May 27, 2015

Governor McAuliffe Latest Climate Advocate to Oppose Fossil Fuel Divestment

https://www.youtube.com/watch?v=t2N5SRhq47U&feature=youtu.be

Add Virginia Governor Terry McAuliffe to the long list of climate advocates opposing fossil fuel divestment.

In a forum last month sponsored by The New Republic called “The Next Frontier of Climate Change,” Gov. McAuliffe spent almost the entire 30 minutes talking up his efforts to address climate change. But when he was also asked whether “the state of Virginia and its retirement fund and other relevant funds should divest from fossil fuel companies,” the governor answered:

“No! I think they have to make the decision, what is in the best interest of whatever they’re making their investments. They have a fiduciary duty to make those investments, and clearly, as Governor, I am not going to sit here and tell the people who manage these funds what to do. It’s not my role. And I clearly understand my role. I’m trying to set a table to grow and diversify our economy. I’m one of the leaders of the country pushing for clean energy, I have always been vocal on this topic, but Jeff, it is not my job to come in and tell our businesses what to do.”

In response to a follow-up question asking if “this divestment question” a “tough political question” for him, McAuliffe replied:

“I don’t think I had a tough time answering your question. Listen, you may not always agree with me, but I’ll tell you this, folks, you’ll always know where I’m coming from.

When it comes to retirement funds, McAuliffe is correct. According to a new study by economic advisory firm Sonecon and released by the American Petroleum Institute (API) released in April, oil and gas investment returns have a significant impact on state pension funds across the country. From 2005 to 2013, the study concluded, investments in fossil fuel stocks “significantly outperformed the other assets held by those funds,” averaging 130 cumulative returns of 130 percent over the eight-year period, while the same funds’ other holdings only averaged 68 percent.

As noted above, Gov. McAuliffe has made the issue of climate change a top priority. In fact, anti-fossil fuel billionaire Tom Steyer supported Gov. McAuliffe in the 2013 Virginia governor’s race through his NextGen Cliamte Action group, which ran television ads. “I would say there’s a very clear choice on this topic between these two candidates, and I think the citizens of Virginia deserve to understand both what the truth is and what the implications of that are,” Steyer said at the time.

Gov. McAuliffe is hardly alone amongst climate advocates opposing fossil fuel divestment. Leading professors and climate advocates from across the country too, have expressed concerns, including Frank Wolak of Stanford University, William Nordhaus from Yale and Robert N. Stavins from Harvard. Perhaps Stavins put it best when he stated, “We need to focus on actions that will make a real difference, as opposed to actions that may feel or look good but have little real-world impact, particularly when such symbolic actions have opportunity costs—that is, they divert us from what really matters.”