Senator Portantino recently took a rare action not only to support a bill with a yes vote, but also to sign onto the bill as a co-author. That bill, SB 252, seeks divestment of California’s largest pensions from $15 billion in fossil fuels. The bill signals what we all know: investing in fossil fuels invests in climate change and, with rapidly rising temperatures and increasing fires, we need to pull the plug on fossil fuel investments.
By Cheryl Auger
The University of California (UC) sold off $1 billion in fossil fuel investments three years ago and has since earned 0.5% more than on funds invested infossil fuels. If CalPERS and CalSTRS had also divested their $15 billion dollars in the same funds three years ago, they would have actually earned $75 million more for their pensioners. Staying invested in fossil fuels is actually hurting these pensions. Furthermore, UC’s new green energy investments have accelerated development of 9.2 gigawatts (GWs) of wind and solar capacity across all of their investment platforms in the US, Canada, the UK, Japan and India.
Fossil fuels are still being subsidized at both the state and the federal level, but these fund investments are at risk of losing their value, as people start understanding the connection between these subsidies, our tax dollars, and global warming. A conservative estimate from Oil Change International estimates U.S. subsidies at around $20.5 billion annually, including $14.7 billion in federal subsidies and $5.8 billion in state-level incentives. 80% goes to oil and gas and 20% to coal. We already know that California is quickly phasing out gas in buildings and cars with building electrification mandates and gas car and small engine bans. All of this will drastically reduce demand for fossil fuel and negatively impact fossil fuel fund values. Natural gas makes up 50% of California’s in-state generation.
Unions representing 470,000 California workers have signed on to support SB 252 and approximately 120,000 CalSTRS members are supporting this legislation. The City of Pasadena submitted a letter of support and Assemblymember Holden has committed to signing on as co-author. It would be a welcome change to also contribute to local and global green energy through our pensions.
Cheryl Auger is a CalPERS member and a Pasadena resident.
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