One thing Martin said he does not welcome is the laying of all responsibility for climate action at the feet of cities. But what these ratings considerations give to landscape architects is an irresistible point of persuasion around climate preparedness when their clients are local officials and taxpayers hoping to attract investment. The alternative for them will be to do nothing and watch those bond ratings fall to junk status, and nobody wants that.