The president’s decision to withdraw the U.S. from the Paris Accord, the global agreement to curb greenhouse gas emissions, was a setback for America’s moral and diplomatic leadership around the globe. Fortunately, those of us in the environmental movement have rallied to propose alternate ways for the country to demonstrate leadership on the issue of climate change. Political leaders from cities and states all across the country have come together to pledge their commitment to fighting climate change, and activists have proposed additional measures to pursue the goal of a cleaner, healthier planet.
As a lifelong environmentalist, it is heartening to see municipalities and corporations spurred into action on this very pressing issue. We all must do our part to reduce our carbon footprint and to preserve our planet for future generations. In this respect, there is plenty that we can do on the public policy front. We can encourage or mandate more efficient heating systems in new buildings, incentivize the use of solar panels, streamline the permit and approval process for wind turbines, or improve waste water recovery.
It is somewhat troubling for me to see some voices urging divestment from fossil fuel investments in public pension funds as a tactic post-Paris, however. In the days following the announcement, the Mayor of Pittsburgh, for example, issued an executive order to pressure municipal pension funds to divest. Here in Maryland The Baltimore Sun proposed divesting state pension funds in an editorial.
Divestment shouldn’t be viewed as a way to get back at Mr. Trump for pulling out of the Paris accord. The president will not have to depend on the pension funds in question for his retirement savings. The firefighter, on the other hand, completing a 12-hour shift at your local firehouse or the teacher educating future generations, will. In fact, lower returns are one of the few measurable effects that would result from divestment. Numerous studies have concluded that decreased fund performance is a result of divestment measures. Daniel Fischel of the University of Chicago Law School and his co-authors, at the request of the Independent Petroleum Association of America, analyzed that the top 11 pension funds in the U.S. and found that they would lose $324 million to $431 million per year if they were to divest from fossil fuel investments. Punishing retired civil servants and sticking taxpayers with the bill does not make for a particularly potent message.
Thankfully, there are leaders out there who can distinguish between supporting the goals of the Paris accord and seeing divestment for what it is. New York Comptroller Tom DiNapoli said last month that he believes in “engagement with companies.” Mr. DiNapoli has been pressured by numerous groups to divest the $192 billion state pension fund, but has so far resisted, and good for him. This is not a partisan issue, but a common sense position to have — especially for officials who have jurisdiction and a fiduciary responsibility over pensions.
There is no doubt that some of the public policy solutions to limit carbon emissions will cost both money and political capital. Singling out public employees, retirees and pensioners through divestment only seeks to alienate them, thereby making it harder to achieve consensus on other policies that would affect this constituency.
It is abundantly clear that we need to begin moving our fossil-fuel intensive lifestyles in a more sustainable direction. Divestment, however, does not accomplish that objective. You can divest pension funds one day, and the next, you’ll find yourself using the same amount of fossil fuels as the day before. Divestment is not a miraculous remedy that will reduce fossil fuel consumption. Even activists who support the idea of divestment readily admit that the move is more symbolic than practical. Officials in Maryland and elsewhere should focus their attention on exploring and implementing clean energy solutions that provide real steps to reduce our carbon footprint, unlike futile divestment measures.
Norris McDonald is the president of the African American Environmentalist Association (www.africanamericanenvironmentalistassociation.org) based in Washington, D.C.