Want to divest your pension fund from fossil fuels? Good luck with that

There’s been a long running battle in the progressive community as they seek to force this or that group, organization or institution to divest from fossil fuels. (They do that with Israel as well, but that’s a story for another thread.) The “success” the divestment forces have realized has been, shall we say… limited. They’ve gone after a large number of colleges, many of which we’ve covered here, and to date virtually every one of them has concluded that, while they “sympathize with the sentiments being expressed” it would be too financially damaging to carry through with the plan. The only exception was Syracuse University, but even they actually only paid lip service to the idea of divestment and are still profiting nicely from legacy funds.

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But it’s not just colleges. Now Team Divestment is going after the pension funds of public workers in cities and states around the nation. As the Washington Free Beacon reports this week, that project is off to a far more successful start.

Naw… I’m just kidding. The people running the pension funds aren’t going to be that stupid either.

A move away from fossil fuel investments by 11 of the nation’s major public pension funds would lead to a nearly $5 trillion shortfall over the next 50 years, according to a new report from University of Chicago professor Daniel Fischel.

The report comes as environmentalists renew their push to get pension funds to divest from fossil fuels following President Trump’s withdrawal from the Paris Accord. Elected officials in both New York state and New York City have pushed for both to rapidly divest their billions of dollars worth of fossil fuel investments.

“By fully divesting New York City pension funds from coal, oil, and gas, we would take a prudent step toward protecting 1.5 million pension holders,” said city council member Helen Rosenthal last month.

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Wow. Five trillion here, five trillion there and pretty soon you’re talking about real money.

What’s particularly interesting and caught my eye in this story is the fact that both the state government of New York and the municipal government of New York City have been pushing the divestment idea. Both Governor Andrew Cuomo and Big Apple Mayor Bill de Blasio have plenty on their plates at the moment and future career aspirations. Much of their joint hopes rests on the backs of public workers and their unions who fund almost all Democratic candidates in the Empire State.

Let’s stop to consider that for a moment. Some liberal activists want both of these officials to push to take all oil, coal and gas investments out of the pension funds’ portfolios. Now there’s yet another report in hand which shows that the pensions will run into massive shortfalls if they make such a move. What’s a politician to do? Risk ticking off their most enthusiastic supporters or make a move which is good for a few headlines but has the public worker retirees (and those close to retirement) calling for their heads when they find out their checks won’t be clearing in a couple of years?

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We’ll put a pin in this one and keep you informed. But I’m betting I know which way it’s going to go.

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David Strom 3:20 PM | November 15, 2024
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