Wildfires raging across the U.S. and Europe this summer are pushing more and more insurers into slashing their risk by issuing catastrophe bonds to investors, and the so-called CAT bonds on the market are already nearing levels from all of last year.

Data-tracking service Artemis said this week that sales of CAT bonds, which allow investors to share some of the risk with insurance companies by betting against natural disasters, have leaped to almost $5.2 billion this year in the wildfire category. That’s approaching the $5.5 billion in issuance last year and almost double the amount of wildfire CAT bonds the year before.

Wildfires raging across Europe this summer, from France’s Bordeaux wine region to Athens in Greece to the Scottish Highlands, have already caused an estimated 3.1 billion euros ($3.6 billion) in damage, according to the Financial Times. Risk is spreading even faster from drought conditions, which have led to shipping declines on Germany’s Rhine River. In Hungary, authorities took the unprecedented action of detonating rock formations on the Danube to direct water flows to the country’s one nuclear power plant so it could stay in operation.

While the catastrophe bond market is still small, it is booming as disasters add up, and wildfire risk is the fastest growing of all natural disasters, according to Bloomberg. Even America’s exploding prediction markets, such as Kalshi and Polymarket, have seen gains in betting on wildfires to the point where U.S. regulators want to ban the practice for fear it will lead to more cases of arson.

Indeed, this summer of wildfires across the globe will lead to the spawning of several new types of businesses, from software modeling to using satellites to help track and fight fires. CAT bonds are quickly finding their place in the mix.

If you have ideas or suggestions for us, contact me directly at dcallaway@callawayclimateinsights.com.

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Why green investing could be making climate change worse

. . . . It may sound bizarre, but green investing might be making climate change worse, writes Mark Hulbert. A new study that seemingly contradicts every tenet of sustainable investing concludes that even small investments in brown, polluting companies might be more beneficial to the environment than large ones in traditional, highly rated green companies. The reason, according to the authors from Boston College and Yale, is that since green companies already are lowering their emissions, more investment and lower cost of capital have smaller potential for additional progress. That’s compared to brown companies, where even a small reduction in emissions would have an enormous impact. Since most companies have their cost of capital reduced by investment and more money to put into projects, investing in brown companies might actually help more. A stretch? Maybe. But we’ve seen crazier things on Wall Street.

Read the full column

Thursday’s subscriber insights

SpaceX and the year of the AI cash grab

. . . . It’s likely no coincidence that SpaceX’s first earnings report as a public company came just after one of the strongest days of the year on Wall Street. Investor spending on the AI frenzy this year is driving stock markets to new records, and SpaceX and its tech rivals are taking full advantage.

At first glance, SpaceX earnings looked pretty good. Revenue surged 92% to $7.8 billion and net loss of $541 million was only about a quarter of the $2 billion expected. But investors immediately reacted to news that the company reported capital spending on AI at $16 billion in the quarter, more than double just the three months beforehand in the first quarter. Shares fell right away and traded as much as 14% lower on Wall Street on Tuesday.

Master earnings impresario Elon Musk said he expected full-throttle spending on AI for at least the next two quarters, mirroring what he said a few weeks ago when Tesla reported a similar capex blowout. He argued, quite correctly, that all the other tech giants were doing the same thing.

It has become obvious that as Wall Street chases the AI revolution ever higher, in a summer when first SpaceX — and soon Anthropic — go public in huge initial offerings, that tech leaders see this calendar year as the time to step on the spending pedal as hard as possible. When companies can spend this much money and stocks still rise to records, it’s simply a license to keep pushing the envelope.

SpaceX investors who bought the company’s IPO at $135 a few months ago and rode it up to $177 in the first week, are now underwater, and as of today sinking further. But there are several moves left for someone like Musk, including buying Tesla and merging it with his SpaceX operations.

This week’s market run seems to us to have all the trappings of a final melt-up, a last assault on record highs before traders return from summer vacation and begin fretting about the midterms and higher interest rates again. It can always go higher, but even the tech giants can’t spend freely forever.

Editor’s picks: Symptoms of climate change; plus, UN sounds a climate alarm

Watch the video: From extreme heat and wildfire smoke to expanding infectious diseases and rising healthcare costs, the impacts of climate change are showing up in hospitals and communities across the country. In this video from the Carnegie Endowment, Jenny Keroack, a former member of the U.S. Department of Health and Human Services’ Office of Climate Change and Health Equity, explains how climate change is reshaping healthcare, highlights innovative solutions already making hospitals more resilient, and discusses why these efforts can improve health while lowering costs.

Extreme weather disasters a global nightmare: UN

Climate-driven disasters are reaching “nightmare proportions” due to humanity’s “addiction” to fossil fuels, a top UN official warned this past week. “The climate alarm is blaring from every direction,” said UN Climate Change Executive Secretary Simon Stiell in a statement. More than 617,000 acres of land in Europe has burned, with 1,254 fires detected since the start of 2026. Record-breaking wildfires are tearing through France, Spain and other parts of Europe, forcing mass evacuations and hammering regional and national economies, following brutal heatwaves that have dried out landscapes, a report from UN news says. In Japan, records are tumbling as temperatures soar, now reaching the longest over 100°F heat streak ever recorded. Stiell said these “spiraling disasters” are now the lived reality for billions in a world getting rapidly hotter as humanity moves too slowly from fossil fuels to clean energy — and fails to sufficiently protect forests.

Latest findings: New research, studies and projects

Climate change could shrink water flow from the West’s headwaters

The flow of small mountain streams that feed many of the West’s rivers has been steadily declining across headwater watersheds in the western U.S. since 1950 and could decrease by 45% to 65% by the end of this century if current climate trends continue. Phys.org reports on a new study published recently in Earth’s Future that analyzes 75 years of streamflow data from 115 headwater basins across 11 Western states and uses machine learning models to project future conditions under multiple climate scenarios. Researchers found that warming temperatures, shrinking snowpack and increasingly dry conditions are already changing when and how water moves through mountain watersheds, according to the report. The base flow of these mountain streams “helps sustain water supplies, supports fish and wildlife habitat and helps maintain streamflow during dry periods. Reduced groundwater contributions could also increase vulnerability to drought and wildfire across the region,” the report says.

Words to live by . . . .

“Zeus has covered the wide heavens with cloud, and troubled the sea, and the tempest blast of every wind sweeps over me.” — From Homer’s “The Odyssey.”

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(Mark Hulbert, an author and longtime investment columnist, is the founder of the Hulbert Financial Digest; his Hulbert Ratings audits investment newsletter returns.)

CHAPEL HILL, N.C. (Callaway Climate Insights) — Investors interested in mitigating climate change would do well to consider investing in the worst greenhouse gas emitters instead of those ranked best by the ESG rating services.

That’s the astonishing conclusion of a study that this week was accepted for publication in the Journal of Finance, one of the top academic journals. The research is titled “Counterproductive Sustainable Investing: The Impact Elasticity of Brown and Green Firms” and was conducted by Samuel Hartzmark of Boston College and Kelly Shue of Yale.

You might wonder how to square this new study’s findings with those of other studies I’ve reported on recently which found that investing in green firms reduced their cost of capital and thereby enabled them to undertake more green projects. The new study’s authors don’t take issue with those prior studies, but they find that investors potentially could get more bang for their buck by investing in brown companies.

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EDINBURGH (Callaway Climate Insights) — I spent the past week in Scotland on a long-planned golf trip, expecting some cool respite from the extreme heat plaguing Europe and the U.S. this summer. I was surprised to see wildfires raging in the highlands.

While the news shows were full of dramatic fire footage from France and even Suffolk down near London, a month of dry weather had also triggered fires in Cairngorms National Park up by Inverness and even just outside of Edinburgh itself on the craggy volcanic outcrop they call Arthur’s Seat.

Indeed, if there is any sign that wildfires are now a worldwide problem, this is it. But against this emergency backdrop, the UK was instead consumed with the need to drill for more oil in the North Sea.

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. . . . Welcome back to Green Lights. Here’s our roundup of the best of Callaway Climate Insights. This week, David Callaway looks for drones hiding among wind farms, and at Tesla’s ambitions to become an AI and humanoid robot giant. Mark Hulbert looks at research into the surprising success of impact investing.

Of note: We’ll be off next week for a short summer break and back in your inbox on Monday, Aug. 3. Stay cool, have a good week and please subscribe to support our climate finance reporting.

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. . . . First, underwater drones threatening offshore wind farms and now enemy drones hiding in wind turbines? But that’s just what federal officials are claiming in an attempt to block more than 150 onshore wind farm projects across the country. Why? A vague reference to concerns about drones hiding out in the turbines, presumably waiting to attack unsuspecting farmers and turbine technicians, was all that was cited. In freezing these projects, the Trump administration is contributing to the country’s inability to lower electric prices for consumers. Not a good look before the midterm elections.

The sheep are watching

. . . . The debate about the impact of ESG investing has raged since long before the strategy was even known as ESG, writes Mark Hulbert. But a new study aims to settle that debate, finding that as environmental investing began to grow 20 years ago, its impact has gradually grown on the stocks of companies that commit environmental violations. From 2006 to the present, the impact on a company’s stock for environmental infractions has increased, in line with the popularity of the strategy.

Read more here

. . . . If Tesla investors had any remaining doubts about Elon Musk’s ambition to make the company an AI and humanoid robot giant, even at the expense of its core auto business, those were snuffed out by the company’s second-quarter earnings this week. Shares fell on concerns that the company’s spending on AI, robot and robotaxi initiatives soared, and looks set to keep surging, writes David Callaway.

Tesla's AI ambitions

. . . . Now that bankruptcy fears are at least temporarily out of the way for struggling EV maker Lucid Motors , investors are starting to speculate just where the luxury car company might end up, writes David Callaway. Given the Saudis will want to limit their losses, we’d bet on an auction. The process, as bankers and consultants like to call it, seems to be leading to a deal if the stock price trend is any indication. Our guess would be sooner rather than later.

Read more here

. . . . For new UK Prime Minister Andy Burnham, this is as good as it gets. The first few days of any new administration are always filled with excitement and enthusiasm for the new leadership’s plan. But Burnham inherits a Labour Party on the brink of electoral collapse, and he won’t have long before the knives are out. Much will depend on his energy policies — in particular what he plans to do to lower energy prices.

Last chance for cheap energy?

More greenery . . . .

Hot wheels: Climate change has come for the Tour de France (Grist)

Extreme drought hits Europe: Heat is sucking the soil dry (The Guardian)

State of the climate: Rapidly developing El Niño raises chance of record-warm 2026 (Carbon Brief)

Vino veritas: How climate change could redraw California’s wine map (Los Angeles Times)

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Now that bankruptcy fears are at least temporarily out of the way for struggling EV maker Lucid Motors , investors are starting to speculate just where the luxury car company might end up.

Though its days as a public company are probably numbered given that its shares are down more than 90% since it went public in a reverse merger (SPAC) five years ago, its new restructuring advisers presumably have lots of options. Especially since the company is somewhat backstopped by a near 60% stake of the Saudi Public Investment Fund (PIF).

New CEO Silvio Napoli, in quelling bankruptcy rumors last week after a fresh plunge in shares, said the company has enough liquidity (some $700 million in this case) to operate well into next year. There is some runway for an auction, that means, or even time for a turnaround.

Given the Saudis will want to limit their losses, we’d bet on an auction. Shareholders who have pushed the stock up above $7 in the past week (from a low of about $5) likely are thinking similar thoughts. À fresh downgrade today bright it below $7 again

One obvious candidate would be Uber which has an existing deal to buy 35.000 vehicles from Lucid in the next three years for its robotaxi fleet. Uber has already sunk $500 million into Lucid so it’s not a stretch to see them doing more. Other business partners range from Aston Martin, the British sports car company, to Nvidia .

Finally, Lucid would be a small bite for one of the auto giants, such as Ford or GM or even Tesla , but that would require at least a shift in strategic direction for each of them back toward EVs. Crazier things have happened.

The process, as bankers and consultants like to call it, seems to be leading toward a deal if the stock price trend is any indication. Our guess would be sooner rather than later.

Don’t forget to contact me directly if you have suggestions or ideas at dcallaway@callawayclimateinsights.com.

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Markets becoming better ally for climate investors

. . . . The debate about the impact of environmental, social and governance (ESG) investing has raged since long before the strategy was even known as ESG, writes Mark Hulbert. But a new study aims to settle that debate, finding that as environmental investing began to grow 20 years ago, its impact has gradually grown on the stocks of companies that commit environmental violations. The study found that prior to 2006, back when strategy was generally known as socially responsible investing and really a small niche of investing, its impact was limited. But from 2006 to the present, the impact on a company’s stock for environmental infractions has gradually grown, in line with the popularity of the strategy. Read how the study reaches that conclusion, and Hulbert’s analysis.

Read the full column

Thursday’s subscriber insights

Tesla’s AI ambitions only set to grow from here

. . . . If Tesla investors had any remaining doubts about Elon Musk’s ambition to make the company an AI and humanoid robot giant, even at the expense of its core auto business, those were snuffed out by the company’s second quarter earnings this week.

Despite strong revenue that beat expectations as the auto business showed signs of life for the first time in two years, shares fell on concerns that the company’s spending on AI, robot, and robotaxi initiatives soared, and looks set to keep surging.

Musk said capital expenditures would become a priority this year as Tesla tries to compete with the tech giants on AI. Capex spending of $5.8 billion in the second quarter caused Tesla to burn cash flow for the first time in two years, and the company said it expects to spend more than $25 billion when the year is done.

For Tesla investors who have supported the stock, which is down about 17% year to date, the turnaround in the auto business is welcome but likely not enough. Investors have been waiting for news from Musk on whether he would use his newly public SpaceX to buy Tesla, but he wouldn’t comment on the earnings call.

Given Musk’s AI ambitions, it makes sense that at some point there will be a merger of the companies, but these results did little more than to push any potential signal to later in the year. Perhaps Musk is waiting for the market in SpaceX shares to settle down, after they opened higher in their market debut last month but then fell below the offer price last week.

Or perhaps he’s waiting to see how the IPOs or rivals Anthropic and OpenAI shake out in coming months. Either way, these Tesla numbers show that Musk’s AI ambitions are now for him the only game in town.

Editor’s picks: Trouble with a T - for Texas; plus, check your local weather, please

Watch the video: No city in the United States has ever run out of water, but Corpus Christi, Texas, came dangerously close earlier this year, due to severe drought and water-intensive industrial activity. Could the city have been more prepared if it had included appropriate climate forecasting into future water planning? Why hasn’t more been done to provide viable solutions, like a desalination facility? Texas-based Inside Climate News reporters Dylan Baddour and Arcelia Martin join co-host Jake Bolster to discuss why Corpus Christi is on the brink of a water emergency.

Checking the weather

The National Weather Service today highlights the extreme weather events rolling across the U.S. Check your local forecast and adjust your plans accordingly. Flash points include:

• Tropical Storm Bertha may lead to isolated flash flooding, tropical storm conditions and coastal flooding along the Gulf Coast and into southern Texas.

• The risk of flash flooding is expected across portions of the southern mid-Atlantic/Carolinas, Tennessee Valley and the Southeast through Friday.

• Monsoonal thunderstorms continue over the Southwest, Great Basin and parts of the Plains.

• Hazardous heat continues over parts of the Southern Tier; builds over the Great Basin and Northern Plains Friday.

Words to live by . . . .

“Flowers always make people better, happier, and more helpful; they are sunshine, food and medicine to the mind.” — Luther Burbank, botanist.

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Editor’s note: Callaway Climate Insights is taking a summer break next week. We’ll be back in your inbox the first week of August.

(Mark Hulbert, an author and longtime investment columnist, is the founder of the Hulbert Financial Digest; his Hulbert Ratings audits investment newsletter returns.)

CHAPEL HILL, N.C. (Callaway Climate Insights) — New research resolves the contradictory conclusions of prior studies into whether ESG investing has any real-world impact.

Many of those studies have concluded that ESG investing has negligible impact, as I’ve written before. Yet other studies have reached the opposite conclusion. Both can’t be right.

Or can they? The new research traces prior studies’ contradictory conclusions to the time periods that were analyzed. Up until a couple of decades ago, the researchers found, ESG investing had negligible impact. But its impact has grown significantly since then.

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— State coalition sues Dept. of Defense, Hegseth, for blocking wind projects

— New UK Prime Minister Andy Burnham scrutinized over energy policies

— How climate change is suddenly making wildfires much bigger, and more harmful

— Where the buffalo roam: UK’s Cumbria new home to bison herd in wildlife plan

— It’s not just Canada; almost 80 wildfires now raging across U.S.

First underwater drones threatening offshore wind farms and now enemy drones hiding in wind turbines? It’s so far out that I wish I had thought of it for my book last year about a fictional series of drone attacks on the U.S., Unregulated Militia.

But that’s just what the Dept. of Defense, um, er, War, is alleging in its attempts to block more than 150 onshore wind farm projects across the country. This week a coalition of 19 states joined a federal lawsuit by the American Clean Power Association to force the government and Pete Hegseth to take action to start reviewing the projects again.

The suit alleges that the government has frozen all federal reviews of wind farm applications and projects, which in effect blocks them from moving forward. A vague reference to concerns about drones hiding out in the turbines, presumably waiting to attack unsuspecting farmers and turbine technicians, was all that was cited.

We imagine Hegseth has his hands full these days with the Iran war and the Pentagon running short on funds, and all that. And what’s another lawsuit when there are so many on the desk already. But in freezing these projects, the Trump administration is contributing to the country’s inability to lower electric prices for consumers. Not a good look before the midterm elections.

Nobody more than me would like to hear some government official explain how enemy drones could hide in wind farms, or why they would want to. But it seems the drone story is simply a convenient catch-all of a national security warning in this day of drone warfare in Eastern Europe that allows the government to move forward with its plans, whatever they are.

If you have ideas or suggestions for us, contact me directly at dcallaway@callawayclimateinsights.com.

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Tuesday’s subscriber insights

Andy Burnham and Labour’s last chance for cheap energy in UK

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(Michael Molinski is a senior economist at Trendline Economics. He’s worked for Fidelity, Charles Schwab and Wells Fargo, and previously as a foreign correspondent and editor for Bloomberg News and MarketWatch.)

BUENOS AIRES (Callaway Climate Insights) — Argentina came in second place to Spain in the World Cup, but it has a growing economy, leads Latin America in nuclear energy and has an increasing clean energy sector which is benefiting from the conflict in the Middle East.

As President Donald Trump’s policies have cut U.S. tax incentives on clean energy, and the Iran War led to a sharp rise in fossil fuels costs worldwide, Latin America has been free to expand investments in clean energy. Indeed, rising fossil fuel prices have strengthened the economic competitiveness of renewable energy, while renewable power generation costs in Latin America and the Caribbean have fallen sharply over the past decade.

While Argentina may seem to be an unlikely candidate as a nuclear power, the fact is Argentina leads Latin America in nuclear capability, with three commercial nuclear reactors supplying 7% of the country’s electricity needs.

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. . . . Welcome back to Green Lights. Here’s our roundup of the best of Callaway Climate Insights. This week, David Callaway takes the temperature at hotspots around the world: nuclear plants in France, Wall Street, and smoke-choked regions of the northeast. Stay cool, have a good weekend and please subscribe to support our climate finance reporting.

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. . . . In London, a relentless heatwave has melted train lines, closed businesses, and is now starting to affect commercial property prices in the City, for those thousands of properties that don’t have air conditioning, writes David Callaway. In New York, a wave of toxic wildfire smoke descended on the city and the entire Northeast region from Canada and the upper midwest again this week, choking commuters, holiday makers and businesses — and even threatening the final of the World Cup this weekend. It’s a stark example to Wall Street and Washington that climate change has no borders.

Read more here

. . . . The record heat across the U.S. and Europe this summer is causing a surge in power outages as electric grids struggle to keep up with demand for air conditioning while also watching out for high winds that can cause transmission lines to fall and cause wildfires. As this next stage of worsening global warming hits a world still at odds with climate change, the markets are starting to choose winners and losers, writes David Callaway in his Zeus column.

Read the full Zeus column

. . . . Lots of politicians have made hay by criticizing data centers for their environmental impact, but New York Gov. Kathy Hochul took it to a whole new level this week. Hochul signed an executive order establishing a one-year moratorium on permits for construction of new data centers to give lawmakers time to put regulatory safeguards in place. Read more about what this will mean for the midterms.

Read the full insight here

. . . . The scorching summer in the U.S. and Europe and wildfires across both continents are well documented, but global warming flexed its power in a new way this week as France said it shut down a handful of nuclear reactors because of the extreme heat.

Read more here

. . . . One of the hottest speculative plays in the energy innovation space in the past several years — fusion — has taken place entirely in the private markets, until this week. General Fusion (GFUZ), a 24-year-old Canadian company with backing from Jeff Bezos, debuted on the Nasdaq Monday and shares promptly soared.

Read more here

More greenery . . . .

Don’t forget your sunscreen: The health hazards of heat (World Health Organization)

Growing problem: Forecasting climate-driven farm decline by end of century (Euronews)

Accountability: Top Science Panel Backs Research Linking Extreme Weather to Climate Change (The New York Times)

Bad dreams: Climate Change is Costing People Sleep (Climate Central)

Location, location, etc.: For a reliable energy grid, the future is all about location (MIT News)

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Global warming isn’t subtle. It’s sometimes easy to argue about it and the cost/benefits of fighting it vs. keeping the power running, but that’s when it’s not in our faces with storms, heatwaves, wildfires and droughts. This summer is one of those times, and the two largest financial centers in the world are getting a harsh reminder of what might be to come.

In London, a relentless heatwave has melted train lines, closed businesses, and is now starting to affect commercial property prices in the City, for those thousands of properties that don’t have air conditioning, according to Bloomberg.

In New York, a wave of toxic wildfire smoke descended on the city and the entire Northeast region from Canada and the upper midwest again this week, choking commuters, holiday makers and businesses — and even threatening the final of the World Cup this weekend.

It’s a stark example to Wall Street and Washington that climate change has no borders. No nationalist policies and elite housing will save anyone from the impact of a pollution we all contributed to, some much more than others.

In the old days in Chicago, futures traders at the Board of Trade used to look out the windows and if it was raining, they would adjust prices on agricultural commodities. Seems no different now in New York City, or Chicago this week. (Below we look at how markets might be affected).

That smoke might come from Canada but it is everybody’s problem now.

Don’t forget to contact me directly if you have suggestions or ideas at dcallaway@callawayclimateinsights.com.

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Zeus: Global warming’s worst summer yet sends warning in market risk

. . . . The record heat across the U.S. and Europe this summer is causing a surge in power outages as electric grids struggle to keep up with demand for air conditioning while also watching out for high winds that can cause transmission lines to fall and cause wildfires. As this next stage of worsening global warming hits a world still at odds with climate change, the markets are starting to choose winners and losers, writes David Callaway in his Zeus column. Among the sectors most affected will be utilities and electric companies, but also financial firms that back them, according to S&P Global. Those least affected might be healthcare companies and real estate, though they won’t escape completely as extreme heat begins to affect people’s health as well as where they live.

Read the full Zeus column

Thursday’s subscriber insights

Data center politics gets serious

. . . . Lots of politicians have made hay by criticizing data centers for their environmental impact, but New York Gov. Kathy Hochul took it to a whole new level this week.

Hochul signed an executive order establishing a one-year moratorium on permits for construction of new data centers to give lawmakers time to put regulatory safeguards in place. We wrote a few months ago how Maine had passed legislation to do this but that bill was ultimately vetoed by the state’s governor.

New York is not a huge data center state, such as Virginia or Texas. But it has outsized influence in political circles, especially among blue states in an election year. Hochul’s move to use an executive order prevented the costly and time-consuming practice of trying to create legislation. After all, President Donald Trump doesn’t use executive orders for nothing. But it also brings the controversy over data centers, and in particular their water usage to cool their servers, into a bigger spotlight as the midterms in November approach.

While the moratorium will likely cost New York some business from the big tech giants, there are plenty of other areas for them to search. More importantly, it returns Hochul to the front line of climate-fighting politicians, after she delayed imposition of several net zero targets a few months ago because of the rising cost of energy now. Combined with her advancing of the first U.S. traffic congestion charge last year, she’s now a climate A-lister again.

The question will now be asked by other governors and legislators about whether it’s better to delay new data centers at least until after November, so they don’t get hurt by them at the polls. It’s a flashpoint between the benefits of new AI technology and the dangers of more pollution, coming in what is sure to be a record hot summer that is not going to go away.

Editor’s picks: New data, new debates; plus, Walmart, the energy company

Watch the video: The field of climate change is constantly changing, and every shift brings new levels of scientific disinformation. For example, recent analysis has emerged on RCP8.5, a scenario whose worst-case has been scaled back as the costs of renewable energy have fallen. While one particularly extreme model for warming has become more optimistic, the overall outlook remains worrisome. The response to this news, unsurprisingly, has reignited attacks on climate research. The Bulletin of the Atomic Scientists recently hosted a discussion with the authors of a new article explaining these developments, the political debate around it and how to understand the current outlook using the most recent data.

Walmart builds out fast-charging EV network

Walmart is expanding its in-house EV charging network as part of a long-term strategy to run its own proprietary fast-charging network across thousands of Walmart and Sam’s Club locations by 2030. OPIS reports the retailer now has about 560 energized DC fast-charging ports operating across 70 locations in 15 states. The retailer activated 25 sites in May and six so far in June, according to an online tracker. Around 150 additional locations are under construction, and permits have been filed for nearly 200 more. Stations are expected to open soon in 29 states, OPIS reported, citing Walmart’s director of energy policy Matthew Nelson.

Words to live by . . . .

“We’d find more energy in the attics of American homes (through energy conservation measures) than in all the oil buried in Alaska.” — Amory Lovins, author and former chief scientist of the Rocky Mountain Institute.

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It’s 81 degrees and sunny outside my office window in Northern California today, a perfect summer afternoon. And my local electric company, PG&E , is shutting off all power to our suburban San Francisco town in a few hours.

Wildfires are the threat. The sunny and dry conditions with a slight breeze that we all love about summer now spell dangerous fire conditions for towns in the new era of global warming. After losing millions in liabilities for causing wildfires over the past decade because of high winds bringing down power lines, PG&E decided a few years ago it’s just easier to turn off all the power and inconvenience thousands rather than start fires and pay millions.

Across the U.S. every single state this week has some form of power outage going on, according to USoutage.com, with California, Texas and Tennessee running highest. A searing heatwave threatens fires but also grid reliability as air conditioners roar across the country.

The thing is, we will soon look back on this summer of outages as the good old days because it is only going to get worse from here.

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— France shuts down nuclear reactors as extreme heat threatens water program

— First fusion company to trade on Nasdaq soars in debut

— How the healthcare system is adapting to an increasingly warming world

— Wimbledon’s legendary green grass has an extreme heat problem

— Every day is a winter day in this Utah mountain spot, even in a national heatwave

The scorching summer in the U.S. and Europe and wildfires across both continents are well documented, but global warming flexed its power in a new way this week as France said it shut down a handful of nuclear reactors because of the extreme heat.

Authorities said three reactors had been shut down and seven more may suspend or reduce operations because of environmental restrictions around water discharges into nearby rivers. Because the water temperature of the rivers is already at extreme levels, it is unsafe to dump thousands of gallons of super-heated water used to cool the reactors into them.

The news is another unwelcome sign that climate change is impacting not only how we live, but how we plan to adapt to global warming itself. The hotter it gets, the more people use air conditioners, which increases the power loads on grids, and results in companies generating even more greenhouse gas emissions to keep the power running and keep people cool.

France said the reduction in nuclear energy was less than 10% of the output of its nuclear operations and could be made up, and that there is no safety risk from radiation. But the water warning is now there. Rest assured water advocates worried about data center usage of water to cool servers will be looking hard at this, particularly in the U.S. as the data center controversy heads for the midterm elections.

Nuclear energy is billed as a clean, unending means of creating energy to serve the world’s growing power needs. Many governments, including the Trump administration, are pushing hard to develop more ways to build nuclear capacity. But just when we think we have it all figured out, climate change strikes again in ways we couldn’t have imagined.

If you have ideas or suggestions for us, contact me directly at dcallaway@callawayclimateinsights.com.

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Tuesday’s subscriber insights

Shine like the sun: the debut of fusion stocks

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The City of London, historic investors in everything from U.S. railroads and the reconstruction of Europe after Napolean to the creation of maritime insurance for the global shipping sector, is now taking aim at climate change catastrophe bonds.

Convinced that global warming will lead to new financial markets investing in risk of extreme heat and violent storms, Europe’s financial center sees the nascent market for insurance-linked securities and catastrophe bonds as a natural new frontier.

At roughly $140 billion and almost entirely based in Bermuda, according to Bloomberg, the market to layoff climate risk by insurance companies has exploded in recent years as temperatures soared and rainstorms and hurricanes have become more damaging. Reinsurance giant Flood Re recently issued a cat bond valued at $187 million, the news service reported.

The CAT market has been largely dominated by a few U.S. hedge funds in recent years, but the insurance industry is global. And largely based in London. So it makes sense the Bank of England and the UK’s Labour Party government would want to find ways to ease regulations to make it easier to compete with Bermuda as the market grows.

Given the strength of Lloyds of London it’s a fair bet that the City will make some inroads into the young business. As extreme heat devastates Europe again this summer, investors will be attracted to any sort of way to make money by speculating on the damage global warming will create.

With the booming business in prediction markets such as Kalshi growing by the day, we can expect CAT bonds will continue to grow and that they will soon attract more regulatory attention. That puts the City in a unique, and historically comfortable place to compete for the new business.

Don’t forget to contact me directly if you have suggestions or ideas at dcallaway@callawayclimateinsights.com.

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Green stocks outperform fossil fuels in first half

. . . . Green energy stocks outperformed oil and gas stocks in the first half of the year, continuing a trend for investors in renewable energy, writes Mark Hulbert. But the war in Iran and the surge in oil prices has narrowed the premium in the last three months. Still, Hulbert notes that green stocks have seen a dramatic increase in value in the last few years and explains why he thinks that will continue.

Read the full column

Thursday’s subscriber insights

Rivian’s stock offering crossroads

. . . . Rivian’s announcement of a $1.5 billion stock offering this week upended a string of recent good news from the electric vehicle maker, but investors should take pause before hitting the sell button.

News the company would offer 75 million new shares to the public to raise money caused the stock to sell off this week, wiping out gains for the year.

But the company also pre-announced second quarter revenue ahead of expectations, largely on rising vehicle sales, and available cash that is climbing.

Companies typically raise money in stock offerings when they need money to grow, but sometimes — after the companies have gone public — investors interpret that as a sign of weakness. It can dilute the shares after all.

But in this case the sudden drop in shares appears more of an opportunity to enter a market for shares of an innovative company that appears to be growing in all of its important metrics in a very tough industry.

Rivian shares have held steady since the plunge on Tuesday and even rose this morning after the new shares were priced as investors await more information from the company when it officially reports earnings in a few weeks. At that time we should see exactly where it stands.

Editor’s picks: Bill Nye on the scorching heat waves; plus, melting sea ice imperils ocean nutrients

Watch the video: More than 160 million people have been under extreme warnings as a dangerous a heat wave scorches much of the East Coast and Midwest. Bill Nye “The Science Guy” joins Antonia Hylton to break down how climate change is supercharging extreme heat, whether this is the new normal and if our powergrid can handle it amid the A.I. boom.

Arctic Ocean may have passed a critical tipping point

A study published recently in the journal Communications Earth & Environment found that melting ice in the Arctic Ocean has drastically reduced levels of nitrate, a key nutrient in the ocean. Smithsonian Magazine reports that the change, which the research team suspects is irreversible, might mean that in the future, the Arctic Ocean will only be able to support phytoplankton — plant-like microorganisms — that are smaller and less nutritious than their larger counterparts that play a big role in the foundations of marine food webs. Earth’s climate could also be affected, researchers said. Phytoplankton need nitrates for photosynthesis, in which they remove heat-trapping carbon dioxide from the atmosphere, so the shift might reduce the ocean’s ability to store carbon. That would be a big loss, the report notes. The ocean has absorbed about 30% of human-emitted carbon dioxide between 1994 and 2004.

Words to live by . . . .

“There is nothing I like better at the end of a hot summer's day than taking a short walk around the garden. You can smell the heat coming up from the earth to meet the cooler night air.“ — Peter Mayle, British author.

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(Mark Hulbert, an author and longtime investment columnist, is the founder of the Hulbert Financial Digest; his Hulbert Ratings audits investment newsletter returns.)

CHAPEL HILL, N.C. (Callaway Climate Insights) — As expected, green stocks outperformed brown stocks for the first half of this year. One consequence of the Iran war, however, is that the magnitude of green stocks’ outperformance was smaller than it was in 2025.

From January through June, green stocks (as represented by the S&P Global Clean Energy Transition Index) gained 25.6% — versus 17.8% for brown stocks (as represented by the S&P Global Oil Index). Green stocks’ alpha (their outperformance) was therefore 7.8 percentage points — far smaller than their 32.5 percentage point alpha for all of 2025.

Green stocks’ outperformance was “expected” because President Donald Trump’s election rendered them so out of favor that they have to provide higher expected returns in order to entice investors to take the considerable risk of owning them. In order to provide that higher expected return, green stocks first had to fall significantly — until their prices were low enough to provide the prospect of outperforming. Fall they did both immediately before and after the November 2024 election, and their outperformance over the past 18 months is their reward for that initial suffering.

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Tesla shares have been on a roll lately and after a surprise beat in second-quarter sales late last week, investors have a new reason to believe in Elon Musk’s original dreammaker. But it’s not just the potential that the Musk political cloud has moved on from Tesla’s brand name. It’s the potential for his latest gambit — the newly debuted AI and satellite company SpaceX .

Tesla stock leaped ahead of its sales report last week and on Friday investors found out why. The company reported a 25% gain in sales for the second quarter, with good gains in both Europe and China as its slimmed-down vehicle offerings attracted new buyers. Sales of 480,000 vehicles exceeded analyst estimates of 400,000, though they were still short of China rival BYD’s sales for the quarter.

Still, Tesla shares are up 18% in the past three months, a welcome rally after a tough year in 2025 due in part to Musk’s political explorations. The sales showed the company is still chugging along despite a slowdown in total electric vehicle sales worldwide.

Tesla also continues to plug along with plans for its fleet of robotaxis. The company announced this morning that it had begun testing vehicles in Miami, its fifth U.S. city. Most investors believe Tesla is behind in its robotaxi plan but with every expansion the speculation that Tesla could be a viable competitor to Google’s Waymo picks up again.

Tesla is also quietly building its energy storage business into a beast, especially its Megapack business for industrial storage systems for utility grids and for large cities and towns. The results from the energy business have been spotty because of the seasonal impacts of the grid business but Tesla continues to announce large energy storage deals, including one in India recently.

But it’s really SpaceX that is driving the renewed investor interest. Musk has hinted strongly that SpaceX might buy Tesla at some point, to combine its electrification and power capabilities with SpaceX’s AI offerings and Starlink satellite business to develop data stations in space.

With such a promise hanging over the stock, it’s hard for Tesla loyalists to not own shares, sales gains or not. At some point, the premium offer will come. Until then, any potential gains in Tesla vehicle sales or energy storage deals are simply gravy.

If you have ideas or suggestions for us, contact me directly at dcallaway@callawayclimateinsights.com.

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Fifty years ago, on our nation’s 200th birthday in 1976, I celebrated with my family as a 12-year-old on a restaurant cruise around New York City harbor, watching the fireworks display as we glided past the World Trade Center towers.

Climate change was far from my mind back then, but environmental ambitions in the U.S. were already taking shape. The country had just suffered through a painful oil shock three years earlier because of war in the Middle East. Former President Richard Nixon had created the Environmental Protection Agency in 1970, which was the occasion of the very first Earth Day. The Endangered Species Act was only a few years old and a court ruled the EPA had authority to regulate leaded gasoline that year. The Dow Jones Industrial Average closed for that holiday just below 1,000.

While we’ve done more damage to our environment in the past 50 years than in the entirety of human history, there is plenty of reason to be hopeful that 50 years from now we will celebrate America’s 300th birthday in a cleaner, less polluted environment.

Think of how far we’ve come. In 1976, there was no Internet. Hardly any computers; at least not like the ones we know today. The iPhone and social media and video revolution were still decades away. CNN and 24-hour news wouldn’t start for another four years. The World Trade Center towers would preside over New York for another 25 years before that fateful day in September 2001.

This year I’ll celebrate the 250th at a parade in my hometown outside San Francisco, followed by fireworks over the Golden Gate Bridge. I’m comforted by the fact that our uniquely American innovation will keep finding ways to test the boundaries of our imaginations and create opportunities for clean energy, investment and above all, new ways to change how we live for the better.

There will always be challenges, but each era shows how we find new ways to confront them and move forward. The AI revolution is coming, and with it entirely new achievements in how we approach disease, agriculture, and our endangered global climate.

The Dow Jones average is trading just below a record high near 53,000 as I write this. Most Americans have already taken off for the long weekend. Despite all our differences, it’s time to celebrate. Here’s to the next 50 years.

Happy Fourth of July.

Don’t forget to contact me directly if you have suggestions or ideas at dcallaway@callawayclimateinsights.com.

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Zeus: Power company mergers are getting bigger

. . . . Power company deals are surging, and they’re becoming bigger, writes David Callaway. As the AI frenzy on Wall Street matures, the energy companies that are powering the data centers have become attractive targets to private equity investors and other power companies, especially for their predictable and scalable businesses. Deal value in the first five months of the year is up almost 50%, with NextEra Energy’s enterprise offer to buy Dominion Energy for $112 billion the largest to date. But Callaway points out the actual number of deals is flat to lower, meaning that they are growing bigger, and investors and acquirers are taking more risk. The increase portends a big summer and likely rest of the year for Wall Street on merger deals, before someone tries to stretch just a bit too far.

Read the full Zeus column

Thursday’s subscriber insights

A real look at data center pollution

. . . . Anyone confused by the litany of conflicting reports on how much pollution data centers are responsible for should take a good read of Google’s annual sustainability report this week.

Google is one of the tech giants that tries the hardest to develop or buy clean energy to keep its emissions down as it develops its technology. But the numbers show that it’s losing the war so far, with its third-party, supply chain emissions leaping as well as its water and electricity usage.

Google said that it actually managed to lower both its direct and indirect emissions in 2025, through its aggressive use of clean energy to power its data centers. The tech giant is among one of the most prolific dealmakers for solar, wind and even nuclear energy, and it was reflected by the fact that electricity emissions fell 3% last year.

But electricity usage was up more than 37%, and water usage was up more than 34%, while total greenhouse gas emissions were up 18%. Most of the surge came from Google’s third-party suppliers, called Scope 3 emissions. Amazon released similar bad numbers in its own sustainability report.

The sustainability reports show the value of actual information to investors directly from the companies they own and illustrate why it’s so important that all public companies detail their climate risk and emissions status each year. Google’s numbers are depressing but it gets points for trying to contain them with clean energy while still keeping pace with its rivals in the great AI arms race.

Editor’s picks: Happy 194th, Jonathan

The oldest chelonian

Jonathan, a Seychelles giant tortoise, has been recognized by Guinness World Records as the world's oldest living land animal and the oldest chelonian (turtle or tortoise) ever recorded. He’s estimated to be 194 years old, possibly older. Says Guinness World Records: “Jonathan The Tortoise: With almost 200 candles on his (vegan) birthday cake, this legend is older than the Eiffel Tower.” He lives on St. Helena, a remote island in the South Atlantic, also known for being the location of Napoleon Bonaparte’s final exile. He was brought to Saint Helena from the Seychelles in 1882 as a gift and at that time was determined to be fully grown, so, at least 50 years old. A vicious, click-bait internet rumor spread in April of this year that Jonathan had died. Not only is Jonathan alive and well, he has been named a Guinness World Records Icon. Jonathan “has met royalty, starred in wedding photographs and delighted tourists,” Saint Helena Gov. Nigel Phillips said in a news release. “He is a symbol of the enduring resilience of this island and its commitment to protecting the environment. It is entirely appropriate that he has as his home the paddock of the Governor’s Residence. He is very much the brightest icon of this jewel in the South Atlantic.” If not the fastest.

Latest findings: New research, studies and projects

Ozone depletion: It wasn’t just your hairspray

If you or someone you know had big hair in the ‘80s, thanks to a generous helping of aerosol hairspray — don’t blame them for the hole in the ozone layer. The Antarctic ozone hole was discovered in 1985, and scientists determined chlorofluorocarbons (CFCs) — then widely used as refrigerants, propellants, foam-blowing agents and solvents — were the cause of the ozone depletion. We’ve phased out CFCs and the ozone layer in the Antarctic is recovering. But a new study in the Proceedings of the National Academy of Sciences shows the first signs of ozone depletion appeared in the ‘50s, about 30 years before the ozone hole was discovered. And, this first signal of ozone loss popped up not in the Antarctic, but in the upper stratosphere of the tropics, MIT News reports. What’s more, the cause of this early depletion was not due to CFCs, but to another industrial chemical: carbon tetrachloride. That chemical was used as a dry cleaning and degreasing agent as early as the 1930s. Carbon tetrachloride has been phased out of use in most of the world, due to health concerns. But, the report notes, it’s critical to monitor the lingering effects of both CFCs and carbon tetrachloride. Since the Montreal Protocol began to tightly limit carbon tetrachloride use in the 1990s, the molecule’s concentrations in the atmosphere have been on a decline. Susan Solomon, the atmospheric chemist who led the MIT research team, said, “We’ve gone through a big effort to get rid of these chemicals. Don’t we have an obligation to keep monitoring to make sure the atmosphere responds the way we think it should?” The research was supported by the National Science Foundation, the National Oceanic and Atmospheric Administration and the European Commission.

Words to live by . . . .

“National parks and reserves are an integral aspect of intelligent use of natural resources. It is the course of wisdom to set aside an ample portion of our natural resources as national parks and reserves, thus ensuring that future generations may know the majesty of the earth as we know it today.” — John F. Kennedy, speaking at the World Conference on National Parks, June 23, 1962.

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SAN FRANCISCO (Callaway Climate Insights) — The mad rush by data centers to buy power for their AI ambitions is causing a boom in merger activity this year on Wall Street — and the deals are getting bigger.

Led by the massive $112 billion combination bringing NextEra Energy and Dominion Energy together this spring, the value of mergers in the power sector through May this year surged to $204 billion from $142 billion in the first five months last year, according to the Financial Times, citing a study by Deloitte.

But the number of deals is about similar, with 77 power deals through May — about half of the 157 all of last year. The London Stock Exchange Group merger data center reports that total deals are actually down this year, but of the $2.8 trillion in total value so far, almost half are valued at $10 billion or more.

What to make of this?

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— As Brits and Europeans see summer heat as the new normal, AC stocks leap

— California delays climate reporting rollout until after the midterms

— NASA climate specialist on just how hot it might get in coming years

— Former NOAA staff revive climate site shut by Trump

— The U.S. has seen more than 35,000 wildfires this year, and summer is just beginning

Here are the daytime high temperatures forecast across the U.S. for Friday, July 3. Washington, D.C. could see a daytime high of 105°F. The record high in the nation’s capitol for July 4th is 100°F, set back in 1919.

As extreme heat threatens the Eastern half of the U.S. this week and Europe fights historic global warming, investors are naturally turning to cooling stocks.

Some of the biggest air conditioning companies and industrial coolers have seen their stocks surge this spring as demand is expected to soar in coming days, testing systems and regional electric grid capacity.

Shares of Comfort Systems , which services industrial HVAC systems, have more than doubled this year and are up 4% more in the past few weeks. Shares of rival Trane Technologies are up 23% while global HVAC giant Carrier Global stock is up 38% this year and 15% in recent weeks. Other companies seeing gains include Watsco and AAON .

The extreme heat has crippled Europe and left scientists scrambling to determine just how much worse it could get later this summer and in the next few years (see NASA scientist’s analysis below). News reports say aircon sales in the UK, where only 7% of citizens have AC, have leaped in recent weeks as it finally becomes apparent that these temperatures are the new summer norm. In the U.S., Europeans visiting for the World Cup are basking in the AC in all the stores and restaurants and hopefully will bring back determination to add it in their homelands. For the cooling companies, the gains are welcome but come with challenges on how to keep growing in an increasingly competitive environment.

If you have ideas or suggestions for us, contact me directly at dcallaway@callawayclimateinsights.com.

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Tuesday’s subscriber insights

California delays climate reporting rollout until after the midterms

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(Michael Molinski is a senior economist at Trendline Economics. He’s worked for Fidelity, Charles Schwab and Wells Fargo, and previously as a foreign correspondent and editor for Bloomberg News and MarketWatch.)

CARACAS, Venezuela (Callaway Climate Insights) — As Venezuela digs through the rubble from two back-to-back earthquakes that killed at least 1,500 people, new reports by meteorologists and environmental scientists paint a bleak picture for Latin America and the Caribbean, saying record-breaking temperatures, deadly floods, droughts and intensifying hurricanes are ahead.

Sea levels along Atlantic-facing coasts are rising faster than the global average and continuing ocean acidification and warming are compounding risks to marine ecosystems and fisheries, according to a report by the World Meteorological Organization.

“The signs of a changing climate are unmistakable across Latin America and the Caribbean, from accelerating glacier loss and rising sea levels to rapidly intensifying tropical cyclones, extreme heat, floods and drought,” said WMO Secretary-General Celeste Saulo.

Last year, Hurricane Melissa swept through Jamaica in October 2025 as the first Category 5 hurricane on record to make landfall in Jamaica. It led to 45 deaths and economic losses of approximately $8.8 billion.

NOAA forecasts ‘super El Niño’

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. . . . Welcome back to Green Lights. Here’s our roundup of the best of Callaway Climate Insights. This week, David Callaway explains why gasoline prices won’t come down anytime soon. Plus, Mark Hulbert says President Donald Trump is leading a global clean energy revolution despite himself. Have a good weekend and please subscribe to support our climate finance reporting.

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. . . . President Donald Trump’s call this week for a Department of Justice probe into oil-price gouging at the pump follows a well-worn political path of the president blaming oil companies for higher gas prices when oil prices suddenly fall. It might actually work this time, writes David Callaway, since Trump often determines in advance what his DOJ might find. But as anyone in the business will tell you, oil companies pay higher prices during the spike but typically buy a lot in case prices go even higher. So when prices suddenly fall they still have to sell all their high-priced inventory.

But what does it mean for the midterms?

. . . . No wonder tech companies are suddenly up in arms defending energy and water usage for their data centers. Public controversy has swirled for months about overuse of water to cool the processors and energy that might drive up prices for consumers. But this week, Virginia — which houses the most data centers in the nation — imposed a monetary penalty. The fact that state governments have moved from ineffective moratoriums on building data centers to actual taxes is significant. A tax of $600 million split by dozens of tech companies may seem small but imagine if all Democratic states followed suit. Pretty soon it becomes real money, as they say.

The anger is real

. . . . The Iran war is forcing a global adoption of renewable power to offset oil prices. While it may be going a bit too far to say President Donald Trump has been a blessing to the renewable energy industry, Mark Hulbert writes, it’s recently become clear that the industry has benefitted in several significant ways from his policies. Another unexpected effect of the U.S. president’s antipathy toward renewable energy is showing the world that, even without government subsidies, it can not only survive but even thrive.

Read the full column

. . . . Even the Saudis have limits on how much money they’re willing to lose. And now, Lucid Motors is finding that out. Lucid has enjoyed protection from the turmoil faced by other EV makers because it was more than half owned by the Saudi Public Investment Fund. But Lucid stock has dropped 92% over the past three years and more than 50% this year alone. What’s next? Maybe the new CEO. Silvio Napoli fired the interim CEO, eliminated the COO position, and this week laid off 18% of the workforce, or close to 1,200 people. What’s next?

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. . . . A 17-year investment project in wind power by Pattern Energy came to fruition this spring with the opening of the largest U.S. wind power operation, and it is already sending electricity to California, signaling a new era in power generation and transmission in the American West. David Callaway writes that it’s one of the first major renewable infrastructure projects to begin operating and will allow electric grid operators to really begin experimenting with power coming in at all times, between wind at night and solar during the day.

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More greenery . . . .

• Europe’s deadly heat wave: Blame it on climate change? Yes, researchers say. (New York Times)

• But not ice cream: Paris officials ban most alcohol sales during extreme hot weather (CBS News)

• Under your skin: How a warming world puts pressure on every system in your body (Grist)

• Striking out: Lightning-related wildfires surge in Washington state (The Daily Dispatch)

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