Wednesday, August 28, 2013

We did our divestment

The Water District board voted 7-0 last night to enact our climate divestment policy - no new investments in the top 200 fossil fuel companies, get rid of what we currently have by 2016, and send letters to the state agency managing our pension funds, a state water agency association, and our local government counterparts encouraging them to do the same. Also yesterday, we cut our own compensation by just under 10%, reverting it back to what the board received in 2008.

There was some reasonable discussion of whether we should distinguish the best fossil fuel companies from the rest. We decided to go ahead with the simple divestment from all of them, and consider at a future time whether we should amend the policy in favor of the better companies.

Like I said earlier, this should make us the first water district and third government agency of any kind to complete this step. has a press release here. The San Jose Mercury News published an article, and to make it interesting I'll just copy below mostly just the critical parts:

In the 1980s, hundreds of American cities, states and universities sold their investments in South African companies as part of a protest against that country's former apartheid government.

Now, environmental groups are trying to duplicate that effort, but with global warming polluters in the role of villain. And, just as with South African divestment a generation ago, the Bay Area is at the head of the parade again, prompting cheers from environmentalists and jeers from skeptics who say the whole effort amounts to little more than empty symbolism.... 
"It is unfortunate some people seem to feel supplying consumers with reliable and affordable energy is somehow comparable to apartheid," said Tupper Hull, a spokesman for the Western States Petroleum Association, in Sacramento.

"Petroleum energy provides billions of people worldwide with mobility, comfort, security and economic prosperity, he said."

Hull said that many oil companies "understand the desire to develop new alternative energy sources and reduce our collective carbon footprint" and that many fossil fuel companies are working on renewable energy projects.

Jeremy Carl, an energy expert and research fellow at Stanford's Hoover Institution who has been critical of the tactics of the environmental movement, said that climate change is occurring and is a problem. But rather than divestment, activists should work with companies and governments to promote issues like tax credits to encourage renewable energy research, or a carbon tax that would be offset by tax refunds to the public.

"We've seen people saying the fossil fuel companies are awful, and then driving home in their car and turning on their natural gas-powered electricity," he said. "I find it totally a distasteful and hypocritical way of looking at a serious situation. It trivializes an important issue."

I don't find that very persuasive, somehow. I have no interest in the flack from WSPA but I wonder if it's worth talking to Jeremy Carl, who's only a 15 minute drive away from me in my fossil-fueled car.

Per my previous post, I think the primary effect of these actions are cultural/political and not directly economic. OTOH, there's an economic cost to cultural disfavor - I bet tobacco companies have to pay a premium to hire and retain employees who might otherwise prefer to not kill people for a living. Could work the same way here as another form of cultural tax on carbon.

Video below of every fascinating moment of the discussion, assuming the video works (discussion begins about a minute into the video). It's Item 9.1 if you want to read it as well.

Get Microsoft Silverlight


Anonymous said...

Probly should have the water district run the water pumps on solar. That should be really popular with the customers. Unless they need water on a regular basis.

Hardy Cross

Brian said...

Most of power is hydro.

Brian said...

Meant to say most of our power is hydro.

dbostrom said...

Sadly the video is unavailable unless wearing Microsoft Magic Spectacles.

Kudos for divestment!


Is this a fiduciary move in the light of the past performance of the divested portfolio ?

David B. Benson said...

Good for you.

Is there some form of national water management magazine that would accept a press release?

Susan Anderson said...

Congratulations, great work!

Brian said...

Russell - our only corporate investments are in bonds, so its pretty easy to find equivalent investments. I really don't see a cost there. Stock investments are trickier in terms of balancing portfolios, but given the entire universe of potential investments, cutting out the biggest fossil fuel stocks seems unlikely to make much difference. It could even be safer given the potential carbon bubble.

David - you'd think I'd know the answer to that but I don't. There is one for stormwater management put out by a group called AFSMA. We're really California focused here, and there's a California water news source (ACWA) that I advised to contact.

Hank Roberts said...

So it's this list of 200?

Brian said...

Hank - yep

I messed up, it's NAFSMA, not AFSMA.

Anonymous said...

Eli, now you can call yourself. "kermit the schmuck"

Hank Roberts said...

Maybe you got out at a good time: