Divest From Fossil Fuels
From Crane’s New York Business
October 29, 2018 12:00 AM
by John Ingram“To win slowly is to lose”
—Bill McKibben, founder of the climate activist group 350.org
This week’s report by the Nongovernmental International Panel on Climate Change shows that the window of opportunity for stabilizing the climate is rapidly closing. To keep it open we must stop any increases in carbon emissions in the next two years. As a climate activist, I believe divestment from fossil fuels is essential to protect the world from future climate chaos.
Divestment is also the prudent choice to protect public funds from the imminent decline of the fossil-fuel industry. New York state pension funds have $6 billion invested in fossil-fuel assets. By the beginning of next year, state Comptroller Thomas DiNapoli, who controls the funds, is expected to decide whether to fully divest from or slowly reduce those assets.
The fossil-fuel industry is concerned for its future. It is not environmental policy that threatens it today but the growing realization that it is no longer a sound investment. It will soon be eclipsed by plummeting clean-energy prices, competing carbon-free investment options and an exponential shift to electric vehicles.
Investors are also increasingly aware of untapped fossil-fuel resources that in the face of climate change will remain in the ground and become worthless—what we call stranded assets. Rapid divestment from fossil fuels before this realization becomes more widespread in the markets will be a win. With a slow reduction we will lose.
Despite the mounting evidence of the need for immediate action, DiNapoli still argues that a slow reduction of carbon assets from the pension funds, along with shareholder pressure on corporate leaders, is the best way to maintain pension stability while addressing climate change. His strategy wrongly assumes that fossil-fuel markets will remain stable, that company boards will accurately state the value of assets in the face of their stranded future, that the rigid, corrupt and highly subsidized industry will make fundamental changes to its core business, and that it all will happen in the short time remaining.
Divestment is a financial strategy, but it is also a resonant argument for a sustainable future. The global “fossil free” movement has grown to $6.25 trillion in pledged institutional divestments along with major divestments underway by Ireland, the Norwegian Sovereign Wealth Funds and many faith-based organizations. New York City’s courageous full divestment announcement in January was a call heard around the world by all of us who believe a new age of clean energy is coming. London is now joining with New York and many other cities to escalate the divestment movement.
Pensioners and all New Yorkers should request that DiNapoli lead with conviction by fully divesting the state from fossil fuels and increasing investments in the new energy economy.
Climate change is no longer just a scientific prediction. It is a rapidly approaching hurricane.
John Ingram, a retired teacher and administrator, is a climate activist with 350NYC.org and the Divest New York State coalition