SB 185: Investing with our values and for the next generation
Kevin de León
I’m proud to say that California is putting its money where its mouth is when it comes to addressing the challenge of climate change. With the support of 350.org and a broad coalition of dedicated grassroots activists, California joined the growing ranks of the global divestment movement and passed SB 185, which is the first measure of its type in the nation.
SB 185 directs California’s state pension funds—the largest in the nation—to divest their thermal coal holdings, and prevents any future investment in coal.
Together these funds manage nearly half a trillion dollars in assets that will soon be coal-free. This is a massive step forward for the divestment movement, which now includes more than 500 institutions representing over $3.4 trillion in assets that have made some form of divestment commitment, according to 350.org and Divest-Invest, two organizations coordinating the growing movement.
SB 185 aligns our investments policies with our values. Since 2007, the state of California has prohibited our utilities from investing in new coal power in order to reduce greenhouse gas emissions.
We know that coal combustion for energy is the leading cause of global climate change. According to the United States Energy Information Administration, “coal plants are the nation’s top source of carbon dioxide (CO2) emissions, the primary cause of global warming.” A typical coal plant generates 3.5 million tons of CO2 per year, and the U.S. had over 1300 active generating units in 2012,
Coal combustion is also a leading cause of smog, acid rain, and toxic air pollution that contribute to respiratory diseases like asthma and emphysema, along with a wide variety of terrible illnesses such as heart disease and cancer.
And aside from the health and environmental hazards it creates, coal is a risky investment that is rapidly losing value. The market value of America’s four largest coal companies has fallen 95% in five years. And the decline is accelerating – by year’s end, the U.S. will have shuttered 12.8 GW of coal-fired power – four times as much capacity as we shut down last year.
The writing is on the wall – our policies, technologies and global markets are all moving in concert away from coal as an energy source. So why continue to invest our public employees’ retirement funds into this fading industry, especially given the multitude of health and environmental concerns it creates?
California’s is a world leader in the fight against climate change. Certainly, we can find more sustainable and profitable investments for our public pension funds that better suit our values.