No More Public Money for Destructive and Doomed Coal, Oil, Gas Projects
350.org
(January 23, 2020) — The climate system is breaking down before our very eyes. As Australia burns and communities across the US struggle to recover from annual floods, storms and fires, our governments remain in the pockets of the corporations responsible for the state of our planet — especially Big Oil and Gas.
The fossil fuel industry wants us to think they’re invincible, but they’re not. They’re companies that need financing just like any other. And a significant chunk of that financing comes directly from public pension funds — otherwise known as our tax dollars.
Nearly all public pension funds in the US are invested in fossil fuel companies. That means public money is being used to fund public destruction.
To make matters worse, these investments in fossil fuels actually place our pension funds at risk. Fossil fuel companies are actually underperforming compared to the rest of the market. It’s widely expected that the industry will eventually go under. This bursting of the “carbon bubble” could cause losses greater than the 2008 financial crisis, according to a recent study.
It doesn’t have to be this way. Pension money invested in fossil fuels could instead be used to invest in a just transition to 100% renewable energy. This would result in healthier retirement funds for pensioners, countless green jobs for our communities, and a healthier planet for all of us.
By raising our voices across the nation, we can build pressure on state governments to divest from fossil fuels that exceeds what we’re able to do by ourselves.
ACTION: Sign the letter now to demand that our elected officials act to freeze all investments in fossil fuel companies and divest public funds from all direct and indirect investments in coal, oil and gas producers.
Sign and send the petition to your governor and state legislators: Divest the state pension funds from fossil fuels. We cannot continue to fund the climate crisis!
THE LETTER
Nearly all public pension funds in the US are invested in fossil fuel companies –and thus using our tax dollars to support the powerful polluters that are causing the climate crisis.
Climate change is the greatest threat to our planet and to humanity. Already, we are feeling the impact of escalating floods, fires, heat-waves and storms. Public money shouldn’t be used to fund public destruction.
To make matters worse, state pension funds’ investments in fossil fuels actually place our pension funds at risk. Already big coal, oil and gas companies are underperforming compared to the rest of the market. It is widely expected that the assets of many fossil fuel companies will eventually become stranded and stock values will plunge. This bursting of the “carbon bubble” could cause losses greater than the 2008 financial crisis, according to a recent study.
Retirement savings should not be invested in an uncertain and volatile industry — and we certainly do not want to continue to financially support fossil fuel companies, the primary drivers of the climate crisis.
We must move away from investments in fossil fuels and support a just transition to a low-carbon economy based on renewable energy and truly green jobs. It is time to demand that our elected officials act to freeze all investments in fossil fuel companies and divest public funds from all direct and indirect investments in coal, oil and gas producers.
Participating Organizations:
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Amazon Watch
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Carbon ‘Bubble’ Could Cost Global Economy Trillions
A rapid reduction in demand for fossil fuels could see global losses of $1-4 trillion by 2035 according to a new report.
Matt McGrath Environment correspondent / BBC
Energy efficiency and low carbon technology could cause the downturn, even if governments fail to take new steps to meet the Paris climate goals.
The resulting “carbon bubble” could cause losses larger than the 2008 financial crisis, the authors say.
The US and Canada would be the biggest losers, the study finds.
According to the International Energy Agency (IES), the world invested around $700bn in oil, gas and coal in 2016.
While there has been a growing movement for divesting from shares in fossil fuel companies in recent years, the sector still accounts for 6% of global stock markets and 12% in the UK.
Research has often focused on how these investments would be affected if the world takes new action to limit the global rise in temperatures to well under 2C as agreed in Paris in 2015.
One recent study found that 20% of the world’s power plant capacity could become “stranded assets” if the Paris goal was met.
But this new report looks at the impact of low carbon technology in renewable energy, the electrification of transport and greater efficiency in fuel use, on demand for fossil fuel irrespective of whether new climate policies are adopted or not.
They also include the impact of a rapid sell off, of oil and gas reserves by producing countries eager to get rid of the fuels before they become worthless.
The divestment movement has gained ground in recent years
The authors say that by 2035, $1 trillion dollars could be wiped off the global economy if no new actions to limit warming to less than 2 degrees are taken. This could rise to $4 trillion if new policies to restrict emissions further are set.
“You don’t need to have anything for the stranding to happen, because what has already been done in the past is driving this phenomenon,” Prof Jorge Viñuales, study co-author from Cambridge University, told BBC News.
“Many investors don’t take the carbon bubble seriously, they say that climate policies won’t be adopted, and if they are adopted they won’t be tough and even if they are tough they won’t be adopted anytime soon – what we are saying is, that doesn’t matter.”
The authors say that while there will be some significant losers, the overall impact on global GDP will likely be balanced with countries like Japan, China and the EU seeing employment grow along with their economies as their imports of fossil fuels will become much cheaper.
“It is potentially catastrophic for high cost producers,” said Prof Jorge Viñuales.
“The US will suffer in all events, the same for Russia and Canada – they could improve their situation by moving away from investment in fossil fuels and trying to develop renewable energy.”
Some scientists and investors believe that fossil fuels will continue to play a significant role and stranded assets can be avoided if technologies such as carbon capture and storage (CCS) can be developed and deployed. Other experts say this is a risky assumption.
“Many models assume that CCS will become cost competitive at some point, meaning that fossil fuels could still make up a part of a low-carbon energy mix – however it’s not clear that the technology will ever become cost-competitive without a significant increase in current levels of investment,” said Sini Matikainen, policy analyst at the Grantham Research Institute, who wasn’t involved in the study.
“The authors also use a 2 degree scenario, so under the lower, more ambitious 1.5 degree target of the Paris Agreement, the losses from stranded assets could potentially be even larger than this paper suggests.”
Other observers point out that in some parts of the world, the move away from fossil fuels has happened already
Protestors in the US have demanded an easing of environmental restrictions
“I think we are seeing this play out,” said Shelagh Whitley from the Overseas Development Institute, who have been researching the link between stranded assets and coal fired power stations in India.
“We thought when we started this three years ago that this would play out over the next decade, it is already happening.”
“In India, you have public banks saying they have to write down all sorts of assets on their books, there are all sorts of new policies coming into place, it is happening much more quickly than people imagined.”
If action is taken soon, the carbon bubble can be deflated say the authors. A simple first step would be to require all corporations to disclose their exposure to stranded assets.
If the bubble isn’t dealt with quickly, the disruption of fossil fuel production may lead to political upheaval, and the rise of populism. Something the authors fear may be happening already.
“We have not tested the link with populism in the study but my take is that this is why some administrations are relying on fossil fuel policies,” said Prof Viñuales
“And they are winning and getting a strong electoral base because the people working in those sectors have suffered a lot already.”
The study has been published in the journal Nature Climate Change.
Posted in accordance with Title 17, Section 107, US Code, for noncommercial, educational purposes.
