Last month, the United Nations hosted the Climate Action Summit and Youth Climate Summit, and more than 6 Million People also took to the Streets for a Global Climate Strike. These Events highlighted how little time we have to take Meaningful Action to address Climate Change, and how much more every Nation must do. If we Fail to act we will leave our Children and Grandchildren with an Unrecognizable World full of Extreme Droughts and Heat Waves, Dangerously Rising Sea Levels, Increasingly Severe Storms, Agricultural Failures, and Massive Population Dislocations.
New York can and must be on the Right Side of History by Acting to Reduce Fossil Fuel Emissions. One of the most important pieces of Legislation Passed this year was the Climate Leadership and Community Protection Act (CLCPA). This Legislation establishes efforts to Address and Mitigate the Effects of Climate Change by drastically Cutting Greenhouse Gases, Diverting the State’s Energy Reliance to Renewable Sources, creating Green Jobs, and Promoting Environmental Justice across New York State.
The CLCPA sets a Goal of Net-Zero Emissions Economy-Wide by 2050, while ensuring that Frontline Communities and the needs of Workers remain front and center. In the nearer term it requires Zero Emissions for Electricity Generation by 2040. It also Reorients New York’s Economy, ensuring that New York Businesses and Workers will be at the Forefront of New Clean Energy Industries.
As important as Passage of the CLCPA was, Goal-Setting is only a First step. Achieving those Goals is the hard part. The Legislation calls for the Establishment of a Climate Action Council, which is tasked with Studying how best to reach the Goal of Carbon Neutrality, and issuing Final Guidelines by 2023, which will then be Incorporated into the State Energy Plan and Broader Regulations. The Council will consist of Technical Experts, Stakeholders, and Government Officials. The State Senate Majority gets Three Appointments to the Council, and will be Pushing to ensure they are True Climate Champions who will Represent the Needs of Frontline Communities.
The Success of this Endeavor will involve Hard Choices, and must be informed by Science, Not by the Political Whims of the moment. It will require Major Changes in our Behavior and Economy to make Meaningful Progress on Climate Change, and too often a focus on Short-Term Political Costs has undermined attention to the Long-Term Realities of what we face. One of the most Inspiring parts of the Climate March was seeing Young People Mobilized to Fight for their Future. They can continue to be Leaders in providing the Political Will to take the Actions necessary to ensure a Livable Future for Everyone.
Addressing the Climate Emergency will require Simultaneous Action on many Fronts. One important Strategy, among many, is Fossil Fuel Divestment. The Global Divestment Movement has seen rapid growth in the few years since it was launched, Galvanizing Climate Action, Removing the Social License from the Corporations driving the Crisis, and Protecting Assets from the Increasingly Risky “Carbon Bubble.”
My State Senator, Liz Krueger (D-28th District), has long carried Legislation that would require New York State to Divest our Pension Funds from the Fossil Fuel Industry (S2126). Last month she joined 11 other Senators in Writing to State Comptroller Thomas DiNapoli (D), urging him to Study a Fossil Fuel Divestment Scenario as part of the Five-Yearly Asset Allocation Review for the Common Retirement Fund that his Office is currently engaged in.
As Trustee of the Common Retirement Fund, the Comptroller is required to Review and Establish an Asset Allocation Plan at least Once every Five years. The Plan is informed by an Asset Allocation Study performed by an Outside Consultant, which the Comptroller has said is being Developed now. In the Letter, Colleagues and Krueger urge the Comptroller, "to include in the scope of work for the consultants performing the asset allocation study a scenario for a fund portfolio that includes divestment from fossil fuel producers within the next five years."
A recent Report from Carbon Tracker revealed that No Major Oil Company is making Capital Investments that align with the Goals of the Paris Agreement to keep Global Warming below 2°C, let alone the now broadly accepted Goal of 1.5°C. Such a Misallocation of Funds creates Significant Stranded Asset Risk for the Companies, and therefore Unacceptable Long-Term Risk for the Pension Fund. The Letter Quotes the Recent Report from the Decarbonization Advisory Panel, Jointly Appointed by the Comptroller and Governor Cuomo, which stated that, "being too early in the avoidance of the risk of permanent loss is much less of a danger than being too late.”
Not only is it Unacceptable to Financially Support the Extraction of Climate-Destabilizing Fossil Fuels, but the State Pension Fund is Exposed to increasing Financial Risk by Holding onto Fossil Fuel Producers, which stand to Lose Significant Value as the World acts to Mitigate Climate Change. The Impact of the Clean-Energy Transition is already being felt by these Companies, and the Economics of Renewable Energy continues to develop in such a way as to Threaten the Hegemony of Fossil Fuels regardless of the Actions taken by Governments. The Common Retirement Fund has already Lost more than $260 Million in Coal Investments since 2010; a recent Study by Corporate Knights Estimated that the Fund is Valued at $22.2 Billion less than it would have been had it Divested from Fossil Fuels in 2008 and Redistributed those Funds across the Rest of the Portfolio.
The Climate Crisis is here, Fiduciary and Moral Responsibility require the Process of Divestment to begin Now. The Writing on the Wall could Not be Clearer: Fossil Fuel Producers are a Bad Long-Term Investment. Divestment will Protect Workers and Retirees from the Rapid Devaluation these Companies will Suffer in the coming Energy Transition. Though the Comptroller continues to Resist Calls for Full Divestment, We must urge him nonetheless to use the Asset Allocation Review Process to begin Preparing for the Inevitable.
NYC Wins When Everyone Can Vote! Michael H. Drucker
