Fossil fuel divestment is a campaign that's snowballing—if you'll excuse a mixed metaphor. In just the last month San Luis Obispo, California, and Corvallis, Oregon, have voted to divest. The University of Hawaii and the Rhode Island School of Design have done the same. And the University of Washington decided to divest from coal, as did the $900-billion Government Pension Fund of Norway.
Coal, in fact, is the easy one. No fossil fuel is more harmful to health, more destructive of the environment, or more of an accelerant to global warming. So it's great news that many institutions not yet ready to make the leap to total carbon divestment are purging their portfolios of coal companies.
Last week the California Legislature took a giant step in that direction. Senate Bill 185, which has cleared the state Senate, was overwhelmingly approved by the Assembly Retirement Committee. If enacted, the bill would require the two largest state pension funds in the US to divest from coal.
Coal is a bad investment
There is one additional fact about coal that sometimes gets lost in the flurry of describing its murderous impact: coal is a bad investment. And it's been moving in a negative direction for some time.
On June 24, the California Assembly Committee on Public Employees, Retirement, and Social Security approved SB 185, Senate President pro Tempore Kevin de León's coal divestment bill, by a vote of 5 to 1. The bill now goes to the Appropriations Committee and then to the floor of the Assembly.
Here is a video of the hearing. It includes testimony from Senator de León, NextGen Climate COO Daniel Lashof, and investment managers from Trillium and Green Century. Thirteen more speakers announced their support, including Fossil Free California coalition members RL Miller of the California Democratic Party, Linda Rudolph of the Public Health Institute, Rick Guerrero of SEIU Local 1000, Chris Brown of 350 Sacramento, and Carla West of 350 Bay Area.
Be sure to sign our petition addressed to Assembly Members.
Today the California coal divestment bill, SB 185, cleared another hurdle. The Assembly Committee on Public Employees, Retirement, and Social Security voted to send the bill to the Assembly Appropriations Committee by a vote of 5 to 1.
With this success, much remains to be done. You can help by signing this petition and contacting your Assembly Member. Legislators respond to their constituents, so be sure to let your voice be heard about this important legislation.
“I’m delighted to see SB 185 advance in the Assembly. California once again leads the nation in saying ‘no’ to fossil fuels and ‘yes’ to investment in clean energy jobs,” said RL Miller, chair of the California Democratic Party’s environmental caucus.
Carla West of 350 Bay Area also spoke. Carla, a California divestment organizer currently working with 350.org, said: “These pension funds are intended to secure a stable future, but that is impossible if we keep investing in fossil fuels. We are glad to see this bill to divest from coal pass through the first committee."
Several other Fossil Free California and 350 Bay Area members were at the meeting to demonstrate their support for the bill. Investment manager Jodi Neuman of Trillium Asset Management also gave the committee some hard data: fossil free investing has outperformed the S&P 500. Therefore, it would be financially responsible for them to support SB 185.
If passed by the Assembly and signed by the Governor, the bill will ban investments in thermal coal companies by the California Public Employees' Retirement System (CalPERS) and the California State Teachers' Retirement System (CalSTRS). It will be the first action by a state legislature in the US to mandate any kind of fossil fuel divestment.
You can learn more here about the devastating effects of coal pollution. It's bad for the environment, for public health, and for the financial stability of California's pension funds. To say nothing of its outsize contribution to global warming.
To keep the inevitable temperature rise at less than 2 degrees Celsius, we must stop burning coal. And we must stop investing in the companies that traffic in this dangerous carbon-based drug.
Please sign the petition now!
Cross-posted at Fossil Free California.
On June 12, the Fossil Free California rally at CalSTRS headquarters drew 50 protesters, an extraordinary number for an 8:15 am gathering on a weekday in West Sacramento. Thanks to the organizational efforts of Jane Vosburg, FFCA CalSTRS coordinator, people came from all over Northern California, including several 350 Bay Area members. Among them were many active and retired teachers who wanted to let the California State Teachers' Retirement System know that their pension money should exclude all fossil fuel companies. Here is a slideshow of the rally.
Following the rally, many of the protestors attended a meeting of the CalSTRS Investment Committee. Tom Steyer, founder of NextGen Climate, presented a compelling case for divestment to the committee. (Video here.) He pointed out that over the last 35 years, a fossil-free index investment would have outperformed an index that included oil, gas, and coal. Coal, in particular, is a bad investment now, and he would recommend immediate divestment.
As for oil, Steyer said that exploration and extraction costs continue to mount, while costs for renewables are on a rapid downward trajectory. Every doubling of the solar installed base, for example, results in a 24 percent reduction in costs. In that competitive environment, he does not see that high oil prices are sustainable; as a result, over time oil companies are likely to lose significant value due to stranded assets. This is a generational issue, he said, and the pressure on fossil fuels will continue to increase as younger people engage. "The only way it will stop is if all the scientists are wrong."
The committee members were receptive, clearly considering how to find a practicable path toward divestment that would not compromise their concern for fiduciary responsibility. Several of our members—including retired teachers and CalSTRS members Jane and Bill Vosburg, Deborah Silvey, and Joyce Banzhaf—spoke about the dangers of climate catastrophe, the futility of shareholder engagement, and the financial risks of continuing to hold fossil fuel investments. (Video here—the photo shows Jane Vosburg and Tom Steyer.)
Teachers Carmen Osorio of Santa Rosa and Heather MacLeod of Oakland described their students' responses to learning about climate change. Osorio pointed out that global warming affects Latinos and other people of color disproportionately, and she says it is difficult to instill hope in her students without action from their elders. MacLeod told a story of an eighth-grade student of hers, never previously interested in math or science, who was so astonished by the 600,000-year "hockey-stick" temperature graph that she became passionately interested in climate change—and in graphs. MacLeod said that, as teachers, we must be able to tell our students we're doing something.
As all the speakers said, there is something that CalSTRS can do, for the teachers and for the students: begin the process of divestment now.
Rally photos are available on Flickr (Creative Commons).
This week the California State Senate made history, passing SB 185 by a large margin, 22–14. The bill calls for the nation’s two largest state pension funds, the California Public Employees’ Retirement System (CalPERS) and the California State Teachers’ Retirement System (CalSTRS), to divest from thermal coal. The bill now moves to the California State Assembly.
Senate President pro Tempore Kevin de León (at podium in photo, with Senator Fran Pavley) introduced SB 185 as one of thirteen bills in the Climate Leadership Package, all of which passed the Senate on June 3. It is the first piece of government legislation in the US that would compel public pension funds to divest their holdings from fossil fuels—signaling major momentum for divestment campaigners in California. And it was followed today by the passage of a similar coal divestment bill by the Norwegian Parliament.
“Investing in coal is simply not worth the risks,” said Senator de León. “We have a moral obligation to protect our children, as well as an economic imperative to get out of this sinking asset. I am pleased that my colleagues have approved SB 185, and I look forward to working with the Assembly and Governor Brown to ensure it is signed into law.”
The push for SB 185 has won major momentum in recent weeks, beginning with a strong endorsement from the California Democratic Party, and continuing with a joint letter of support signed by many health organizations, including the American Lung Association, Health Care Without Harm, and Physicians for Social Responsibility.
“It’s gratifying that California is taking this important step first—not because we want to be number one, but because we know the rest of the world is watching what happens here,” said Janet Cox of Fossil Free California. “CalPERS and CalSTRS are leaders among public pension funds. They are well-respected and financially massive, and their actions also attract a lot of global attention. Let’s hope this action will inspire other states and other governments to legislate divestment from fossil fuels that threaten everyone’s well-being.”
The Fossil Free California coalition, which includes 350 Bay Area, other local 350 groups around the state, Go Fossil Free, and other allies in the climate movement, will next work to ensure that SB 185 passes in the Assembly and is signed by Governor Brown. Divesting CalPERS and CalSTRS from coal will be a significant first step toward purging these public portfolios completely from investments in the fossil fuel companies that are destroying our environment.
Morally, it’s the right thing to do. Financially, it’s the smart thing to do.
And you can help!
Our goal at 350 Bay Area is to reduce investments in all fossil fuels—coal, oil, and gas—and to publicize their destructive effects. But some institutions, resistant to total divestment, are willing to consider divesting only from coal. Is that a position we can support? Emphatically yes!
A giant step
Divesting from coal is a giant step toward total divestment. We would certainly prefer divestment from oil and gas companies too. But Stanford's decision last year to purge its $18 billion endowment of coal stocks, for example, was an enormous victory, and the university also pledged that it would review additional divestment. San Francisco State has also divested from coal—and from tar sands as well—and promised to look into "removing all future investments in fossil fuels."
The question has come up again in the context of Senate Bill 185, Senator Kevin de León's proposed legislation which directs CalPERS and CalSTRS to divest from coal. The bill also mandates that the funds study the feasibility of divesting "additional fossil fuel investments such as natural gas and petroleum." In other words, SB185 explicitly frames coal divestment as a potential first step toward total fossil fuel divestment.
We launched Fossil Free California on Global Divestment Day, February 13, 2015, in Sacramento. Divestment activists from 350 Bay Area, 350 Sacramento, and other Northern California groups gathered at CalPERS headquarters to urge CalPERS and CalSTRS to stop investing in fossil fuels and to sell their Old Energy investments within five years.
The campaign begins!
The rally included a bit of street theater: scientists faced off against Big Oil, and divestment activists saved the day—and saved the Earth, who was feeling somewhat battered and fracked.
There were also three stirring speeches. You can read them here:
Add your voice to the campaign: sign the petition to purge state retirement portfolios of coal, oil, and gas.
On February 13 at 12 noon, we will launch the Fossil Free California campaign with a rally in Sacramento. It's Global Divestment Day, and we're joining people around the world to urge pension funds, universities, cities and states, faith groups, and other institutions to divest from Old Energy.
Significant decisions are made in Sacramento. We were there at Jerry Brown's inauguration to protest his support of fracking (photo). We will be there next month to demand divestment.
Some of the largest fossil fuel investments in the world are held by the two California state pension funds, California Public Employees’ Retirement System (CalPERS) and California State Teachers’ Retirement System (CalSTRS). Their influence is enormous, with more than 20 billion dollars in coal, oil, and gas holdings. The boards of both funds have recognized the dangers of climate change and risks associated with Old Energy investments, and we are urging them to take the next step: purge their portfolios completely of these dangerous, dirty stocks and bonds.
Our rally will be held in front of the CalPERS building at 400 Q Street. A few minutes of street theater — a scientist facing off against an intransigent oil executive — will be followed by members of CalPERS and CalSTRS speaking about the importance of divestment. It's important morally, since no one wants to see her pension money used to create an uninhabitable planet. It's important financially, too, since fossil fuel companies face an uncertain future, as people increasingly recognize the destructive force of their products.
"If it's wrong to wreck the climate," as Bill McKibben once said, "then it's wrong to profit from that wreckage."
So join us in Sacramento if you can. If you can't be there, you have a choice of many other ways to demonstrate your support:
And here's something you can do today, whether you're a member of CalSTRS or CalPERS or simply a California resident concerned that state money is being used improperly. Sign our petition now, and help us call on the state pension funds to pledge complete divestment from coal, oil, and gas companies.
Photo: David Braun
Cross-posted at Fossil Free California
If you filled up your car in California this week, you probably noticed it didn't cost much. Gasoline is a bargain, on average just $3.06 a gallon across the state. Even in high-priced San Francisco, it's cheap: $3.24, and falling fast. Compare this to the statewide average of $4.26 a gallon six months ago, and it's no wonder you noticed.
Supply and demand
There are lots of reasons for this surprising development, but it boils down mainly to a simple matter of supply and demand. The market is awash in new sources of oil, from the fracking boom in North Dakota to production increases in Russia, Iraq, and Libya. Also, the OPEC cartel was unable to agree on production cuts last week, so its large share of world output remains large.
But increasing supply is only half the story. Demand is down, too. The global economy is still ailing. Vehicle efficiency continues to improve. Some hedge-fund managers have pulled back from their too-optimistic investments in oil. Japan is moving back to nuclear power and needs less oil.
So gas is cheap in California, and the oil companies are suffering—a bit. They will suffer more in the future, since this mismatch of supply and demand is likely to recur, though not for precisely the same reasons. If you buy oil company stock now, you're buying high, and you will eventually have to sell low. That's reason enough to divest.
Not as cheap as it seems
But there are even more compelling reasons to sell your shares in oil companies—and to encourage CalPERS and CalSTRS to sell too.