Editorial

Treasurer Magaziner’s Climate Hypocrisy: Time to divest the pension fund

General Treasurer Seth Magaziner loves to preach his environmental leadership. “I would not be doing my job if I wasn’t thinking about climate — climate change is expensive,” Magaziner the state’s environmental leaders in October. And Magaziner recognizes that sustainability is a key Rhode Island issue: “It’s who we are, it’s part of our heritage, and it’s part of our

Rhode Island News: Treasurer Magaziner’s Climate Hypocrisy: Time to divest the pension fund

June 19, 2018, 11:49 am

By Harry August

General Treasurer Seth Magaziner loves to preach his environmental leadership. “I would not be doing my job if I wasn’t thinking about climate — climate change is expensive,” Magaziner the state’s environmental leaders in October.

And Magaziner recognizes that sustainability is a key Rhode Island issue: “It’s who we are, it’s part of our heritage, and it’s part of our identity as the Ocean State,” he said in a recent speech at the statehouse.

Despite these proclamations, Magaziner still invests our state’s funds in the three biggest United States oil and gas corporations — Public Enemies #1, #2, #3 in the fight for a livable climate. Climate denying ExxonMobil? Yep! Tar sand drilling and serially polluting ConocoPhillips? Of course! Chevron and Devon Energy? Them too.

To avoid being a climate hypocrite, and to cement his reputation as a true environmental leader, Treasurer Magaziner must divest our state’s funds from fossil fuel companies. It’s that simple.

Globally, more than $6 trillion has been committed for divestment, including New York City’s $5 billion and Norway’s trillion dollar sovereign fund. And here at home, the City of Providence and the Rhode Island School of Design have divested their assets. The State of Rhode Island must be next.

Treasurer Magaziner’s preferred form of advocacy, however, is “stakeholder activism,” such as pressing Exxon to release a climate risk report or Devon Energy to disclose lobbying data. While this makes great sense for reforming the business practices of student loan companies and large banks, as Magaziner commendably did, this will never work for oil companies.

Take the vote to force Exxon’s climate risk report, which Magaziner proudly endorsed in a 2017 press release, calling on the oil giant to “publish a detailed analysis of the risks that climate change may pose for the company.” Exxon quickly released the report, finding almost no risks, and continues their plans to drill and sell all the oil they have. Shareholders can force Exxon to write as many reports as they like, but Exxon will keep drilling as the world burns.

The divestment movement, on the other hand, has already begun to slow fossil fuel companies, with a recent study finding that divestment announcements are devaluing fossil fuel shares, making the cost of capital higher for the fossil fuel industry and making it harder to exploit fossil fuel reserves.

Here are four clear reasons why it’s time for Rhode Island to divest from fossil fuels:

  • Fossil fuel companies are no longer smart investments. Clean energy prices are still plummeting, regulation and litigation is piling up against coal and oil companies, and the climate movement is gaining steam, meaning that fossil fuel investments are only getting riskier. In fact, a recent study in Ecological Economics confirmed that fossil fuel stocks do not outperform and provide limited diversification benefits compared to other investments.
  • Divestment will better align the state’s investments with our own local resources and industries. Rhode Island doesn’t have any oil, gas, or coal reserves lying around, but what we do have is lots of wind and plenty of sun. Instead of investing in out of state companies, Magaziner should focus our state’s money into clean energy, one of the fastest growing industries in Rhode Island.
  • And lastly, limiting climate change will save Rhode Island millions and millions of dollars. A warming planet means more frequent floods that wreck our state’s infrastructure and storms that knock down our power lines, costs that, as Magaziner emphasized in October, “are already being passed on to Rhode Islanders.”
  • It’s the moral thing to do. As Bill McKibben recently wrote, “If it’s wrong to wreck the planet, it’s wrong to profit from the wreckage.”

As a result, it is clear that fossil fuel divestment is better not just for our planet but for our investments. And most importantly, divestment delivers a strong symbolic message: climate change must be stopped and Rhode Island is ready to do it’s part.