Published

3 months ago

February 24, 2026

Alice Rush

After a turbulent year for sustainability in 2025, many businesses are reassessing how to move forward on climate action. While the impacts of global warming are accelerating, political and regulatory support for climate initiatives has become increasingly uneven across regions. For companies navigating climate risk, sustainability disclosures, and reputational exposure, this uncertainty raises a critical question: how will climate action be credible and valued over the long term?

As we look to 2026, two clear themes are emerging. First, businesses need a steady, long-term approach to managing carbon emissions that is resilient to political shifts. Second, governments, global coalitions, and leading climate frameworks are reinforcing the role of high-integrity carbon credits—providing clearer rules for how credits can be used alongside decarbonization, establishing global quality standards, and offering guidance that protects companies from greenwashing accusations. Together, these developments signal an important evolution in how carbon credits fit into credible climate strategies.

Executive Takeaway

In 2026, credible climate action is no longer about choosing between decarbonization and carbon credits—it is about using both correctly. New guidance from global coalitions and frameworks such as The Coalition to Grow Carbon Markets and the Science Based Targets initiative (SBTi) is clarifying how high‑integrity carbon credits can complement sustained emissions reductions, mobilize global climate finance, and support transparent, defensible climate claims. For businesses, these developments reduce uncertainty and greenwashing risk while reinforcing the need for disciplined project selection, clear disclosures, and alignment between carbon credit attributes and their intended climate use.

Businesses Need a Steady, Long‑Term Strategy for Carbon Footprint Management

Global warming and climate change are happening, and they are not going away. Businesses and individuals are feeling the effects in very real ways. Higher temperatures are increasing our energy consumption and costs. (2) More frequent and severe storms are driving up insurance costs. (3) Tidal flooding events are more common. (4) While more talked about signs of global warming like shrinking glaciers and retreating sea ice feel like another world, global warming will increasingly affect all of us.

Businesses need to view carbon emissions are a long-term liability risk in addition to corporate environmental responsibility. Companies already face negative public and customer perception for greenhouse gas emissions, and regulatory penalties could increase over time. 2026 will have several new regulatory requirements in sustainability and climate. Australia, Hong Kong, Indonesia, Malaysia, Singapore and Thailand have enhanced their climate-related disclosure requirements. (7) EU’s Carbon Border Adjustment Mechanism (CBAM) also enters its definitive phase. This trend will only continue. As the effects of global warming build, the historical impacts that a business has not addressed become an increasing liability concern. advances

Advances in understanding climate science, developments in zero emission technology, and progress in greenhouse gas regulation teach us that climate action will not be an abrupt shift. It will be a long-term sustained transition by businesses, governments, and society. Good business leaders recognize the difference between short-term political fluctuations and long-term drivers like global warming. It is inefficient for businesses to reactively stop and start programs based on the trends of the moment. Successful business leaders recognize long-term drivers and maintain programs to create future competitive advantages. The best way to mitigate the liability of greenhouse gas emissions is with consistent progress and action over time. Businesses who continue to implement and advance their climate programs will reduce their historic greenhouse gas liability and position their companies for long-term success. This is also an important way for a business to show customers that it cares about its impact on the planet.

Carbon Credits are an Important Part of Climate Action, Especially in Times Like This

Widespread and consistent government support for the transition to a net-zero economy has been difficult to achieve. Progress is challenging when government programs stop and start with political changes. A major benefit of voluntary carbon projects is that they don’t rely on government support. They rely on climate finance from businesses and individuals who purchase carbon credits to take responsibility for their footprint by contributing to global greenhouse gas reduction. Carbon credits are a way for businesses and individuals to drive carbon reduction and sustainability independent of the politics of the moment.

Carbon markets also help reduce the cost to society for climate action by directing funding to projects that achieve the biggest impact at the lowest cost. Even long-time climate activist Bill Gates acknowledged that social well-being must be maintained while we address global warming. (1) With limited funds to drive economic growth, social welfare, and carbon reduction, it is in everyone’s best interest to make climate action as efficient as possible.

Lastly, while the priority is eliminating our own carbon emissions wherever possible, we know that is not enough. Our global carbon reduction needs are bigger than our ability to eliminate our emissions. Supporting high-quality voluntary carbon projects alongside science-aligned carbon reduction is the new formula for leading climate action.

Climate Action in 2026: New Rules Add High-Integrity Carbon Credits to Aggressive Decarbonization

Governments and Climate Leaders want Aggressive Carbon Reduction and Global Climate Finance

Government and climate leaders focused on achieving the greatest climate progress to recognize the value of carbon credits in climate action. The governments of UK, France, Switzerland, Luxembourg, Canada, New Zealand, Kenya, Panama, Peru, and Zambia are leading The Coalition to Grow Carbon Markets which launched at London Climate Action Week 2025. The goal of The Coalition is to, “drive climate-positive growth and accelerate the pace of emissions reductions worldwide by strengthening the incentives businesses need to invest in high-integrity carbon credits across carbon markets, including voluntary and Article 6 markets.” (5) It recognizes that carbon credit markets are an under-used tool to drive investment to the global low-carbon transformation and put a value on the greenhouse gas (GHG). (5)

“With a $1.3 trillion annual climate finance gap, we must unlock the full potential of private sector action to accelerate emissions reductions and drive investment at scale.” Philippe Varin, Chair, International Chamber of Commerce (ICC). (5)

Coalition partners include World Business Council for Sustainable Development (WBCSD), Integrity Council for the Voluntary Carbon Market (ICVCM), World Bank, International Chamber of Commerce (ICC), and International Emissions Trading Association (IETA), which have worked closely with the Coalition to inform and shape the outputs.

The Coalition’s Shared Principles aim to align private sector action with national and global climate goals by providing direction, clarity, and confidence for companies to grow their voluntary carbon credit demand, alongside deep decarbonization, and to make credible claims regarding these actions. Companies who follow these rules ensure a high standard for carbon project integrity and also have important protection against greenwashing accusations. The Shared Principles include: (5)

Use carbon credits in addition to decarbonization

Companies should prioritize measurable and sustained direct and indirect emissions reductions with carbon credits used in addition to decarbonization, in line with the mitigation hierarchy

Use carbon credits with high environmental integrity

Companies should retire carbon credits of high environmental integrity

Uphold fair price, social safeguards, and, where applicable, support co-benefits for people and nature

Companies should source carbon credits from activities that meet rigorous requirements for social, economic, and environmental safeguards

Disclose carbon credit use publicly and transparently

Companies should publicly and transparently disclose how carbon credits are used as part of their climate strategies

Make accurate, substantiated claims involving carbon credit use

Companies should ensure that claims involving carbon credits are clear, truthful, and substantiated, avoiding greenwashing and misleading representations

Support growth of high-integrity carbon credit markets

In a rapidly evolving market for voluntary carbon credit use, companies should cooperate with other market participants to help improve market functionality.

SBTi and the Evolution of Business Climate Claims

Science Based Targets Initiative (SBTi), the leading global framework for business climate action, is also undertaking its first broad revision of the Net Zero Standard. Among other changes, SBTi will add rules for the use of permanent carbon removals in business net-zero plans and recognition for addressing ongoing emissions with high-integrity carbon credits. The new Net Zero Standard is expected to be published in spring 2026 and becomes mandatory beginning January 1, 2028. There are two Key Elements of the Net Zero Standard Revision Related to Carbon Credits: (6)

Companies can start using durable Carbon Removals now to achieve near-term and long-term carbon removal goals for Scope 1 Residual Emission requirements in their net-zero plan.
SBTi will also recognize companies who use high-integrity carbon credits to address “ongoing emissions” (those released during the decarbonization journey), if they also achieved their carbon reduction goals for the year. SBTi states that by taking responsibility for these ongoing emissions, companies can help limit temperature overshoot, reduce transition risks, and support climate solutions.

This also reflects the increasing importance of aligning the attributes of a carbon reduction project with the intended use. SBTi identifies that only durable removal credits can be used for science-aligned global net-zero progress because the carbon removal has the same lifetime as carbon emitted. Non-durable carbon removals and carbon reductions/avoidances can be used to address ongoing emissions because they are not tied to a science-aligned net zero goal. This element of SBTi focuses instead on driving climate finance that supports the transition to a net-zero economy and invests in natural climate resilience.

SBTi also provides support for businesses who make climate claims when they follow these rules. The latest update on the Corporate Net Zero Standard Revision says, “Companies that meet the recognition criteria and public reporting criteria in CNZS-C25 shall be eligible to make claims related to Ongoing Emissions Responsibility. (6) Similar to The Coalition to Grow Carbon Markets, companies who follow SBTi rules ensure a high standard for carbon project integrity and have important protection against greenwashing accusations. SBTi also provides sample statements on how to make a credible claim about addressing ongoing emissions: (6)

“Between 2025 and 2030, we took responsibility for 50% of our ongoing emissions over the five-year target timeframe as a contribution to global net-zero, achieving SBTi Ongoing Emissions Responsibility Recognized status.” Mandatory elements:
“We funded 100,000 t CO2e of third-party verified emissions reductions beyond our value chain to take responsibility for 50% of ongoing emissions as a contribution to global net-zero.”
“We supported 800,000 tCO₂e of verified ex-post mitigation outcomes (40% of our total ongoing emissions) through emission reductions and carbon removals.”

It is worth mentioning that many, including SBTi, have moved away from the phrase “offsetting” because some interpreted it to suggest that carbon emissions have been cancelled. Instead, the climate science community is moving towards the view of carbon credits as a positive contribution to the global climate. At Terrapass we also increasingly refer to carbon credits as a climate contribution. However, “carbon offsetting” is historically and today one of the most widely recognized terms for climate action. Many people and companies who want to make a climate contribution still use this phrase. It is important to connect with everyone looking for help with climate action. For this reason, Terrapass still references carbon offsetting as we also transition towards climate contribution language.

Resolving Critical Needs for Business Climate Action

The Coalition to Grow Carbon Markets and SBTi Net Zero Standard 2.0 solve problematic gaps in sustainability and climate action. Companies are not in the business of creating sustainability rules. They need independent organizations with scientific and administrative rigor to set rules that can be followed with confidence. Globally aligned standards for carbon project quality are essential. That was lacking historically and led to inconsistencies in project quality that drove much of the controversy about carbon markets. However, new global quality standards like ICVCM have addressed this gap, and we are seeing climate initiatives across the world align with this standard.

In addition to rules for project quality, we also need independent organizations that define how businesses should use carbon credits and promote their climate contributions. The new rules from The Coalition to Grow Carbon Markets and SBTi drive climate progress by giving businesses confidence in how to use carbon credits and how to talk about it. This gives businesses much needed protection from greenwashing accusations by pointing to the rules created by independent global climate leaders.

Build a Credible Climate Strategy

If your organization is evaluating how carbon credits fit into your climate strategy — whether you’re
prioritizing decarbonization, addressing ongoing emissions, or navigating evolving disclosure and climate
claims guidance — Terrapass Advisors can help.

Our team works with businesses to assess project integrity, align carbon credit use with leading global
frameworks, and support transparent, defensible climate claims as part of a long-term sustainability strategy.

Get Started on Your Sustainability Journey

Sources:

(1) https://www.gatesnotes.com/home/home-page-topic/reader/three-tough-truths-about-climate

(2) https://www.climatecentral.org/climate-matters/record-heat-rising

(3) https://www.usnews.com/insurance/homeowners-insurance/climate-change-and-rates

(4) https://www.noaa.gov/news-release/us-high-tide-flooding-continues-to-break-records

(5) https://coalitiontogrowcarbonmarkets.org/shared-principles/

(6) https://sciencebasedtargets.org/developing-the-net-zero-standard

(7) https://www.slaughterandmay.com/services/practices/environmental-social-and-governance/esg-in-apac-2025/key-themes-and-observations/

The post Climate Action in 2026: New Rules Add High-Integrity Carbon Credits to Aggressive Decarbonization appeared first on Terrapass.

Carbon Footprint

Finding Nature Based Solutions in Your Supply Chain

Published

6 days ago

May 20, 2026

Alice Rush

“…Protecting nature makes our business more resilient…”

Julie Brown, Chief Financial Officer, GSK, and Co-Chair, A4S CFO Leadership Network (Europe)

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For companies with land, water, food, fiber, or commodity exposure, the supply chain may be the most practical place to turn nature from a risk into an operating asset.

Your supply chain already has a nature strategy. It may be undocumented. It may live in procurement files, supplier contracts, commodity maps, and one spreadsheet nobody opens without coffee. But it exists.

If your business depends on farms, forests, water, soil, packaging, rubber, timber, fibers, minerals, or food ingredients, nature is part of your operating system. The question is whether you manage that system with intent, or discover it during a disruption, audit, or difficult board question.

That is why more companies are asking how to find Nature-Based Solutions in Your Supply Chain. Do not begin by shopping for offsets. Begin by asking where nature already affects cost, continuity, emissions, regulatory exposure, and supplier resilience.

What Nature-Based Solutions in Your Supply Chain Means

The European Commission defines nature-based solutions as approaches inspired and supported by nature that are cost-effective, deliver environmental, social, and economic benefits, and help build resilience. They should also benefit biodiversity and support ecosystem services.

In supply-chain terms, that becomes practical. Nature-based solutions in your supply chain can include agroforestry in cocoa, coffee, rubber, or palm supply chains. They can include soil health programs for food ingredients, watershed restoration near water-intensive operations, mangrove restoration linked to coastal sourcing regions, and avoided deforestation in forest-linked commodities.

The key test is business relevance. If your procurement team relies on a landscape, watershed, crop, or supplier base, that is where opportunity may sit. The best projects do not hover outside the business like a framed certificate. They plug into the system that already produces your revenue.

Why the Boardroom Should Care

For many companies, the largest climate and nature exposure sits outside direct operations. The GHG Protocol Scope 3 Standard gives companies a method to account for and report value-chain emissions across sectors. Purchased goods, land use, transport, supplier energy, and product use can make direct emissions look like the visible tip of a very large iceberg.

The Taskforce on Nature-related Financial Disclosures notes that many nature-related dependencies, impacts, risks, and opportunities arise upstream and downstream. That is why nature-based supply chain investments matter to boards. You are managing supply security, audit readiness, investor confidence, and regulatory preparedness.

For companies exposed to EU markets, this also connects to rules and expectations such as CSRD, CSDDD, EUDR, and SBTi FLAG.

Step One: Map Where You Touch Land, Water, and Living Systems

Finding Nature-Based Solutions in Your Supply Chain starts with mapping, not marketing.

Begin with procurement and Scope 3 data. Which categories carry high spend, high emissions, or high sourcing risk? Which suppliers depend on agriculture, forestry, mining, water-intensive processing, or land conversion? Which regions face water stress, heat, flood risk, soil degradation, deforestation, or biodiversity pressure?

The Science Based Targets Network uses a clear process for companies: assess, prioritize, set targets, act, and track. That sequence keeps companies from treating nature as a mood board. You identify where the business has exposure, then decide where intervention can create measurable value.

Step Two: Look for Operational Value Before Carbon Value

This is the center of CCC’s Dual-Value Model. A nature-based supply chain investment should do useful work for the business before anyone counts the carbon.

Agroforestry may improve farmer resilience, shade crops, protect soil, and reduce pressure on forests. Watershed restoration may reduce water risk for beverage, textile, or manufacturing sites. Soil health programs may improve the stability of agricultural inputs.

Carbon and sustainability value can still be created. In some cases, the project may support Scope 3 insetting. In others, it may generate verified carbon credits. Sometimes the main value may be resilience, readiness, and better supplier data.

The IPCC has found that ecosystem-based adaptation can reduce climate risks to people, biodiversity, and ecosystem services, with multiple co-benefits, while also warning that effectiveness declines as warming increases. That is a sober argument for acting early.

Step Three: Separate Insetting, Offsetting, and Resilience

Nature-based solutions in your supply chain are not automatically carbon credits. They are not automatically Scope 3 reductions either.

An insetting opportunity usually sits inside or close to your value chain. It may support Scope 3 reporting if the accounting rules, project boundaries, supplier connection, and data quality are strong enough.

An offsetting opportunity usually involves verified credits outside your value chain. High-quality credits can still play a role for residual emissions, but they should not distract from direct reductions or credible value-chain work.

A resilience opportunity may deliver business value even if you cannot claim a Scope 3 reduction immediately. That may include water security, supplier capacity, land restoration, biodiversity protection, or regulatory readiness.

Gold Standard’s Scope 3 value-chain guidance focuses on reporting emissions reductions from interventions in purchased goods and services. Verra’s Scope 3 Standard Program is being developed to certify value-chain interventions and issue units for companies’ emissions accounting. The direction is clear: stronger evidence, tighter boundaries, and more disciplined claims.

Step Four: Design for Audit-Readiness From the Beginning

Weak data is where promising nature projects go to become expensive anecdotes.

Before public claims are made, you need to know the baseline. What would have happened without the project? Who owns or manages the land? Which suppliers are involved? How will outcomes be measured? How will leakage, permanence, and double counting be addressed?

The GHG Protocol Land Sector and Removals Standard gives companies methods to quantify, report, and track land emissions, CO2 removals, and related metrics. This matters because land projects are rarely neat. Farms change practices. Suppliers shift volumes. Weather changes outcomes.

What Recent Corporate Examples Show

Recent case studies show that supply-chain nature work is becoming more serious, and more scrutinized.

Reuters has reported on insetting to reduce emissions within supply chains, including examples linked to Reckitt, Danone, Nestlé, Earthworm Foundation, and Nature-based Insights. The same article highlights familiar problems: measurement, double counting, supplier incentives, and credibility.

Reuters has also reported on companies using the Science Based Targets Network process to examine nature impacts. GSK, Holcim, and Kering were among the first companies with validated science-based targets for nature.

The Financial Times has covered the promise and difficulty of soil carbon in corporate supply chains, including a PepsiCo example in India where yields reportedly increased while greenhouse gas emissions fell. The lesson is that carbon, soil, biodiversity, farmer economics, and measurement need to be handled together.

A Practical Screening Checklist

A supply-chain nature-based solution deserves deeper review when you can answer yes to most of these questions:

Does it sit in or near a material supply-chain hotspot?
Does it address a real business risk?
Can you connect it to supplier behavior, land management, or sourcing practices?
Can the outcomes be measured?
Are the claim boundaries clear?
Does it support Scope 3 strategy, SBTi FLAG, CSRD, CSDDD, EUDR, or investor reporting needs?
Are permanence, leakage, land rights, and community issues addressed?

Build the Asset, Then Make the Claim

Finding Nature-Based Solutions in Your Supply Chain is about identifying where your business already depends on living systems, then designing interventions that make those systems more resilient, measurable, and commercially useful.

For companies with material Scope 3 exposure, the right project can support supplier resilience, emissions strategy, regulatory readiness, and credible climate communication. The wrong project can become a glossy story with a weak audit trail.

Carbon Credit Capital helps companies design nature-based carbon and sustainability assets that embed directly into corporate supply chains. Through CCC’s Dual-Value Model, you can assess where sustainability investment may support operational resilience, Scope 3 insetting eligibility, regulatory readiness, and high-quality carbon or sustainability value.

Schedule your consultation with the carbon and sustainability experts at Carbon Credit Capital to explore how nature-based supply chain investments can support your next stage of climate strategy.

Sources

Carbon Footprint

How Climate Change Is Raising the Cost of Living

Published

7 days ago

May 19, 2026

Alice Rush

Americans are paying more for insurance, electricity, taxes, and home repairs every year. What many people may not realize is that climate change is already one of the drivers behind those rising costs.

For many households, climate change is no longer just an environmental issue. It is becoming a cost-of-living issue. While climate impacts like melting glaciers and shrinking polar ice can feel distant from everyday life, the financial effects are already showing up in monthly budgets across the country.

Today, a larger share of household income is consumed by fixed costs such as housing, insurance, utilities, and healthcare. (3) Climate change and climate inaction are adding pressure to many of those expenses through higher disaster recovery costs, rising energy demand, infrastructure repairs, and increased insurance risk.

The goal of this article is to help connect climate change to the everyday financial realities people already experience. Regardless of where someone stands on climate policy, it is important to recognize that climate change is already increasing costs for households, businesses, and taxpayers across the United States.

More conservative estimates indicate that the average household has experienced an increase of about $400 per year from observed climate change, while less conservative estimates suggest an increase of $900.(1) Those in more disaster-prone regions of the country face disproportionate costs, with some households experiencing climate-related costs averaging $1,300 per year.(1) Another study found that climate adaptation costs driven by climate change have already consumed over 3% of personal income in the U.S. since 2015.(9) By the end of the century, housing units could spend an additional $5,600 on adaptation costs.(1)

Whether we realize it or not, Americans are already paying for climate change through higher insurance premiums, energy costs, taxes, and infrastructure repairs. These growing expenses are often referred to as climate adaptation costs.

Without meaningful climate action, these costs are expected to continue rising. Choosing not to invest in climate action is also choosing to spend more on climate adaptation.

Here are a few ways climate change is already increasing the cost of living:

Higher insurance costs from more frequent and severe storms
Higher energy use during longer and hotter summers
Higher electricity rates tied to storm recovery and grid upgrades
Higher government spending and taxpayer-funded disaster recovery costs

The real debate is not whether climate change costs money. Americans are already paying for it. The question is where we want those costs to go. Should we invest more in climate action to help reduce future climate adaptation costs, or continue paying growing recovery and adaptation expenses in everyday life?

How Climate Change Is Increasing Insurance Costs

There is one industry that closely tracks the financial impact of natural disasters: insurance. Insurance companies are focused on assessing risk, estimating damages, and collecting enough revenue to cover losses and remain financially stable.

Comparing the 20-year periods 1980–1999 and 2000–2019, climate-related disasters increased 83% globally from 3,656 events to 6,681 events. The average time between billion-dollar disasters dropped from 82 days during the 1980s to 16 days during the last 10 years, and in 2025 the average time between disasters fell to just 10 days. (6)

According to the reinsurance firm Munich Re, total economic losses from natural disasters in 2024 exceeded $320 billion globally, nearly 40% higher than the decade-long annual average. Average annual inflation-adjusted costs more than quadrupled from $22.6 billion per year in the 1980s to $102 billion per year in the 2010s. Costs increased further to an average of $153.2 billion annually during 2020–2024, representing another 50% increase over the 2010s. (6)

In the United States, billion-dollar weather and climate disasters have also increased significantly. The average number of billion-dollar disasters per year has grown from roughly three annually during the 1980s to 19 annually over the last decade. In 2023 and 2024, the U.S. recorded 28 and 27 billion-dollar disasters respectively, both setting new records. (6)

The growing impact of climate change is one reason insurance costs continue to rise. “There are two things that drive insurance loss costs, which is the frequency of events and how much they cost,” said Robert Passmore, assistant vice president of personal lines at the Property Casualty Insurers Association of America. “So, as these events become more frequent, that’s definitely going to have an impact.” (8)

After adjusting for inflation, insurance costs have steadily increased over time. From 2000 to 2020, insurance costs consistently grew faster than the Consumer Price Index due to rising rebuilding costs and weather-related losses.(3) Between 2020 and 2023 alone, the average home insurance premium increased from $75 to $360 due to climate change impacts, with disaster-prone regions experiencing especially steep increases.(1) Since 2015, homeowners in some regions affected by more extreme weather have seen home insurance costs increased by nearly 57%.(1) Some insurers have also limited or stopped offering coverage in high-risk areas.(7)

For many families, rising insurance costs are no longer occasional financial burdens. They are becoming recurring monthly expenses tied directly to growing climate risk.

How Rising Temperatures Increase Household Energy Costs

A light bulb, a pen, a calculator and some copper euro cent coins lie on top of an electricity bill

The financial impacts of climate change extend beyond insurance. Rising temperatures are also changing how much energy Americans use and how utilities plan for future electricity demand.

Between 1950 and 2010, per capita electricity use increased 10-fold, though usage has flattened or slightly declined since 2012 due to more efficient appliances and LED lighting. (3) A significant share of increased energy demand comes from cooling needs associated with higher temperatures.

Over the last 20 years, the United States has experienced increasing Cooling Degree Days (CDD) and decreasing Heating Degree Days (HDD). Nearly all counties have become warmer over the past three decades, with some areas experiencing several hundred additional cooling degree days, equivalent to roughly one additional degree of warmth on most days. (1) This trend reflects a warming climate where air conditioning demand is increasing while heating demand generally declines. (4)

As temperatures continue rising, households are expected to spend more on cooling than they save on heating. The U.S. Energy Information Administration (EIA) projects that by 2050, national Heating Degree Days will be 11% lower while Cooling Degree Days will be 28% higher than 2021 levels. Cooling demand is projected to rise 2.5 times faster than heating demand declines. (5)

These projections come from energy and infrastructure experts planning for future electricity demand and grid capacity needs. Utilities and grid operators are already preparing for higher peak summer electricity loads caused by rising temperatures. (5)

Longer and hotter summers also affect how homes and buildings are designed. Buildings constructed for past climate conditions may require upgrades such as larger air conditioning systems, stronger insulation, and improved ventilation to remain comfortable and energy efficient in the future. (10)

For many households, this means higher monthly utility bills and potentially higher long-term home improvement costs as temperatures continue to rise.

How Climate Change Affects Electricity Rates

On an inflation-adjusted basis, average U.S. residential electricity rates are slightly lower today than they were 50 years ago. (2) However, climate-related damage to utility infrastructure is creating new upward pressure on electricity costs.

Electric utilities rely heavily on above-ground poles, wires, transformers, and substations that can be damaged by hurricanes, storms, floods, and wildfires. Repairing and upgrading this infrastructure often requires substantial investment.

As a result, utilities are increasing electricity rates in response to wildfire and hurricane events to fund infrastructure repairs and future mitigation efforts. (1) The average cumulative increase in per-household electricity expenditures due to climate-related price changes is approximately $30. (1)

While this increase may appear modest today, utility costs are expected to rise further as climate-related infrastructure damage becomes more frequent and severe.

How Climate Disasters Increase Government Spending and Taxes

Extreme weather events also damage public infrastructure, including roads, schools, bridges, airports, water systems, and emergency services infrastructure. Recovery and rebuilding costs are often funded through taxpayer dollars at the federal, state, and local levels.

The average annual government cost tied to climate-related disaster recovery is estimated at nearly $142 per household. (1) States that frequently experience hurricanes, wildfires, tornadoes, or flooding can face even higher public recovery costs.

These expenses affect taxpayers whether they personally experience a disaster or not. Climate-related recovery spending can increase pressure on public budgets, emergency management systems, and infrastructure funding nationwide.

Reducing Climate Costs Through Climate Action

While this article focuses on the growing financial costs associated with climate change, the issue is not only about money for many people. It is also about recognizing our environmental impact and taking responsibility for reducing it in order to help preserve a healthy planet for future generations.

While individuals alone cannot solve climate change, collective action can help reduce future climate adaptation costs over time.

For those interested in taking action, there are three important steps:

Estimate your carbon footprint to better understand the emissions connected to your lifestyle and activities.
Create a plan to gradually reduce emissions through energy efficiency, cleaner technologies, and more sustainable choices.
Address remaining emissions by supporting verified carbon reduction projects through carbon credits.

Carbon credits are one of the most cost-effective tools available for climate action because they help fund projects that generate verified emission reductions at scale. Supporting global emission reduction efforts can help reduce the long-term impacts and costs associated with climate change.

Visit Terrapass to learn more about carbon footprints, carbon credits, and climate action solutions.

The post How Climate Change Is Raising the Cost of Living appeared first on Terrapass.

Carbon Footprint

Carbon credit project stewardship: what happens after credit issuance

Published

1 week ago

May 18, 2026

Alice Rush

A carbon credit purchase is not a transaction that closes at issuance. The credit may be retired, the certificate filed, and the reporting box ticked. But on the ground, in the forest, in the field, and in the community, the work continues. It endures for years. In many cases, for decades.