OPINION: Unions should divest from fossil fuels while it still can
Dear Brooklyn Eagle Editor:
Unlike a recent opinion piece in the Brooklyn Eagle — Cuomo and de Blasio should not force unions to divest from fossil fuel companies — I strongly support divesting public pensions and other funds from climate wrecking fossil fuels.
I lived in Bed-Stuy until recently and still own an apartment here. As my wife is a retired state work, I am a beneficiary of the state pension fund. As the authors of the opinion piece noted, New York is unusual in that there is a constitutional requirement to treat public pensions as a contractual obligation. What the authors failed to note is that this means that the taxpayers rather than the employees are the ones that bear the risk for any shortfall in the pension funds.
Five years ago, I helped start the divestment campaign with 350.org to divest the city and state pension funds from fossil fuels. I felt it was wrong for the city and state to seek to profit from fossil fuels companies that are driving extreme weather than had already caused more than $60 billion in climate related damages in NYC.
However, as I worked on the campaign, the financial risks involved in investing in fossil fuels became apparent. Simply put, we need to divest from fossil fuels while the stocks still have value. Two years ago 350 paid for an investment firm to calculate what would have happened to the value of the state pension fund if it had divested when we first asked them to. The answer was that the funds would be worth an extra $5 billion dollars.
Tom Sanzillo, the Acting State Comptroller before the appointment of Tom DiNapoli as state comptroller by the state legislature, has increasingly warned of the financial risk posed by the state’s $6 billion investment in fossil fuels. This includes keeping $1 billion in Exxon Mobil while the State Attorney General has been investigating them and other fossil fuel companies for misleading the public and investors for decades about the realities of climate change
The recent study co-authored by Sanzillo describes divestment “as a proper financial response by investment trustees to current market conditions and to the outlook facing the coal, oil and gas sectors. The fossil fuel sector is shrinking financially, and the rationale for investing in it is untenable. Over the past three and five years, respectively, global stock indexes without fossil fuel holdings have outperformed otherwise identical indexes that include fossil fuel companies. Fossil fuel companies once led the economy and world stock markets. They now lag. A cumulative set of risks undermines the viability of the fossil fuel sector.”
The study also cautions that fossil fuel companies’ exposure to litigation on climate change and other environmental issues is expanding.
Since 350.org started the divestment campaign, more than 700 institutions with funds in excess of $6 trillion dollars have agreed to divest from fossil fuels. Ireland recently voted to become the first nation to divest.
As divestment has gathered steam worldwide, the fossil fuel industry has desperately sought to shore up their support. For some reason, in New York the police and firefighters have been the main proponents of the fossil fuel industry. You would think as first responders they would be worried about the dangers posed by flooding, heat wave and other extreme weather. The far bigger NYC unions of DC37 and UFT support divestment.
Last year, three hurricanes at category-5 slammed into the US, leaving Puerto Rico without power and water for six months. In the last month the northern hemisphere experienced record heat waves throughout Europe and Asia. Last week a firestorm swiftly killed more than 80 people outside the Greek capitol, with some drowning after jumping in the sea to escape the flames. Wildfires are raging once again in California.
The role of the Suffolk County Municipal Employees Association, headed by one of the co-authors of the article, is particularly curious. The study they did assumed — contrary to existing evidence — that divestment would lower the overall rate of return on the funds. Having assumed there would be a loss, they then calculated what the loss would be. The so-called study was done by the legislative director of Assemblymember Peter Abbatte, who happens to chair the committee which is considering the legislation (sponsored by nearly 50 state lawmakers) to divest the state pension fund.
When our grandchildren ask us what did we do about climate change, the answer shouldn’t be we continued to invest in fossil fuel companies after we knew the damage they were causing.
Green Party candidate for State Comptroller
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