On Wednesday, major ratings firm Moody’s Investors Service downgraded its assessment of the North American coal sector to a “negative” outlook.

This has been rightly cited as a positive sign for the climate, in that it’s an indication of coal’s decline. But it also highlights the ways in which this type of market trend will not be enough to address climate change on its own. The National Climate bank can play a key role in facilitating the transition away from coal.

Seeking Alpha reports:

“Moody’s says the U.S. coal sector could suffer a substantial volume reduction for the next decade, as a combination of economic, environmental and social factors continue to push utilities towards renewable energy.”

Moody’s is in the business of assessing credit risk, which is important to capital markets. The downgrading of the coal sector means that Moody’s sees coal as a riskier investment, due to factors affecting its future profitability and viability. Many smaller, older, and more expensive coal facilities are closing.

However, many aging and unprofitable coal facilities are effectively subsidized to remain open, due to regulatory frameworks and concerns about grid reliability, jobs, or stranded asset costs. For example, in January Vox reported on studies showing the unprofitability of Colorado’s coal plants, but also noted:

“[C]losing down coal plants before the end of their rated lifespan and simply eating the remaining debt is something utilities can only do if permitted by Colorado legislators and regulators.”

The high-stakes math of the carbon budget means that waiting for these plants to close on their own will have serious climate consequences.

A National Climate Bank could accelerate the pace of the trend that Moody’s is already demonstrating. By helping to securitize the costs of retiring stranded coal assets, or in some cases purchasing coal reserves or facilities, a Climate Bank could remove barriers to coal retirements. The Climate Bank could also help to address reliability and job-related concerns by investing in grid infrastructure including transmission, storage, and new clean generation.

Moody’s can tell that coal is on the way out, but it’s not the business of Moody’s or the markets more generally to make that happen faster: they’re only reporting the trend they see. The Climate Bank could take an active role and help bring about the changes that are necessary.