Earth Doctor Rx for Survival

New York City & State Divesting

New York City & State Divesting

20 December 2017

Investment funds committed to fossil fuel divestment have doubled over the past year to $5.2 trillion.  And yesterday, New York City and State announced divestment of their $390 billion pension plans, bringing the total to nearly $5.6 trillion.

“First they ignore you, then laugh at you, then fight you, then you win”, as the saying goes. When Bill McKibben launched the fossil fuel divestment movement in 2012, it was dismissed and ridiculed for quite a while. Critics emphasized that divestment simply allows company stock to change hands, not directly affecting fossil fuel company valuations. McKibben was fully aware of this, of course. From the outset, he stated the goal of divestment to be to deprive these companies of their “social license”, and to raise the public awareness that most of their stock value is based on unrecognized stranded assets.

At the present time, every nation in the world except the US is in agreement and moving forward on the Paris Climate Accord. It is widely understood that to meet the global temperature goals, approximately 80% of known, commercially available coal, gas and oil assets must stay in the ground. The reality of stranded assets is slowly but surely beginning to sink in, starting with the global business community.

Five years on, what appeared to be mainly a symbolic form of protest, the divestment movement has significantly shifted the climate conversation. “Carbon tax” and “stranded assets” have become household words. In 2016 Black Rock, the world’s largest private investment fund, asserted that “investors can no longer ignore climate change“. In 2017, financial giant Vanguard followed suit.

What applies to investment assets also applies to cities and their bond ratings. Last month, credit rating giant Moody’s Investment Service Inc. issued a warning that cities must address climate risks or face a credit downgrade.

The Trump administration has been hard at work trying to slow down the inevitable transition of the United States and the world to clean energy, and turning a blind eye and a deaf ear toward the increasingly ubiquitous evidence of climate disruption. Their irresponsible and inflammatory policies steal the headlines almost daily. But in the background, the business communities at home and abroad have recognized what is going on. They are worth watching. They are shifting investments out of fossil fuels, and they are helping responsible people wake up and get on board. Lawmakers are under increasing pressure to divest public funds from the fossil fuel industry. I think we will be seeing more states soon following New York’s lead.

Divestment music, anyone? I’ve posted a few music videos on this site about the divestment movement, including That Is Not The Case and the parody You’ve Got To Bend. Any good movement needs music!

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