By John Siciliano

December 12, 2017 - Credit-rating giant Moody's is not convinced that President Trump's exit from the Paris climate change agreement and his rollback of Obama-era climate regulations will completely insulate coal power plants and coal mines from efforts to cut greenhouse gas emissions.

Moody's released the results of a new climate risk assessment for power plants on Tuesday that shows coal assets are at particular risk of closing, despite changes in U.S. policy under Trump.

"In the U.S., some coal-fired generation may have gained additional time due to the proposed U.S. withdrawal from the Paris Agreement and revision of the Clean Power Plan," a summary of Moody's analysis read. "However, these actions will not materially derail decarbonization trends."

"Despite the shift in U.S. policy at the federal level, projects in the U.S. will face varying degrees of carbon policy risk at the state level," the study said. It explained that renewable energy mandates in the states give older fossil plants less time to transition, whereas, in other countries like China, the timeline for implementing carbon markets gives them more time to phase out coal use.

Many scientists say carbon dioxide emissions from the burning of fossil fuels is resulting in higher global temperatures, spurring more severe weather, drought, and flooding. The Moody's analysis was released on the second-year anniversary of the Paris climate deal that the previous administration signed onto in 2015. French President Emmanuel Macron is hosting the One Planet Summit in Paris on Tuesday to mark the anniversary with an announcement that centered on global financing to country global warming.

Despite the broad findings of the report, Moody's added that "strong political support" for existing coal plants and adjacent industries like coal mining "could give rise to subsidies or other forms of support for coal-fired projects." The subsidies could allow certain power plants to remain competitive economically with renewables and other more advanced or low-emission fossil fuel power plants.

Currently, the Trump administration is supporting a proposed rulemaking at the Federal Energy Regulatory Commission to provide market-based incentives to economically-vulnerable coal and nuclear power plants to help the grid withstand blackouts during severe weather events.

The administration is also supporting a tax reform bill that looks to reduce subsidies for renewables in favor of creating an equal playing field between fuel sources.

"Older, inefficient or higher-cost thermal [coal and oil] plants are at higher risk of substitution from both renewables and by more efficient, less costly and less carbon-intensive thermal generation," according to Moody's. "The risk of demand substitution is highest in the U.S. and [European Union], where trends such as energy efficiency and distributed generation are leading to flat or declining demand for power."

Overall, the transition toward less greenhouse gas-emitting power plants "will have significant credit implications for power generation projects," said Jennifer Chang, assistant vice president at the credit rating agency. "The expenses to convert the broader power sector to a more environmentally-friendly fuel energy mix are large and material."