April 14, 2020

Priority Should be New York Workers, Not Empty Gesture Divestment

New York, like much of the world, is currently reeling from the crippling effects of COVID-19. Unfortunately, at a time when the focus of state leaders is on the health and well-being of its people, select activists are still trying to make noise around fossil fuel divestment – an issue far down any priority list for state leaders tackling this global crisis.

For instance, the New York State Legislature is currently focused on passing important bills that would provide relief to those affected by COVID-19, such as suspending rent payments and addressing paid sick leave.  Yet instead of focusing on solutions, Go Fossil Free and 350.org put out a press release pushing divestment in the state, making noise about all the support the Fossil Fuel Divestment Act (FFDA) has among state senators.

The recently retooled FFDA is a watered down version of previous failed attempts sponsored by the same politicians over the past few years. The updated bill seeks to create a faded path towards divestment, calling for the creation of an “exclusion list” of a variety of fossil fuel producers. From there, a number of things would occur, including that companies would have an opportunity to contest their inclusion by “demonstrating that they had been added in error, or by presenting clear and convincing evidence that they will have moved out of fossil fuel production and no longer meet the list criteria by 2030.”

Before any real divestment could take place, the Comptroller would also have to give his sign off, an attempt to avoid the previous constitutional concerns around previous divestment efforts. “If the Comptroller determines it would not be prudent to divest from any particular company, that company would be removed from the exclusion list,” the bill states.  Basically, it’s a mandated divestment unless the Comptroller disagrees with a given decision—which changes next to nothing about New York’s current situation.

Meanwhile in New York City, recent reporting from POLITICO delved into New York Mayor Bill de Blasio’s tenure, pointing out the dire situation the city’s budget may soon find itself in due to the ongoing economic pressures brought by the COVID outbreak. According to the paper, “[t]he mayor’s pledge to divest pension money from fossil fuel companies is even further in jeopardy than when he was claiming it was already done on the campaign trail.”

Unsurprisingly, local unions have been steadfast in their determination to block divestment efforts and are puzzled by attempts to move forward as the city faces such economic uncertainty.

“Divestment is the last thing on the list that’s going to be looked at,” said Greg Floyd, president of Teamsters Local 237 and a trustee for the New York City Employee Retirement System. “Who is going to look at divesting now with the market going the way it’s going?”

In addition to being ineffective, divestment would carry a hefty cost for New Yorkers. A 2018 study by Prof. Daniel Fischel of the University of Chicago Law School found that divestment by New York State would lead to lower returns and losses of anywhere between $136 million and $198 million annually. Projections estimate more than $1 trillion in losses over 50 years.

As New York remains in our thoughts during this complex time, we also hope activists will take stock of the moment and realize that divestment is at the bottom of everyone’s list but theirs. Protecting the health, safety, and hard-earned retirements of those on the front lines of this crisis should be our priority.