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July 30, 2015

McKibben’s Home State Rejects Divestment — Again

One of the more interesting and under-reported aspects of the so-called divestment “movement,” which lead organizer Bill McKibben has declared is now a “mass movement” and a smashing success, is McKibben’s continued inability to convince the very school at which he teaches to join his effort.

Keep in mind: McKibben doesn’t teach at Texas A&M or the Colorado School of Mines. He teaches in the environmental studies department at Middlebury College – in Vermont, of all places. On its face, it would seem a fairly implausible thing to suggest you’re leading one of the fastest growing and most important social movements in human history on the one hand, while on the other, you can’t even get your own school, which just happens to reside in one of the most liberal states and one without any oil or gas development, to follow suit. Actually, it makes you wonder: if divestment is such an important issue for McKibben, how does he justify continuing to teach at a school that invests in fossil-related equities? Shouldn’t McKibben consider “divesting” himself from that position?

But anyway, Middlebury’s outright rejection of McKibben’s persistent divestment entreaties is only one of the indignities that institutions based in Vermont have heaped upon the 350.org founder over the past several years. Let’s not forget that Vermont governor Peter Shumlin (D) recently embraced increased natural gas use in his state, deciding to invest $90 million in expanding the Vermont Gas System’s pipeline. Shumlin called the natural gas project “critical to Vermonters who are struggling to pay their energy bills” and an opportunity to create jobs and move the state’s energy supply towards a “clean energy supply,” despite having no oil and gas resources of its own to develop. The mayor of Rutland, Vt., Christopher Louras, also came out in support of increased natural gas use in his county, noting that natural gas is a “more affordable, cleaner and safe option.”

Fast forward to this week, when ol’ Vermont issued some more bad news to McKibben and his followers by rejecting calls to divest its state pension fund from fossil fuels —  the third time in two years it has shut that down. Indeed, this time around, the committee that oversees Vermont’s $4 billion fund voted unanimously to continue investing in the energy industry, citing the financial risks of divestment for its pensioners.

According to Vermont State Treasurer Beth Pearce, “The evidence that I’ve seen to date tells me that there is a loss to the fund [if we divest], and it’s substantial. And as a fiduciary, I’m compelled to recommend against divestment.” Pearce continued, stating while she supports efforts to mitigate climate change, removing the fund’s fossil fuel assets would cost the pension fund a staggering $9 million each year – a risky decision for the 48,000 Vermonters who rely on the pension fund for retirement benefits.

Pearce also noted the importance of engagement, stating that if the fund sold off its energy holdings, it would lose its influence as a shareholder, an idea echoed by many other experts who view divestment as an ineffective strategy to combat climate change. The Green Mountain State’s decision also reflects the findings of a recent study which found fossil fuel investments are financially beneficial for participants in state pension funds across the country. According to that report, which examined the impacts of pension fund oil and gas investment returns from 2005 to 2013, investments in energy stocks “significantly outperformed the other assets held by those funds.”

Bottom line: The Vermont pension fund is in good company with its decision to reject divestment. As McKibben’s campaign to promote divestment continues to face roadblocks, even in the state and school where he teaches, universities and pension funds across the state and country are saying no to this costly campaign. And while that may represent a pretty big blow to (and a pretty monumental embarrassment for) Mr. McKibben, it’s a win for retirees, students and just about every other sentient human being in that state.