July 2, 2020

US Conference of Mayors Takes Up Non-Binding Divestment Resolution

The U.S. Conference of Mayors adopted a rushed pro-divestment, not-binding resolution on June 30, put forward by a coalition led by New York City Mayor Bill de Blasio. The network, who intended to meet this summer for its 88^th annual meeting, convenes more than 1,400 mayors and deems itself to be bipartisan. However, due to Covid-19, the conference migrated to a virtual format, adjusting to a new schedule and an on-the-go approval process.

This, unfortunately, impacted the voting process for the non-binding, symbolic resolution, which was passed in block by the Energy Committee, along with two other resolutions. Needless to say, the overall process was careless: the voting process lacked a representative quorum –neither Di Blasio or his co-sponsors attended the Zoom meeting-; and mayors didn’t even discuss the financial and political implications that the divestment implies. From the twelve attending mayors, Bryan Barnett from Rochester Hills, David Hold from Oklahoma City, and Christina Muryn voted against the “symbolic” resolution.

In fact, Jonathan Mitchell, New Bedford Mayor and Chair of the Energy Committee, approached the resolution with two grains of salt:

“I’m willing to support this as a symbolic gesture to support real, what I think would be a real boost to our efforts to combat climate change.  It does not bind cities in any way, the language is pretty clear that the conference strongly urges cities to think about divesting, to explore divesting… so it’s not binding in that way. And so to that sense it’s—not that it would be as a resolution anyway—but the language is fairly soft.”

So why go through so much trouble to vote and pass a “soft” and “not binding” resolution? First, the fact that the committee is prioritizing divestment as the primary solution to face climate change, especially amidst a global public health crisis where the industry has stepped up to support relief efforts, is misguided.

Second, the fact the non-binding initiative was reportedly organized by De Blasio is not surprising. In 2015, he proposed that New York City pension funds (NYCERS, BERS and TRS) divest from coal and in 2018, the mayor held a press conference with the who’s who of divestment activists and announced that they would divest from fossil fuels within five years. However, a year later after the lackluster announcement, NYC had divested zero pension dollars from the fossil fuel as reported by Politico: “so far it has only announced its intention to study the issue.” In fact, in January 2020, De Blasio announced again with a fanfare of publicity that they had, finally after two years, only completed selecting the advisers who would develop a “comprehensive and prudent divestment strategy”.

De Blasio’s obsession with divestment seems ignominious particularly today as the empty gesture has made close to no progress in New York. Meanwhile the oil and gas industry has played an instrumental role in aiding in COVID-19 response efforts in his own city. As reported by the Wall Street Journal editorial board, despite ongoing attacks, fossil fuel companies willingly extended a hand to New York during its darkest (COVID) hour: “the state of New York has turned to the [ExxonMobil’s] Baton Rouge plant for critical supplies,” ramping up production to supply the much-needed medical masks, gowns and hand sanitizer.

Instead of following De Blasio’s empty and untested gesture, US Mayors should develop and implement robust and tangible actions that support new technology and environmental protection measures that value collaboration and solutions, not costly gestures like divestment. According to the United Nations, “urban areas account for over 70 per cent of energy-related CO2 emissions, and the world’s cities produce almost half of all global greenhouse gas emissions”. In this regard, Mayors’ next steps are more relevant than ever in deploying innovative and forward-looking solutions that foster real energy solutions – solutions only made possible with involvement from industry.

In fact, US mayors have previously invested in this work. A report presented before the C40 Summit in 2016, a network that assembles the world’s megacities committed to addressing Climate Change, noted that the 12 US cities members of the C40 network have invested on average $2.91 billion per city on climate action. The How US Cities Will Get The Job Done report even argued that if all of US cities pursued deep emissions reduction actions, US cities would save 13 gigatons of CO2 equivalent by 2030, or “6 percent of the global cumulative savings” necessary to stay in the 1.5 degree scenario. Some of the actions suggested by the report were not rocket-science solutions, but real impact efforts to enhance efficiency, such as retrofitting buildings to comply with higher energy efficiency standards or rolling out LED streetlights, and converting buildings that rely on fuel oil to natural gas.

US Mayor’s non-binding, symbolic resolution in favor of divestment lacks the rigor and actionability needed to deploy concrete actions to protect the environment while keeping the lights on. The underwhelming divestment approach, sponsored by De Blasio’s inexperience, could potentially end up in a financial malpractices and mismanagement needed city funds and pensions. Let’s hope the broader group of mayors thinks twice on this.